What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-02-23 compared with 2023-02-23 · 11 added, 901 removed, 31 unchanged (97% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Stock Information

Saia’s common stock is listed under the symbol “SAIA”

on the Nasdaq Global Select Market.

Saia’s common stock is listed under the symbol “SAIA” on the Nasdaq Global Select Market.

As of January 31, 2024, there were 738 holders of record of our common stock.

1 unchanged sentence

Any payment of dividends in the future is dependent upon our financial condition, capital requirements, earnings, cash flow and other factors.

The payment of dividends was restricted under the Company's previous credit agreement and remains restricted under the credit agreement entered into on February 3, 2023.

See Note 2 of the accompanying audited consolidated financial statements for more information on the credit agreements.

The payment of dividends was restricted under the Company's previous credit agreement and remains restricted under the credit agreement entered into on February 3, 2023 as well as the private shelf agreement entered into on November 9, 2023.

See Note 2 of the accompanying audited consolidated financial statements for more information on the credit agreements and the private shelf agreement.

Issuer Purchases of Equity Securities

10 unchanged sentences

December 31, 2023

Shares purchased by the Saia, Inc.

Executive Capital Accumulation Plan were open market purchases.

Any shares purchased by the Saia, Inc.

Executive Capital Accumulation Plan are open market purchases.

For more information on the Saia, Inc.

4 unchanged sentences

The Saia, Inc.

Executive Capital Accumulation Plan sold 480 shares of Saia stock at an average price of $248.45 during the period of November 1, 2022 through November 30, 2022.

Executive Capital Accumulation Plan had no sales of Saia stock during the period of November 1, 2023 through November 30, 2023.

The Saia, Inc.

2 unchanged sentences

The graph below compares the cumulative five year total stockholder return on Saia, Inc.

common stock relative to the cumulative total stockholder returns of the Russell 2000 index, the NASDAQ Transportation index and two customized peer groups of eleven companies each, which individual companies are listed below.

The Company modified the peer group in 2022 to maintain the comparability of peers as measured by total revenue and/or market capitalization.

common stock relative to the cumulative total stockholder returns of the Russell 2000 index, the NASDAQ Transportation index and a customized peer group of eleven companies.

Individual companies within the custom peer group are listed below.

An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on December 31, 2018 and its relative performance is tracked through December 31, 2023.

Companies included in the peer group are:

ArcBest Corp., Covenant Logistics Group Inc., Heartland Express Inc., J.

Hunt Transport Services Inc., Knight-Swift Transportation Holdings Inc., Marten Transport Ltd., Old Dominion Freight Line Inc., Pam Transportation Services Inc., Saia Inc., Werner Enterprises Inc.

and Yellow Corp.

Companies included in the 2022 peer group are:

ArcBest Corp., Hub Group Inc., J B Hunt Transport Services Inc., Knight-Swift Transportation Holdings Inc., Landstar System Inc., Old Dominion Freight Line Inc., Saia Inc., Schneider National Inc., TFI International Inc., Werner Enterprises Inc.

ArcBest Corp., Hub Group Inc., J.

Hunt Transport Services Inc., Knight-Swift Transportation Holdings Inc., Landstar System Inc., Old Dominion Freight Line Inc., Saia Inc., Schneider National Inc., TFI International Inc., Werner Enterprises Inc.

Cumulative Total Return

1 unchanged sentence

NASDAQ Transportation

2021 Peer Group

2022 Peer Group

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our 2022 and 2021 results and year-to-year comparisons between 2022 and 2021.

Discussions of our 2020 results and year-to-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 23, 2022.

Cautionary Note Regarding Forward-Looking Statements

The Securities and Exchange Commission (the SEC) encourages companies to disclose forward-looking information so that investors can better understand the future prospects of a company and make informed investment decisions.

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”

contains these types of statements, which are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as “anticipate,”

“estimate,”

“expect,”

“project,”

“intend,”

“may,”

“plan,”

“predict,”

“believe,”

“should”

and similar words or expressions are intended to identify forward-looking statements.

Investors should not place undue reliance on forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, except as otherwise required by applicable law.

All forward-looking statements reflect the present expectation of future events of our management as of the date of this Annual Report on Form 10-K 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 any forward-looking statements.

These factors, risks, uncertainties and assumptions include, but are not limited to, the following:

general economic conditions including downturns or inflationary periods in the business cycle;

operation within a highly competitive industry and the adverse impact from downward pricing pressures, including in connection with fuel surcharges, and other factors;

industry-wide external factors largely out of our control;

cost and availability of qualified drivers, dock workers, mechanics and other employees, purchased transportation and fuel;

inflationary increases in operating expenses and corresponding reductions of profitability;

cost and availability of diesel fuel and fuel surcharges;

cost and availability of insurance coverage and claims expenses and other expense volatility, including for personal injury, cargo loss and damage, workers’

compensation, employment and group health plan claims;

failure to successfully execute the strategy to expand our service geography;

costs and liabilities from the disruption in or failure of our technology or equipment essential to our operations, including as a result of cyber incidents, security breaches, malware or ransomware attacks;

failure to keep pace with technological developments;

labor relations, including the adverse impact should a portion of our workforce become unionized;

cost, availability and resale value of real property and revenue equipment;

supply chain disruption and delays on new equipment delivery;

capacity and highway infrastructure constraints;

risks arising from international business operations and relationships;

seasonal factors, harsh weather and disasters caused by climate change;

economic declines in the geographic regions or industries in which our customers operate;

the creditworthiness of our customers and their ability to pay for services;

our need for capital and uncertainty of the credit markets;

the possibility of defaults under our debt agreements, including violation of financial covenants;

inaccuracies and changes to estimates and assumptions used in preparing our financial statements;

failure to operate and grow acquired businesses in a manner that support the value allocated to acquired businesses;

dependence on key employees;

employee turnover from changes to compensation and benefits or market factors;

increased costs of healthcare benefits;

damage to our reputation from adverse publicity, including from the use of or impact from social media;

failure to make future acquisitions or to achieve acquisition synergies;

the effect of litigation and class action lawsuits arising from the operation of our business, including the possibility of claims or judgments in excess of our insurance coverages or that result in increases in the cost of insurance coverage or that preclude us from obtaining adequate insurance coverage in the future;

the potential of higher corporate taxes and new regulations, including with respect to climate change, employment and labor law, healthcare and securities regulation;

the effect of governmental regulations, including hours of service and licensing compliance for drivers, engine emissions, the Compliance, Safety, Accountability (CSA) initiative, regulations of the Food and Drug Administration and Homeland Security, and healthcare and environmental regulations;

unforeseen costs from new and existing data privacy laws;

changes in accounting and financial standards or practices;

widespread outbreak of an illness or any other communicable disease, including the COVID-19 pandemic;

the conflict between Russia and Ukraine;

relations between China and Taiwan;

increasing investor and customer sensitivity to social and sustainability issues, including climate change;

provisions in our governing documents and Delaware law that may have anti-takeover effects;

issuances of equity that would dilute stock ownership;

weakness, disruption or loss of confidence in financial or credit markets;

other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC filings.

These factors and risks are described in Part I, Item 1A.

“Risk Factors”

of this Annual Report on Form 10-K.

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-K.

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, except as otherwise required by applicable law.

Executive Overview

The Company’s business is highly correlated to non-service sectors of the general economy.

The Company’s strategy is to improve profitability by increasing yield while also increasing volumes to build density in existing geography and to pursue geographic and terminal expansion to promote profitable growth and improve our customer value proposition over time.

The Company’s business is labor intensive, capital intensive and service sensitive.

The Company looks for opportunities to improve safety, cost effectiveness and asset utilization (primarily tractors and trailers).

Pricing initiatives have had a positive impact on yield and profitability.

The Company continues to execute targeted sales and marketing programs along with initiatives to align costs with volumes and improve customer satisfaction.

Technology continues to be an important investment as we work towards improving customer experience, operational efficiencies and Company image.

The Company’s operating revenue increased by 22.0 percent in 2022 compared to 2021.

The increase resulted primarily from pricing actions, including a 7.5 percent general rate increase taken on January 24, 2022, for customers subject to general rate increases, in addition to an increase in fuel surcharge revenue and improvements in mix of business.

Consolidated operating income was $470.5 million for 2022 compared to $335.1 million in 2021.

The increase in 2022 operating income resulted primarily from pricing actions and fuel margin, partially offset by salary and wage increases, higher purchased transportation costs, higher vehicle maintenance costs and increased depreciation expense.

The Company generated $473.0 million in net cash provided by operating activities in 2022 versus $382.6 million in 2021.

The Company used $365.5 million of net cash in investing activities during 2022 compared to $277.8 million during 2021.

At December 31, 2022 the Company was party to a credit agreement with a banking group that provided for a $300 million line of credit with a term ending February 2024.

The credit agreement also had an accordion feature that allowed for an additional $100 million availability, subject to certain conditions and availability of lender commitments.

The credit agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement.

On February 3, 2023, the Company entered into a new unsecured credit agreement with its banking group that replaced the prior agreement.

Among other items, the new credit facility maintains the size of the previous line of credit of $300 million, expands the accordion feature to $150 million and extends the maturity to a term ending February 2028.

See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the credit agreements.

The Company used $26.7 million of net cash in financing activities during 2022 compared to $23.5 million of net cash used in financing activities during 2021.

The Company had zero net borrowings under its revolving credit facility during 2022 and 2021 and made scheduled principal payments for finance lease obligations of $19.5 million during 2022.

Outstanding letters of credit were $33.0 million and the Company had cash and cash equivalents of $187.4 million as of December 31, 2022.

The Company had $268.8 million in remaining availability under its revolving credit facility and $31.0 million in obligations under finance leases at December 31, 2022.

The Company was in compliance with the debt covenants under its debt agreements at December 31, 2022.

See “Financial Condition, Liquidity and Capital Resources”

for a more complete discussion of these agreements.

The following Management’s 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.

and its wholly-owned subsidiaries (together, the Company or Saia).

This discussion should be read in conjunction with the accompanying audited consolidated financial statements which include additional information about our significant accounting policies, practices and the transactions that underlie our financial results.

Saia is a transportation company headquartered in Johns Creek, Georgia that provides less-than-truckload (LTL) services through a single integrated organization.

While more than 96% of its revenue is derived from transporting LTL shipments across 45 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across the United States.

Our business is highly correlated to non-service sectors of the general economy.

Our business also is impacted by a number of other factors as discussed under “Cautionary Note Regarding Forward-Looking Statements”

and Part I, Item 1A., “Risk Factors.”

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.

Results of Operations

and Subsidiaries

Selected Results of Operations and Operating Statistics

For the years ended December 31, 2022, 2021 and 2020

(in thousands, except ratios, workdays, revenue per hundredweight, revenue per shipment and length of haul)

Operating Revenue

Operating Expenses:

Salaries, wages and employees’

Purchased transportation

Fuel and other operating expenses

Depreciation and amortization

Operating Income

Operating Ratio

Non-operating Expenses, Net

Working Capital (as of December 31, 2022, 2021 and 2020)

Net Acquisitions of Property and Equipment

Saia LTL Freight Operating Statistics:

LTL Shipments

LTL Revenue per hundredweight

LTL Revenue per shipment

LTL Pounds per shipment

LTL Length of haul

Year ended December 31, 2022 as compared to year ended December 31, 2021

Revenue and volume

Consolidated revenue increased 22.0 percent to $2.8 billion primarily as a result of pricing actions, increased fuel surcharge revenue and improvements in mix of business.

Favorable economic conditions, along with improved customer service and targeted marketing initiatives, have positively impacted the Company's ability to implement measured pricing actions to improve yield.

As a result of these increased rates, Saia’s LTL revenue per hundredweight (a measure of yield) increased 19.4 percent to $24.70 for 2022.

Saia’s LTL tonnage also increased 0.9 percent per workday while LTL shipments decreased 0.8 percent per workday for 2022.

Overall LTL revenue per shipment increased 21.5 percent in 2022 due to the yield improvements discussed above.

Additionally, LTL weight per shipment increased 1.8 percent during 2022.

For 2022 and 2021, approximately 75 percent of Saia’s operating revenue was subject to specific customer price adjustment negotiations that occur throughout the year.

The remaining 25 percent of operating revenue was subject to a general rate increase which is based on market conditions.

For customers subject to general rate increases, Saia implemented a 7.5 percent general rate increase on January 24, 2022.

Competitive factors, customer turnover and mix changes, among other things, impact the extent to which customer rate increases are retained over time.

Operating revenue includes fuel surcharge revenue from the Company’s fuel surcharge program.

This program is designed to reduce the Company’s exposure to fluctuations in diesel fuel prices by adjusting total freight charges to account for changes in the price of diesel fuel.

The Company’s fuel surcharge is generally based on the average national price for diesel fuel and is reset weekly.

Fuel surcharges are widely accepted in the industry and are a significant component of revenue and pricing.

Fuel surcharges are an integral part of customer contract negotiations but represent only one portion of overall customer price negotiations, as customers may negotiate increases in base rates instead of increases in fuel surcharges or vice versa.

Fuel surcharge revenue increased to 19.9 percent of operating revenue in 2022 compared to 14.0 percent in 2021 primarily as a result of increases in the cost of diesel fuel.

Operating expenses and margin

Consolidated operating income was $470.5 million in 2022 compared to $335.1 million in 2021.

In summary, these results were favorably impacted by pricing actions and fuel margin, partially offset by salary and wage increases, higher purchased transportation costs, higher vehicle maintenance costs and increased depreciation expense.

The 2022 operating ratio (operating expenses divided by operating revenue) improved to 83.1 percent as compared to 85.4 percent in 2021.

Salaries, wages and employees’

benefits expense increased $105.8 million in 2022 compared to 2021 largely due to increased head count to support ongoing business growth and network expansion.

Additionally, in July 2022 the Company implemented a salary and wage increase of approximately 4.3 percent.

Purchased transportation expense increased $66.2 million in 2022 compared to 2021 primarily due to higher rates for purchased miles during 2022.

Fuel and other operating expenses increased by $180.5 million primarily driven by increases in underlying diesel fuel prices and miles driven and increased maintenance spend to ensure fleet availability to meet customer demand.

In addition, claims and insurance expense in 2022 was $4.7 million lower than 2021 largely due to positive claims development and settlements in 2022.

The Company can experience volatility in accident expense as a result of its self-insurance structure.

Depreciation and amortization expense increased $15.5 million in 2022 compared to 2021 primarily due to revenue equipment, real estate and technology investments.

Substantially all non-operating expenses represent interest expense.

Interest expense in 2022 was $0.6 million less than 2021 due to decreased average borrowings in 2022.

The effective income tax rate was 23.6 percent and 23.9 percent for the years ended December 31, 2022 and 2021, respectively.

Working capital

Working capital at December 31, 2022 was $256.8 million compared to $94.9 million at December 31, 2021.

This increase is primarily due to an increase in cash and cash equivalents and income tax receivable and decreases in accounts payable.

Cash flows from operating activities were $473.0 million for 2022 versus $382.6 million for 2021 largely driven by increased profitability.

For 2022, net cash used in investing activities was $365.5 million versus $277.8 million in 2021 primarily due to increased capital expenditures for revenue equipment, real estate and technology during 2022.

Net cash used in financing activities was $26.7 million in 2022 versus $23.5 million in 2021 as a result of equity based compensation shares withheld for taxes, partially offset by increased proceeds from stock option exercises during 2022.

Our business remains highly correlated to non-service sectors of the general economy and competitive pricing pressures, as well as the success of Company-specific improvement initiatives.

Our outlook is dependent on a number of external factors, including strength of the economy, inflation, labor availability, diesel fuel prices and supply chain constraints.

The potential impact of these factors on our operations, financial performance and financial condition, as well as the impact on our ability to successfully execute our business strategies and initiatives, remains uncertain and difficult to predict.

We are continuing initiatives to improve and enhance customer service in an effort to support our ongoing pricing and business mix optimization, while seeking to control costs and improve productivity.

Planned revenue initiatives include building density in our current geography, targeted marketing initiatives to grow revenue

in more profitable areas, further expanding our geographic and terminal network, as well as pricing and yield management.

On January 30, 2023 and January 24, 2022 Saia implemented 6.5 and 7.5 percent general rate increases, respectively, for customers comprising approximately 25 percent of Saia’s operating revenue.

The extent of success of this revenue initiative is impacted by what proves to be the underlying economic trends, competitor initiatives and other factors discussed under “Cautionary Note Regarding Forward-Looking Statements”

and Part I, Item 1A., “Risk Factors.”

Effective July 2022, the Company implemented a salary and wage increase of approximately 4.3 percent for all of its employees.

The total cost of the compensation increases is expected to be approximately $32.2 million annually, and the Company anticipates the impact will be partially offset by productivity and efficiency gains.

If the Company builds market share, including through its geographic and terminal expansion, it expects there to be numerous operating leverage cost benefits.

Conversely, should the economy continue to soften, the Company plans to match resources and capacity to shifting volume levels to lessen unfavorable operating leverage.

The success of cost improvement initiatives is impacted by a number of factors, including the cost and availability of drivers, dock workers and personnel, and purchased transportation, diesel fuel and insurance costs and inflation.

See “Cautionary Note Regarding Forward-Looking Statements”

and Part I, Item 1A., “Risk Factors,”

for a more complete discussion of potential risks and uncertainties that could materially adversely affect our financial condition, results of operation, cash flows and prospects.

Financial Condition, Liquidity and Capital Resources

The Company's liquidity needs arise primarily from capital investment in new equipment, land and structures, information technology and letters of credit required under insurance programs, as well as funding working capital requirements.

Credit Agreements

At December 31, 2022 the Company was party to a credit agreement with a banking group that provided for a $300 million line of credit with a term ending February 2024.

This credit agreement also had an accordion feature that allowed for an additional $100 million availability, subject to certain conditions and availability of lender commitments.

This credit agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement.

At December 31, 2022 and 2021, the Company had no borrowings outstanding under its credit agreement and outstanding letters of credit of $31.2 million and $29.3 million, respectively, under the credit agreement.

On February 3, 2023, the Company entered into a new unsecured credit agreement with a banking group (the 2023 Credit Agreement) and terminated its previous credit agreement.

The 2023 Credit Agreement maintains the amount of the previous line of credit of $300 million and extends the term until February 2028.

The 2023 Credit Agreement contains an accordion feature that allows the Company to increase the size of the facility by up to $150 million, subject to certain conditions, for a total borrowing capacity of up to $450 million.

Under the 2023 Credit Agreement, the Company is subject to a maximum consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00 with the potential to be temporarily increased in the event the Company makes an acquisition that meets certain criteria.

The 2023 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default.

Under the 2023 Credit Agreement, if an event of default occurs, the banks will be entitled to take various actions, including the acceleration of amounts due.

See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the credit agreements.

Finance Leases

The Company is obligated under finance leases with seven-year terms for revenue equipment totaling $31.0 million and $50.4 million as of December 31, 2022 and 2021, respectively.

Amortization of assets held under the finance leases is included in depreciation expense.

The weighted average interest rates for the finance leases at December 31, 2022 and 2021 were 3.74% and 3.55%, respectively.

Cash Flows and Expenditures

The Company has historically generated cash flows from operations to fund a large portion of its capital expenditure 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 on hand, operating cash flows and availability under its revolving credit agreement, which was $268.8 million at December 31, 2022.

Future operating cash flows are primarily dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable and wage and benefit accruals.

The Company was in compliance with its debt covenants at December 31, 2022.

Net capital expenditures pertain primarily to investments in tractors and trailers and other revenue equipment, information technology, land and structures.

Projected net capital expenditures for 2023 are expected to exceed $400 million, subject to ongoing evaluation of market conditions, compared to 2022 net capital expenditures of $365.5 million.

Projected 2023 capital expenditures include a normal replacement cycle of revenue equipment and technology investments for our operations.

In addition, the Company plans to add revenue equipment and real estate investments to support our growth initiatives.

See “Cautionary Note Regarding Forward-Looking Statements”

and Item 1A., “Risk Factors,”

for a more complete discussion of potential risks and uncertainties that could materially affect our future performance and financial condition.

Net capital expenditures, inclusive of equipment acquired using finance leases, are summarized in the following table (in millions):

Land and structures:

Revenue equipment, net

Technology and other

In addition to the amounts disclosed in the table above, the Company had an additional $19.5 million in capital expenditures for revenue equipment that was received but not paid for prior to December 31, 2022.

Contractual Obligations

Contractual obligations for the Company are comprised of lease agreements, purchase obligations and long-term debt obligations related to any outstanding balance under the Company’s line of credit.

Total contractual obligations for operating leases at December 31, 2022 totaled $141.2 million.

This includes operating leases with original maturities of less than one year, which are not recorded in our consolidated balance sheet in accordance with U.S.

generally accepted accounting principles.

Contractual obligations in the form of finance leases were $32.5 million at December 31, 2022, which include both principal and interest components.

Purchase obligations at December 31, 2022 were $118.9 million.

For further information see the Notes to the accompanying audited Consolidated Financial Statements in this Form 10-K.

As of December 31, 2022 there was no outstanding principal balance under the credit agreement.

Other commercial commitments of the Company typically include necessary letters of credit and surety bonds required for collateral under insurance agreements, and the outstanding available line of credit.

As of December 31,

2022 the Company had total outstanding letters of credit of $33.0 million and $73.7 million in surety bonds.

Additionally, the Company had $268.8 million available under its credit facility at December 31, 2022.

In addition to any principal amounts disclosed, the Company has interest obligations of approximately $2.0 million for 2023 and decreasing for each year thereafter, based on borrowings and commitments outstanding at December 31, 2022.

The Company has accrued approximately $3.9 million for uncertain tax positions and accrued interest and penalties of $0.4 million related to the uncertain tax positions as of December 31, 2022.

At December 31, 2022, the Company has $105.9 million accrued for claims, insurance and other liabilities.

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 .

o Description :

The Company is self-insured for portions of workers’

compensation, bodily injury and property damage, casualty, cargo loss and damage and group health claims.

o Judgments and Uncertainties :

Claims and insurance accruals for these claims are established by management based on estimates of losses that the Company will ultimately incur on reported claims and on claims that have been incurred but not yet reported.

Accruals are calculated on reported claims based on an evaluation of the nature and severity of the claim, historical loss experience and on legal, economic and other factors.

Actuarial analysis is also used in calculating the accrual for workers’

compensation and bodily injury and property damage claims.

o Sensitivity of Estimate to Change :

These accruals could be significantly affected if the actual costs of these claims differ from the estimates and assumptions used to establish the accruals.

A significant number of these claims typically take several years to develop and even longer to ultimately settle.

These accruals have been reasonably accurate over time;

however, changes to estimates and assumptions regarding severity of claims, medical cost inflation, as well as specific case facts can create short-term volatility in these accruals.

A 100 basis point change in our loss development factors would result in an immaterial change in the claims and insurance accruals.

There have been no material changes in the development factor for the year ended December 31, 2022.

Revenue Recognition and Related Allowances .

o Description :

Revenue is recognized over the transit time of the shipment as it moves from origin to destination while expenses are recognized as incurred.

Estimates included in the recognition of revenue and accounts receivable include estimates related to shipments in transit and estimates of future adjustments to revenue and accounts receivable for billing adjustments and collectability.

o Judgments and Uncertainties :

Revenue is recognized in a systematic process whereby estimates related to shipments in transit are based upon actual bills of lading received near period end and the estimated percentage of completion of the service at period end.

Estimates for credit losses and billing adjustments are based upon historical experience.

Billing adjustments are primarily made for discounts and billing corrections.

o Sensitivity of Estimate to Change :

Since the cycle for pick-up and delivery of shipments is generally one to five days, typically less than five percent of a total month’s revenue is in transit at the end of any month.

Estimates included in the recognition of revenue and accounts receivable are continuously evaluated and updated;

however, changes in economic conditions, customer creditworthiness, pricing arrangements and other factors may significantly impact these estimates.

Depreciation of Assets .

o Description :

Under the Company’s accounting policy for property and equipment, management establishes depreciable lives and salvage values for the Company’s revenue equipment (tractors and trailers) based on their estimated useful lives and estimated residual values to be received when the equipment is sold or traded in.

These estimates are routinely evaluated and updated when circumstances warrant.

o Judgments and Uncertainties :

Selecting the appropriate accounting method for depreciation requires management judgment, as there are multiple acceptable methods that are in accordance with U.S generally accepted accounting principles, including straight-line, declining-balance, and sum-of-the-years' digits.

The Company depreciates property and equipment on straight-line and declining-balance bases over the estimated useful lives of the assets.

The Company believes these methods properly spread the costs over the useful lives of the assets.

Factors affecting estimated useful lives and residual values of property and equipment may include estimating loss, damage, obsolescence, and Company policies around maintenance and asset replacement.

o Sensitivity of Estimate to Change :

Actual useful lives and residual values could differ from these assumptions based on market conditions and other factors, thereby impacting the estimated amount or timing of depreciation expense.

There have been no material effects of changes to judgments related to depreciation expense for the year ended December 31, 2022.

These accounting policies and others are described in further detail in the Notes to the audited Consolidated Financial Statements included in this Form 10-K.

The preparation of financial statements in accordance with U.S.

generally accepted accounting principles requires management to adopt accounting policies and make significant judgments and estimates to develop amounts reflected and disclosed in the consolidated 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 consolidated financial statements.

However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information.

Quantitative and Qualitat ive Disclosures About Market Risk

The Company is exposed to a variety of market risks including the effects of interest rates and diesel fuel prices.

The detail of the Company’s debt structure is more fully described in the Notes to the audited Consolidated Financial Statements set forth in this Form 10-K.

To help mitigate our exposure to rising diesel fuel prices, the Company has an established fuel surcharge program.

The following table provides information about the Company’s debt as of December 31, 2022.

The table presents cash flows for principal payments (in millions) and related weighted average interest rates by contractual maturity dates.

The fair value of the fixed rate debt (in millions) was estimated based upon level two in the fair value hierarchy, respectively.

The fair value of the finance leases is based on current market interest rates for similar types of financial instruments.

Expected maturity date

As of December 31, 2022

Fixed rate debt

Average interest rate

Financial Statemen ts and Supplementary Data

FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets —

December 31, 2022 and 2021

Consolidated Statements of Operations —

Years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Stockholders’

Equity —

Years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Cash Flows —

Years ended December 31, 2022, 2021 and 2020

Notes to Consolidated Financial Statements

Report of Independent Regis tered Public Accounting Firm

To the Stockholders and Board of Directors

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Saia, Inc.

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’

equity and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the estimated liabilities for self-insured workers’

compensation and bodily injury claims

As discussed in Note 1 to the consolidated financial statements, the Company has recorded estimated liabilities for claims related to workers’

compensation and bodily injury.

These liabilities are recorded within claims and insurance accruals (current) of $45.5 million, and claims, insurance, and other (non-current) of $60.4 million, as of December 31, 2022.

We identified the evaluation of the estimated liabilities for self-insured workers’

compensation and bodily injury claims as a critical audit matter because of the inherent uncertainty in the amounts that will ultimately be

paid to settle these claims.

Factors that may affect the settlement cost of claims include the length of time the claim remains open, its potential severity, and the results of litigation.

Additionally, the Company’s liabilities include estimates for future development of claims and specialized skills were needed to evaluate the actuarial methods and assumptions used to make these estimates.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s self-insurance processes, including controls over the methods and assumptions used in estimating the liability.

We evaluated the Company’s estimated liabilities for self-insured workers’

compensation and bodily injury claims by selecting a sample of claims and considering current available information, which may include legal claims, incident and case reports, historical experience, and attorneys’

letters we received directly from the Company’s external counsel.

In addition, we involved an actuarial professional with specialized skills and knowledge, who assisted by comparing the Company’s actuarial methods with generally accepted actuarial methods and evaluating the key assumptions used in determining the liabilities.

We have served as the Company’s auditor since 2002.

Atlanta, Georgia

February 23, 2023

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Opinion on Internal Control Over Financial Reporting

We have audited Saia, Inc.

and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’

equity and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 23, 2023 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Atlanta, Georgia

February 23, 2023

and Subsidiaries

Consolidated B alance Sheets

(in thousands, except share and per share data)

December 31, 2022

December 31, 2021

Current Assets:

Cash and cash equivalents

Accounts receivable, less allowances of $ 5,804 in 2022 and $ 5,530 in 2021

Prepaid expenses

Income tax receivable

Other current assets

Total current assets

Property and Equipment, at cost

Less-accumulated depreciation and amortization

Net property and equipment

Operating Lease Right-of-Use Assets

Goodwill and Identifiable Intangibles, net

Other Noncurrent Assets

LIABILITIES AND STOCKHOLDERS’

Current Liabilities:

Accounts payable

Wages, vacation and employees’

Claims and insurance accruals

Other current liabilities

Current portion of long-term debt

Current portion of operating lease liability

Total current liabilities

Other Liabilities:

Long-term debt, less current portion

Operating lease liability, less current portion

Deferred income taxes

Claims, insurance and other

Total other liabilities

Stockholders’

Preferred stock, $ 0.001 par value, 50,000 shares authorized,

none issued and outstanding

Common stock, $ 0.001 par value, 100,000,000 shares authorized,

26,464,197 and 26,336,589 shares issued and outstanding at

December 31, 2022 and 2021, respectively

Additional paid-in-capital

Deferred compensation trust, 69,982 and 94,627 shares of common

stock at cost at December 31, 2022 and 2021, respectively

Retained earnings

Total stockholders’

Total liabilities and stockholders’

See accompanying notes to consolidated financial statements.

and Subsidiaries

Consolidated Statem ents of Operations

For the years ended December 31, 2022, 2021 and 2020

(in thousands, except per share data)

Operating Revenue

Operating Expenses:

Salaries, wages and employees’

Purchased transportation

Fuel, operating expenses and supplies

Operating taxes and licenses

Claims and insurance

Depreciation and amortization

Operating (gains) losses, net

Total operating expenses

Operating Income

Non-operating Expenses (Income):

Interest expense

Non-operating expenses, net

Income Before Income Taxes

Income Tax Expense

Weighted average common shares outstanding –

Basic Earnings Per Share

Diluted Earnings Per Share

See accompanying notes to consolidated financial statements.

and Subsidiaries

Consolidated Statements of Stockholders’

For the years ended December 31, 2022, 2021 and 2020

(in thousands)

Common Shares

Additional Paid-in Capital

Deferred Compensation Trust

Retained Earnings

BALANCE at December 31, 2019

Stock compensation, including options and long-term incentives

Director deferred share activity

Exercise of stock options less shares withheld for taxes

Shares issued for long-term incentive awards, net of shares withheld for taxes

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at December 31, 2020

Stock compensation, including options and long-term incentives

Director deferred share activity

Exercise of stock options less shares withheld for taxes

Shares issued for long-term incentive awards, net of shares withheld for taxes

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at December 31, 2021

Stock compensation, including options and long-term incentives

Director deferred share activity

Exercise of stock options less shares withheld for taxes

Shares issued for long-term incentive awards, net of shares withheld for taxes

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at December 31, 2022

See accompanying notes to consolidated financial statements.

and Subsidiaries

Consolidated Statem ents of Cash Flows

For the years ended December 31, 2022, 2021 and 2020

(in thousands)

Operating Activities:

Noncash items included in net income:

Depreciation and amortization

Provision for doubtful accounts

Deferred income taxes

Loss (gain) from property disposals, net

Stock-based compensation

Changes in operating assets and liabilities:

Accounts receivable

Accounts payable

Net cash provided by operating activities

Investing Activities:

Acquisition of property and equipment

Proceeds from disposal of property and equipment

Investment in equity securities

Net cash used in investing activities

Financing Activities:

Repayment of revolving credit agreement

Borrowing of revolving credit agreement

Proceeds from stock option exercises

Shares withheld for taxes

Repayment of finance leases

Net cash used in financing activities

Net Increase in Cash and Cash Equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

See accompanying notes to consolidated financial statements.

and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2022, 2021 and 2020

Description of Business and Summary of Accounting Policies

Description of Business

Saia, Inc., and its subsidiaries (Saia or the Company), is headquartered in Johns Creek, Georgia.

Saia is a leading, less-than-truckload (LTL) motor carrier with more than 96 % of its revenue derived from transporting LTL shipments for customers.

In addition to the core LTL services provided in 45 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited transportation and logistics services across the United States.

The Chief Operating Decision Maker is the Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources.

The Company has one operating segment.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Saia, Inc.

and its wholly-owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

The preparation of our consolidated financial statements in conformity with U.S.

generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses.

Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared.

Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management.

Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include:

revenue reserves;

self-insurance accruals;

long-term incentive compensation;

tax liabilities;

loss contingencies;

litigation claims;

and impairment assessments on long-lived assets and goodwill.

Accounting Pronouncements Adopted in 2021

In 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, ”

which is intended to simplify various aspects related to accounting for income taxes.

This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

The Company adopted the standard effective January 1, 2021 and, upon adoption, this standard did not have a material impact on its consolidated financial statements or related disclosures.

Summary of Accounting Policies

Significant accounting policies and practices used in the preparation of the accompanying consolidated financial statements are as follows:

Cash and Cash Equivalents and Checks Outstanding:

Cash and cash equivalents includes cash on hand and short term marketable securities with original maturities of three months or less.

Spare Parts, Fuel and Operating Supplies:

Spare parts, fuel and operating supplies on hand are carried at average cost and are included in other current assets on the accompanying consolidated balance sheets.

Property and Equipment:

Property and equipment are carried at cost less accumulated depreciation.

Replacements and improvements that extend the useful life of an asset are capitalized, while repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred.

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of assets may not be recoverable.

Depreciation is computed using the straight-line method, except for tractors (included in revenue equipment) for which the declining-balance method is used.

The following service lives are used to compute depreciation:

Revenue equipment

Technology equipment and software

At December 31, property and equipment consisted of the following (in thousands):

Revenue equipment

Technology equipment and software

Total property and equipment, at cost

The Company’s investment in technology equipment and software consists primarily of systems to support customer service, maintenance and freight management.

Depreciation and amortization expense (including amortization of assets under finance leases) was $ 156.2 million, $ 140.5 million and $ 133.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

At December 31, 2022, trailers acquired under finance leases had a gross carrying value of $ 137.9 million and accumulated amortization of $ 58.7 million.

At December 31, 2021, trailers acquired under finance leases had a gross carrying value of $ 137.9 million and accumulated amortization of $ 49.4 million.

Claims and Insurance Accruals:

The Company maintains a significant amount of insurance coverage with third-party insurance carriers that provides various levels of protection for covered risk exposure, including in the areas of workers’

compensation, bodily injury and property damage, casualty, cargo loss and damage and group health, with coverage limits and retention and deductible amounts that vary based on policy periods and claim type.

Claims and insurance accruals related to workers’

compensation, bodily injury and property damage, casualty, cargo loss and damage and group health are established by management based on estimates of losses that the Company will ultimately incur on reported claims and on claims that have been incurred but not yet reported.

Accruals are calculated on reported claims based on an evaluation of the nature and severity of the claim, historical loss experience and on legal, economic and other factors.

Actuarial analysis is also used in calculating the accruals for workers’

compensation and bodily injury and property damage claims.

Income Taxes:

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period enacted.

As required by FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes , the Company defines the threshold for recognizing the benefits of tax-filing positions in the financial statements as “more-likely-than-not”

to be sustained by the tax authority.

Revenue Recognition:

The Company’s revenues are derived primarily from the transportation of freight as it satisfies performance obligations that arise from contracts with its customers.

The Company’s performance obligations arise when it receives a bill of lading (BOL) to transport a customer's commodities at negotiated prices contained in either a transportation services agreement or a publicly disclosed tariff rate.

Once a BOL is received and accepted, a legally-enforceable contract is formed whereby the parties are committed to perform and the rights of the parties, shipping terms and conditions, and payment terms have been identified.

Each shipment represents a distinct service that is a separately identified performance obligation.

The typical transit time to complete a shipment is from one to five days .

Billing for transportation services normally occurs after completion of the service and payment is generally due within 30 days after the invoice date.

The Company recognizes revenue related to the Company’s LTL, non-asset truckload and expedited transportation services over the transit time of the shipment as it moves from origin to destination based on the transit status at the end of each reporting period.

Key estimates included in the recognition and measurement of revenue and related accounts receivable are as follows:

Revenue associated with shipments in transit is recognized ratably over transit time;

Adjustments to revenue for billing adjustments and collectability.

The portion of the gross invoice related to interline transportation services that involve the services of another party, such as another LTL service provider, is not recorded in the Company’s revenues.

Revenue from logistics services is recognized as the services are provided.

The Company routinely grants credit to its customers.

The risk of significant loss in trade receivables is substantially mitigated by the Company’s credit evaluation process, short collection terms, low revenue per transaction and services performed for a large number of customers with no single customer representing more than 5 percent of accounts receivable at year-end.

Allowances for potential credit losses are based on historical loss experience, current economic environment, expected trends and customer specific factors.

Stock-Based Compensation:

The Company has various stock-based compensation plans for its employees and non-employee directors.

The Company stock-based compensation includes awards of stock options, restricted stock awards, and stock-based compensation unit awards, all of which are accounted for under FASB ASC Topic 718, Compensation-Stock Compensation .

Stock options granted to employees are valued using a Black-Scholes-Merton model with the expense amortized over the three-year vesting period.

Restricted stock is valued based on the fair market value of the Company's common stock at the date of grant and the expense is amortized over the three to five year vesting period.

Stock-based performance unit awards are valued using a Monte Carlo model and the expense is amortized over the three-year vesting period.

Intangible Assets:

The Company tests goodwill for impairment annually and whenever events or changes in circumstance indicate that impairment may have occurred.

The Company first performs a qualitative assessment to determine whether it is necessary to perform a required two-step goodwill impairment test.

The Company is not required to estimate the fair value of a reporting unit unless the Company determines, based on qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount.

Purchased intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The costs of advertising are expensed as incurred.

Advertising costs charged to expense were $ 7.2 million, $ 5.7 million, and $ 4.6 million in 2022, 2021 and 2020 , respectively.

Financial Instruments:

The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximated fair value as of December 31, 2022 and 2021 , because of the relatively short maturity of these instruments.

See Note 2 for fair value disclosures related to debt.

Debt and Financing Arrangements

At December 31, debt consisted of the following (in thousands):

December 31, 2022

December 31, 2021

Credit Agreement with Banks, described below

Finance Leases, described below

current portion of long-term debt

Long-term debt, less current portion

The Company is party to a credit agreement with a group of banks to fund capital investments, letters of credit and working capital needs.

Credit Agreements

At December 31, 2022, the Company was a party to a Sixth Amended and Restated Credit Agreement with a banking group (the Amended Credit Agreement), which provided up to a $ 300 million line of credit through February 2024 .

The Amended Credit Agreement also had an accordion feature that allowed for an additional $ 100 million availability, subject to certain conditions and availability of lender commitments.

Under the Amended Credit Agreement, the Company was required to maintain a minimum debt service coverage ratio set at 1.25 to 1.00 and a maximum leverage ratio set at 3.25 to 1.00.

The Amended Credit Agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement.

The Amended Credit Agreement contained certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default.

At December 31, 2022 and 2021, the Company had no outstanding borrowings and outstanding letters of credit of $ 31.2 million and $ 29.3 million, respectively, under the Amended Credit Agreement.

On February 3, 2023, the Company entered into a new unsecured credit agreement with a banking group (the 2023 Credit Agreement) and terminated the Amended Credit Agreement.

The 2023 Credit Agreement maintains the amount of the previous line of credit of $ 300 million and extends the term until February 2028.

The 2023 Credit Agreement contains an accordion feature that allows the Company to increase the size of the facility by up to $ 150 million, subject to certain conditions, for a total borrowing capacity of up to $ 450 million.

The 2023 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default.

Under the 2023 Credit Agreement, if an event of default occurs, the banks will be entitled to take various actions, including the acceleration of amounts due.

Finance Leases

The Company is obligated under finance leases with seven-year terms which include obligations collateralized by revenue equipment totaling $ 31.0 million and $ 50.4 million as of December 31, 2022 and 2021, respectively.

Amortization of assets held under the finance leases is included in depreciation and amortization expense.

The estimated fair value of the finance leases at December 31, 2022 and 2021 is $ 31.2 million and $ 50.8 million, respectively, which is based on current market interest rates for similar types of financial instruments, reflective of Level 2 inputs.

The Company paid cash for interest of $ 2.3 million, $ 3.0 million, and $ 5.9 million for the years ended December 31, 2022, 2021 and 2020 , respectively.

Commitments, Contingencies and Uncertainties

The Company has contractual obligations and commitments in the form of finance leases, operating leases and purchase commitments.

At December 31, 2022, the Company was committed under non-cancellable operating lease agreements requiring minimum annual rentals payable as follows (in thousands):

(1) In April 2021, the Company committed to an additional terminal lease estimated to commence in 2023 of approximately $ 57 million with a lease term of 15 years with annual rent ranging from $ 3.1 million to $ 4.6 million.

Annual rental payments under this lease are not included in this table.

Rent expense was $ 33.4 million, $ 31.6 million, and $ 30.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Management expects that in the normal course of business, leases will be renewed or replaced as they expire.

Finance and operating leases are discussed further in Note 4.

Purchase commitments related to capital expenditures were $ 117.2 million at December 31, 2022.

As of December 31, 2022 and 2021, the Company had $ 19.5 million and $ 24.2 million, respectively, of capital expenditures accrued for in accounts payable.

The Company is subject to legal proceedings that arise in the ordinary course of its business.

Management believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable and estimable losses and that the ultimate outcome of these actions will not have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations in a given quarter or annual period.

The Company’s leases include but are not limited to real estate, including terminals and general office buildings, trailers, corporate fleet vehicles and other equipment.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet;

the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

As of December 31, 2022 and 2021, approximately $ 60.5 million and $ 85.1 million , respectively, of finance leased assets, net of depreciation and amortization, were included in property and equipment.

Accumulated depreciation and amortization for these assets totaled $ 43.8 million and $ 53.5 million as of the same periods ended.

A summary of the lease costs for the years ended December 31, 2022 and 2021 follows (in thousands):

Finance lease cost:

Amortization of right-of-use assets

Interest on lease liabilities

Operating lease cost (includes variable and sublease costs as they are immaterial)

Short-term lease cost

Total lease cost

Other Information

Right-of-use assets obtained in exchange for new finance lease liabilities

Right-of-use assets obtained in exchange for new operating lease liabilities

The discount rate used in the Company's calculation of its right-of-use assets and corresponding lease liabilities was determined based on the stated rate within each contract when available, or its incremental borrowing rate, which approximates the rate at which the Company could borrow, on a collateralized basis, over the term of a lease.

Supplemental cash flow and balance sheet information related to leases was as follows (in thousands, except where noted):

Cash paid for amounts included in the measurement of lease liabilities

Operating cash outflows from finance leases

Operating cash outflows from operating leases

Financing cash outflows from finance leases

Weighted-average remaining lease term - finance leases (years)

Weighted-average remaining lease term - operating leases (years)

Weighted-average discount rate - finance leases

Weighted-average discount rate - operating leases

As of December 31, 2022, maturities of lease liabilities were as follows (in thousands):

Operating Leases

Finance Leases

Maturity of Lease Liabilities

Total lease payments

Present value of lease liabilities

Goodwill and Other Intangible Assets

There was no change to the carrying amount of goodwill of $ 12.1 million for fiscal years ending December 31, 2022, 2021 and 2020, respectively.

The gross amounts and accumulated amortization of identifiable intangible assets are as follows (in thousands):

December 31, 2022

December 31, 2021

Accumulated Amortization

Amortizable intangible assets:

Customer relationships (useful life of 6 - 15 years )

Trademarks (useful life of 15 years)

Amortization expense for intangible assets was $ 1.0 million for 2022 and $ 1.2 million in 2021 and 2020 .

Estimated amortization expense for the next five years is as follows (in thousands):

Computation of Earnings Per Share

The calculation of basic earnings per common share and diluted earnings per common share is as follows (in thousands except per share amounts):

For The Years Ended December 31,

Denominator for basic earnings per share–weighted

average common shares

Dilutive effect of share-based awards

Denominator for diluted earnings per share–adjusted

weighted average common shares

Basic Earnings Per Share

Diluted Earnings Per Share

In 2022, there were 22,237 anti-dilutive options or restricted stock.

In 2021, there were 19,386 anti-dilutive options or restricted stock.

Stockholders’

Deferred Compensation Trust

The Saia Executive Capital Accumulation Plan (the Capital Accumulation Plan) allows plan participants to make an irrevocable election to invest in the Company’s common stock.

Upon distribution, the funds invested in the Company’s common stock are paid out in Company stock rather than cash.

The following table summarizes the shares of the Company’s common stock that were purchased and sold by the Company’s rabbi trust, which holds the investments for the Capital Accumulation Plan:

For The Years Ended December 31,

Shares of common stock purchased

Aggregate purchase price of shares purchased

Shares of common stock sold

Aggregate sale price of shares sold

Since the Capital Accumulation Plan requires the obligation to be settled in Company stock, the deferred compensation obligation is classified as an equity instrument, with no adjustments to operating results based on changes in fair value.

Directors’

Deferred Compensation

Under the Company’s Directors’

Deferred Fee Plan, non-employee directors may elect to defer all or a portion of their annual fees and retainers.

Such deferrals are converted into units equivalent to the value of the Company’s stock.

Upon the director’s termination, death or disability, accumulated deferrals are distributed in the form of Company common stock.

The Company had 97,381 and 94,109 shares reserved for issuance under the Directors’

Deferred Fee Plan at December 31, 2022 and 2021 , respectively.

The shares reserved for issuance under the Directors’

Deferred Fee Plan are treated as common stock in computing basic earnings per share.

Stock-Based Compensation

The stockholders of the Company approved the 2018 Omnibus Incentive Plan (the 2018 Omnibus Plan) and the Second Amended and Restated 2011 Omnibus Incentive Plan (the 2011 Omnibus Plan) to allow the Company to issue equity based compensation to help attract and retain executive, managerial, supervisory or professional employees and non-employee directors.

The 2018 Omnibus Plan has 1,100,000 shares of common stock reserved.

The 2011 Omnibus Plan had a total of 2,350,000 shares of common stock reserved.

Following stockholder approval of the 2018 Omnibus Plan, no additional awards have been made under the 2011 Omnibus Plan.

The 2018 Omnibus Plan and the 2011 Omnibus Plan provide for the grant or award of stock options;

stock appreciation rights;

restricted and unrestricted stock;

restricted stock units;

and performance unit awards.

At December 31, 2022 and 2021, 391,089 shares remain reserved and unissued under the provisions of the 2011 Omnibus Plan, a portion of which are allocated to outstanding stock options described below.

At December 31, 2022 and 2021, 765,617 and 876,641 shares, respectively, remain reserved and unissued under the provisions of the 2018 Omnibus Plan, a portion of which are allocated to outstanding performance unit awards, outstanding stock options and restricted stock described below.

The Company has historically issued new shares to satisfy stock option exercises or other awards issued under the 2018 Omnibus Plan and 2011 Omnibus Plan.

Stock option awards have been granted with an exercise price equal to the market price of the Company’s stock at the date of grant.

Stock option awards granted to employees under the plans to date are non-qualified stock options, have vesting over three years , subject to earlier vesting upon a change of control and certain other events, and have a seven-year contractual term.

All outstanding stock options held by non-employee directors were granted to the director while employed by Saia, and total 15,780 shares as of December 31, 2022.

The Company grants shares of restricted stock as part of its long-term incentive plan.

These shares of restricted stock cliff vest in three years , subject to earlier vesting upon a change in control.

The value of restricted stock is based on the fair market value of the Company’s common stock at the date of grant.

In addition, the Company has periodically granted shares of restricted stock to certain key executives that vests 25 % after three years , 25 % after four years and the remaining 50 % after five years , assuming the executive has been in continuous service to the Company since the award date, subject to earlier vesting upon a change in control.

Stock option and restricted stock compensation expense of $ 3.9 million, $ 3.3 million and $ 2.8 million, was recorded for the years ended December 31, 2022, 2021 and 2020, respectively, and is included in salaries, wages and employees’

As of December 31, 2022, there is unrecognized compensation expense of $ 5.2 million related to unvested stock options and restricted stock, which is expected to be recognized over a weighted average period of 2.2 years.

The following table summarizes stock option activity for the year ended December 31, 2022 for employees:

Weighted Average Exercise price

Weighted Average Remaining Contractual Life

Aggregate Intrinsic Value

(in thousands)

Outstanding at December 31, 2021

Outstanding at December 31, 2022

Exercisable at December 31, 2022

The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $ 10.8 million, $ 5.9 million, and $ 8.3 million, respectively.

The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2022, 2021 and 2020 was $ 94.36 , $ 62.65 , and $ 25.40 , respectively.

The following table summarizes the weighted average assumptions used in valuing options for the years ended December 31, 2022, 2021 and 2020:

Risk-free interest rate

Expected life in years

Expected volatility

Dividend rate

The risk-free interest rate for periods within the contractual life of the option is based on a three-month average U.S.

Treasury yield at the time of grant.

The expected life of the options represents the period of time that options granted are expected to be outstanding.

Expected volatilities are based on historical volatility of the Company’s stock.

The following table summarizes restricted stock activity during the year ended December 31, 2022:

Weighted Average Grant-date Fair Value

Restricted Stock at December 31, 2021

Restricted Stock at December 31, 2022

The total fair value of restricted stock shares that vested during the years ended December 31, 2022, 2021, and 2020 were $ 2.1 million, $ 1.4 million and $ 1.1 million, respectively.

Performance Unit Awards

The Company grants performance unit awards to executives as part of the Company’s long term incentive plan.

The criteria for payout of the awards is based on a comparison over the three-year performance period of these awards of the total stockholder return (TSR) of the Company’s common stock compared to the TSR of the companies in a peer group established by the Compensation Committee.

The stock-based awards are accounted for in accordance

with ASC Topic 718 with the expense amortized over the three-year vesting period based on the fair value of the awards at the grant date using the Monte Carlo method.

Operating results include expense for the performance unit awards of $ 3.8 million in 2022 , $ 4.0 million in 2021 and $ 3.5 million in 2020.

Shares earned under the performance unit awards are issued in the first quarter of the year following the end of the performance period.

There was an issuance of 63,188 shares for the January 2020 - December 2022 performance period in February 2023, 78,710 shares for the January 2019 - December 2021 performance period in February 2022, and 58,662 shares for the January 2018 - December 2020 performance period in February 2021.

At December 31, 2022, performance unit awards are outstanding for a maximum of 26,654 shares for the January 2021 –

December 2023 performance period and for a maximum of 25,020 shares for the January 2022 –

December 2024 performance period.

As of December 31, 2022, there is unrecognized compensation expense of $ 4.3 million related to unvested performance unit awards, which is expected to be recognized over a weighted average period of 1.7 years.

The following table summarizes performance unit awards during the year ended December 31, 2022:

Weighted Average Grant-date Fair Value

Performance Unit Awards at December 31, 2021

Added by performance factor

Performance Unit Awards at December 31, 2022

The total fair value of performance unit awards shares that vested during the years ended December 31, 2022, 2021, and 2020 were $ 3.6 million, $ 3.0 million and $ 2.3 million, respectively.

Director Awards

The 2018 Omnibus Plan provides for an annual grant to each non-employee director of shares of Saia stock with a value not to exceed $ 500,000 with the number of shares to be determined each year by the Compensation Committee.

For 2022, 2021 and 2020 each non-employee director was granted 396 , 548 and 1,098 shares, respectively of Saia stock under the 2018 Omnibus Plan.

These shares vest in one year from grant, subject to accelerated vesting upon leaving the Board (other than for cause) or a change in control.

Under the Director’s Deferred Fee Plan, non-employee directors may defer all or a portion of annual fees and awards earned.

The deferrals are converted into phantom stock units equivalent to the value of Company common stock.

Upon the director’s termination, death or disability, accumulated deferrals are distributed in the form of Company common stock in accordance with elections made by the directors.

Non-employee directors were issued 3,272 ;

and 9,379 units equivalent to shares in the Company's common stock under the Directors' Deferred Fee Plan during the years ended December 31, 2022, 2021 and 2020 , respectively.

Employee Benefits

Defined Contribution Plans

The Company sponsors defined contribution plans, principally consisting of contributory 401(k) savings plans and noncontributory profit sharing plans.

The Company’s contributions to the 401(k) savings plans consist of a matching percentage.

The Company match has historically been 50 percent of the first six percent of an eligible employee’s contributions.

The Company’s total contributions to the 401(k) savings plans included in continuing operations for the years ended December 31, 2022, 2021 and 2020, were $ 14.0 million, $ 12.4 million, and $ 8.0 million, respectively.

Deferred Compensation Plan

The Saia Executive Capital Accumulation Plan is a nonqualified deferred compensation plan for Saia executives.

The Capital Accumulation Plan allows for the plan participants to invest in the Company’s common stock.

Elections to invest in the Company’s common stock are irrevocable, and upon distribution, the funds invested in the Company’s common stock are paid out in Company common stock rather than cash.

At December 31, 2022 and 2021, the Company’s rabbi trust, which holds the investments for the Capital Accumulation Plan, held 69,982 and 94,627 shares of the Company’s common stock, respectively, all of which were purchased on the open market.

Cash Incentive Awards

The Company provides cash incentive awards to certain salaried employees which are based primarily on actual operating results achieved for the year, compared to targeted operating results.

Operating results include cash incentive awards of $ 32.6 million, $ 36.4 million, and $ 19.0 million in 2022, 2021 and 2020, respectively.

Included in these amounts are also incentives that are based on other targets specifically associated with the respective employees' positions.

Employee Stock Purchase Plan

In January 2003, the Company adopted the Employee Stock Purchase Plan of Saia, Inc.

(the ESPP) allowing eligible employees to purchase common stock of the Company at current market prices through payroll deductions of up to 10 percent of annual wages.

In 2015, the Company amended the ESPP to allow highly compensated employees as defined by Section 401(a)(17) of the Internal Revenue Code to make payroll deductions of up to 20 percent of annual wages.

The custodian uses the funds to purchase the Company’s common stock at current market prices.

The custodian purchased 2,158 ;

2,516 and 5,682 shares in the open market during 2022, 2021 and 2020 , respectively.

The income tax provision consists of the following (in thousands):

Total current income tax provision

Total deferred income tax provision

Total income tax provision

A reconciliation between income taxes at the federal statutory rate (21 percent) and the actual income tax provision is as follows (in thousands):

Provision at federal statutory rate

State income taxes, net of federal benefit

Excess tax benefit on stock compensation

Total provision

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred tax (liabilities) assets are comprised of the following at December 31 (in thousands):

Gross deferred tax liabilities

Allowance for doubtful accounts

Equity-based compensation

Employee benefits

Claims and insurance

Gross deferred tax assets

Net deferred tax liability

The Company has determined that a valuation allowance was not necessary at December 31, 2022 or 2021 for substantially all deferred tax assets since it is more likely than not they will be realized from future reversals of temporary differences or future taxable income.

The Company and its subsidiaries file income tax returns in the U.S.

federal jurisdiction and various state jurisdictions.

federal jurisdiction, tax years 2019 - 2022 remain open to examination.

The expiration of the statute of limitations related to the various state income tax returns that the Company files varies by state.

In general, tax years 2013 - 2022 remain open to examination by the various state and local jurisdictions.

However, a state could challenge certain tax positions back to the 2009 tax year.

A reconciliation of the beginning and ending total amounts of gross unrecognized tax benefits is as follows (in thousands):

Gross unrecognized tax benefits at beginning of year

Gross (decreases) increases in tax positions for prior years

Gross increases in tax positions for current year

Lapse of statute of limitations

Gross unrecognized tax benefits at end of year

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense.

The total amount of unrecognized tax benefits, which is recorded within claims, insurance and other liabilities on the consolidated balance sheets, that would affect the Company’s effective tax rate if recognized is $ 3.9 million and $ 1.4 million as of December 31, 2022 and 2021, respectively.

The Company paid cash for income taxes of $ 115.3 million, $ 81.6 million, and $ 10.0 million in 2022, 2021 and 2020, respectively.

The Company does not anticipate total unrecognized tax benefits will significantly change during the next twelve months due to the settlements of audits and the expiration of statutes of limitations.

Valuation and Qualifying Accounts

The following is a rollforward of the allowance for doubtful accounts for receivables (in thousands):

Balance, beginning of period

Charged to costs and expenses

Charged to other accounts

Deductions(1)

Balance, end of period

For the period ended December 31, 2022

For the period ended December 31, 2021

For the period ended December 31, 2020

(1) Primarily uncollectible accounts written off —

net of recoveries.

Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity