SAIA filing — read by section

Item 7. Management’s Discussion and Analysis

Item 7. 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 2023 and 2022 results and year-to-year comparisons between 2023 and 2022. Discussions of our 2021 results and year-to-year comparisons between 2022 and 2021 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, 2022, which was filed with the Securities and Exchange Commission on February 23, 2023. 

 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; 

 • unexpected liabilities resulting from the acquisition of real estate assets; 

 • 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; 

 • liabilities and costs arising from the use of artificial intelligence; 

 • 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; 

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 • 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; 

 • costs from new and existing laws regarding how to classify workers; 

 • changes in accounting and financial standards or practices; 

 • widespread outbreak of an illness or any other communicable disease; 

 • international conflicts and geopolitical instability; 

 • 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; and 

 • 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. Components of this strategy include building density in existing geography and pursuing geographic and terminal expansion in an effort 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 

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 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 3.2 percent in 2023 compared to 2022. The increase was due to increased yield, excluding fuel surcharges, as a result of pricing actions and changes in business mix, which included 6.5 and 7.5 percent general rate increases on January 30, 2023 and December 4, 2023, respectively, for customers subject to general rate increases. Additionally, the Company experienced year over year increases in shipments and tonnage partially as a result of the redistribution of freight due to industry consolidation mid-year. These increases were offset by a decrease in fuel surcharge revenue, resulting from lower diesel fuel prices. 

 Consolidated operating income declined to $460.5 million for 2023 compared to $470.5 million in 2022. The decrease in 2023 operating income resulted primarily from increases in salaries, wages and benefits and depreciation expense which was partially offset by increased revenue and decreased purchased transportation. 

 The Company generated $577.9 million in net cash provided by operating activities in 2023 versus $473.0 million in 2022. The Company used $448.7 million of net cash in investing activities during 2023 compared to $365.5 million during 2022. 

 General 

 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 97% 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. 

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 Results of Operations 

 Saia, Inc. and Subsidiaries 

 Selected Results of Operations and Operating Statistics 

 For the years ended December 31, 2023 and 2022 

 (in thousands, except ratios, workdays, revenue per hundredweight, 

 revenue per shipment, pounds per shipment and length of haul) 

 Percent 
 
 Variance 
 
 2023 
 
 2022 
 
 '23 v. '22 
 
 Operating Revenue 
 
 $2,881,433 
 
 $2,792,057 
 
 3.2 
 
 % 
 
 Operating Expenses: 
 
 Salaries, wages and employees’ benefits 
 
 1,301,280 
 
 1,169,539 
 
 11.3 
 
 Purchased transportation 
 
 238,688 
 
 315,896 
 
 (24.4) 
 
 Fuel and other operating expenses 
 
 702,124 
 
 678,931 
 
 3.4 
 
 Depreciation and amortization 
 
 178,845 
 
 157,203 
 
 13.8 
 
 Operating Income 
 
 460,496 
 
 470,488 
 
 (2.1) 
 
 Operating Ratio 
 
 84.0% 
 
 83.1% 
 
 Non-operating (Income) Expenses, Net 
 
 (5,731) 
 
 2,440 
 
 (334.9) 
 
 Working Capital (as of December 31, 2023 and 2022) 
 
 326,638 
 
 256,801 
 
 Net Acquisitions of Property and Equipment 
 
 437,152 
 
 365,512 
 
 Saia LTL Freight Operating Statistics: 
 
 Workdays 
 
 252 
 
 253 
 
 LTL Tonnage 
 
 5,543 
 
 5,473 
 
 1.3 
 
 LTL Shipments 
 
 7,997 
 
 7,697 
 
 3.9 
 
 LTL Revenue per hundredweight 
 
 $25.38 
 
 $24.70 
 
 2.8 
 
 LTL Revenue per hundredweight, excluding fuel surcharges 
 
 $20.99 
 
 $19.63 
 
 6.9 
 
 LTL Revenue per shipment 
 
 $351.90 
 
 $351.27 
 
 0.2 
 
 LTL Revenue per shipment, excluding fuel surcharges 
 
 $291.00 
 
 $279.16 
 
 4.2 
 
 LTL Pounds per shipment 
 
 1,386 
 
 1,422 
 
 (2.5) 
 
 LTL Length of haul 
 
 894 
 
 904 
 
 (1.1) 
 
 Year ended December 31, 2023 as compared to year ended December 31, 2022 

 Revenue and volume 

 Consolidated revenue increased 3.2 percent to $2.9 billion primarily due to increased volume and yield, excluding fuel surcharges. These increases were the result of a redistribution of freight due to industry consolidation mid-year, as well as pricing actions and changes in business mix. 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), excluding fuel surcharges, increased 6.9 percent to $20.99 for 2023. Saia’s LTL tonnage also increased 1.3 percent while LTL shipments increased 3.9 percent for 2023. Overall LTL revenue per shipment, excluding fuel surcharges, increased 4.2 percent in 2023 due to the yield improvements discussed above. For 2023 and 2022, 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 6.5 and 7.5 percent general rate increases on January 30, 2023 and December 4, 2023, respectively. Competitive factors, customer turnover and mix changes, among other things, impact the extent to which customer rate increases are retained over time. 

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 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 typically 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 decreased to 16.9 percent of operating revenue in 2023 compared to 19.9 percent in 2022 primarily as a result of decreases in the cost of diesel fuel. 

 Operating expenses and margin 

 Consolidated operating income declined to $460.5 million in 2023 compared to $470.5 million in 2022. The decrease in 2023 operating income resulted primarily from increases in salaries, wages and benefits and depreciation expense which was partially offset by increased revenue and decreased purchased transportation. The 2023 operating ratio (operating expenses divided by operating revenue) was 84.0 percent as compared to 83.1 percent in 2022. 

 Salaries, wages and employees’ benefits expense increased $131.7 million in 2023 compared to 2022 largely due to increased head count to support increased volumes, ongoing business growth and network expansion. Additionally, in July 2023 the Company implemented a salary and wage increase of approximately 4.1 percent. Purchased transportation expense decreased $77.2 million in 2023 compared to 2022 primarily due to both a decrease in miles utilized and a decrease in cost per mile. Fuel, operating expenses and supplies increased by $5.2 million primarily driven by increased repairs, maintenance and facility costs in addition to investments in information technology network support. These changes were partially offset by decreases in costs of fuel during the period. In addition, claims and insurance expense in 2023 was $11.4 million higher than 2022 largely due to increased premiums, claim development and claim costs in 2023. The Company experiences volatility in accident expense from time to time as a result of utilizing self-insurance as a part of its risk management program. Depreciation and amortization expense increased $21.6 million in 2023 compared to 2022 primarily due to ongoing investments in revenue equipment and network expansion. 

 Other 

 Interest expense in 2023 was $0.1 million less than 2022 due to decreased finance lease obligations in 2023. Interest income in 2023 was $6.0 million greater than 2022 due to increased interest rates on higher average deposit balances during the period. The effective income tax rate was 23.9 percent and 23.6 percent for the years ended December 31, 2023 and 2022, respectively. 

 Outlook 

 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 December 4, 2023 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.” 

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 Effective July 2023, the Company implemented a salary and wage increase of approximately 4.1 percent for all of its employees, other than executives. The total cost of the compensation increase is expected to be approximately $46.1 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 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. 

 Recently Issued Accounting Pronouncements 

 In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures .” Under this ASU, interim and annual segment disclosures are expanded primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. Additionally, the standard requires all entities with a single reportable segment to apply all segment disclosure requirements. This standard is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. 

 In December 2023, the FASB issued ASU No. 2023-09, “ Income Taxes (Topic 326): Improvements to Income Tax Disclosures. ” Under this ASU income tax disclosures are expanded primarily by requiring the disaggregation of the rate reconciliation and income taxes paid disclosures. This standard is effective for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. 

 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. 

 Working Capital and Capital Expenditures 

 Working capital at December 31, 2023 was $326.6 million compared to $256.8 million at December 31, 2022. This increase is primarily due to an increase in cash and cash equivalents and accounts receivable, partially offset by an increase in accounts payable. 

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 A summary of our cash flows is presented below: 

 Years ended 
 
 2023 
 
 2022 
 
 (in thousands) 
 
 Cash and Cash Equivalents, beginning of period 
 
 $187,390 
 
 $106,588 
 
 Net Cash flows provided by (used in): 
 
 Operating activities 
 
 577,945 
 
 473,026 
 
 Investing activities 
 
 (448,696) 
 
 (365,512) 
 
 Financing activities 
 
 (20,424) 
 
 (26,712) 
 
 Net Increase in Cash and Cash Equivalents 
 
 108,825 
 
 80,802 
 
 Cash and Cash Equivalents, end of period 
 
 $296,215 
 
 $187,390 
 
 Cash flows from operating activities were $577.9 million for 2023 versus $473.0 million for 2022 largely driven by changes in net operating assets and liabilities. For 2023, net cash used in investing activities was $448.7 million versus $365.5 million in 2022 primarily due to increased capital expenditures during 2023 as the Company continues to expand its footprint and add density in markets. Net cash used in financing activities was $20.4 million in 2023 versus $26.7 million in 2022 as a result of decreased finance lease payments during 2023. 

 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 and its operating cash flows. Additionally, as of December 31, 2023, the Company has $267.9 million of availability under its 2023 Credit Agreement, $100 million of committed financing and $250 million of uncommitted financing under the Company's Private Shelf Agreement, subject to certain conditions. 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, 2023. 

 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 2024 are expected to be approximately $1 billion compared to 2023 net capital expenditures of $437.2 million. Estimated 2024 capital expenditures include $235.7 million to acquire Yellow Corporation terminals, a normal replacement cycle of revenue equipment and technology investments for our operations, and additional 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 are summarized in the following table (in millions): 

 Years ended 
 
 2023 
 
 2022 
 
 2021 
 
 Land and structures: 
 
 Additions 
 
 $267.3 
 
 $163.5 
 
 $124.8 
 
 Sales 
 
 (0.1) 
 
 — 
 
 (6.0) 
 
 Revenue equipment, net 
 
 133.3 
 
 168.6 
 
 130.0 
 
 Technology and other 
 
 36.7 
 
 33.4 
 
 28.5 
 
 Total 
 
 $437.2 
 
 $365.5 
 
 $277.3 
 
 In addition to the amounts disclosed in the table above, the Company had an additional $50.9 million in capital expenditures for revenue equipment that was received but not paid for prior to December 31, 2023. 

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 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. 

 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 and availability of lender commitments. Borrowings under the 2023 Credit Agreement bear interest at the Company’s election at a variable rate equal to (a) one, three or six month term SOFR (the forward-looking secured overnight financing rate) plus 0.10%, or (b) an alternate base rate, in each case plus an applicable margin. The applicable margin will be between 1.00% and 1.75% per annum for term SOFR loans and between 0.00% and 0.75% per annum for alternate base rate loans, in each case based on the Company’s consolidated net lease adjusted leverage ratio. The Company also accrues fees based on the daily unused portion of the credit facility, which will be between 0.0125% and 0.025% based on the Company’s consolidated net lease adjusted leverage ratio. 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. 

 At December 31, 2023 and 2022, the Company had no outstanding borrowings and outstanding letters of credit of $32.1 million and $31.2 million, respectively, under the credit agreements. 

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

 Private Shelf Agreement 

 On November 9, 2023, the Company entered into a $350 million uncommitted Private Shelf Agreement (the Shelf Agreement), by and among the Company, PGIM, Inc. (Prudential), and certain affiliates and managed accounts of Prudential (the Note Purchasers) which allows the Company, from time to time, to offer for sale to Prudential and its affiliates, in one or a series of transactions, senior notes of the Company, through November 9, 2026. 

 Pursuant to the Shelf Agreement, the Company agreed to sell up to $100 million aggregate principal amount of senior notes (the Initial Notes) to the Note Purchasers. The Initial Notes will bear interest at 6.09% per annum and will mature five years after the date on which the Initial Notes are issued, unless repaid earlier by the Company. The funding date for the Initial Notes may occur at any time on or prior to August 2, 2024. The Initial Notes will be senior unsecured obligations and rank pari passu with borrowings under the 2023 Credit Agreement or other senior promissory notes issued pursuant to the Shelf Agreement. 

 Additional notes issued under the Shelf Agreement, if any, would bear interest at a rate per annum, and would have such other terms, as would be set forth in a confirmation of acceptance executed by the parties prior to the closing of the applicable sale transaction. 

 The Shelf Agreement requires that the Company maintain a consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00, with limited exceptions. The Shelf Agreement also contains certain customary representations and warranties, affirmative and negative covenants and provisions related to events of default. Upon the occurrence and continuance of an event of default, the holders of notes issued under the Shelf Agreement may require immediate payment of all amounts owing under such notes. 

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 At December 31, 2023, the Company had no outstanding borrowings under its Shelf Agreement. 

 See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the Shelf Agreement. 

 Finance Leases 

 The Company is obligated under finance leases with seven-year terms for revenue equipment totaling $16.5 million and $31.0 million as of December 31, 2023 and 2022, 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, 2023 and 2022 were 3.95% and 3.74%, respectively. 

 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 2023 Credit Agreement or Shelf Agreement. Total contractual obligations for operating leases at December 31, 2023 totaled $142.6 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 $17.1 million at December 31, 2023, which include both principal and interest components. Purchase obligations at December 31, 2023 were $314.9 million. As of December 31, 2023 there was no outstanding principal balance under the 2023 Credit Agreement or Shelf Agreement. For further information see the Notes to the accompanying audited Consolidated Financial Statements in this Form 10-K. 

 Other commercial commitments of the Company typically include letters of credit and surety bonds required for collateral under insurance agreements. As of December 31, 2023 the Company had total outstanding letters of credit of $33.9 million and $56.7 million in surety bonds. 

 In addition to any principal amounts disclosed, the Company has interest obligations of approximately $1.4 million for 2024, based on borrowings and commitments outstanding at December 31, 2023. 

 The Company has accrued approximately $4.7 million for uncertain tax positions and accrued interest and penalties of $0.5 million related to the uncertain tax positions as of December 31, 2023. 

 At December 31, 2023, the Company has $103.0 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 

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 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 factors for the year ended December 31, 2023. 

 • 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 ten 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, 2023. 

 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. 

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 Item 7A. 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, 2023. The table presents cash flows for principal payments (in millions) and related weighted average interest rates by contractual maturity dates. The estimated fair value of the fixed rate debt (in millions), which is comprised of finance leases, is based on current market interest rates for similar types of financial instruments, reflective of level two inputs. 

 Expected maturity date 
 
 As of December 31, 2023 
 
 2024 
 
 2025 
 
 2026 
 
 2027 
 
 2028 
 
 Thereafter 
 
 Total 
 
 Fair Value 
 
 Fixed rate debt 
 
 $10.2 
 
 $5.3 
 
 $1.0 
 
 $— 
 
 $— 
 
 $— 
 
 $16.5 
 
 $16.1 
 
 Average interest rate 
 
 3.9% 
 
 4.1% 
 
 3.5% 
 
 — 
 
 — 
 
 — 
 
 43 

 Item 8. Financial Statemen ts and Supplementary Data 

 FINANCIAL STATEMENTS 

 Reports of Independent Registered Public Accounting Firm 
 
 45 
 
 Consolidated Balance Sheets — December 31, 2023 and 2022 
 
 49 
 
 Consolidated Statements of Operations — Years ended December 31, 2023, 2022 and 2021 
 
 50 
 
 Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2023, 2022 and 2021 
 
 51 
 
 Consolidated Statements of Cash Flows — Years ended December 31, 2023, 2022 and 2021 
 
 52 
 
 Notes to Consolidated Financial Statements 
 
 53 
 
 44 

 Report of Independent Regis tered Public Accounting Firm 

 To the Stockholders and Board of Directors
Saia, Inc.: 

 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, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, 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, 2023, 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, 2024 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 $41.6 million, and claims, insurance, and other (non-current) of $61.4 million, as of December 31, 2023.

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 

 45 

 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 liabilities. We evaluated the Company’s accruals for a selection of reported claims by comparing the individual accruals to current available information, which included claim files and attorneys’ letters, and we tested the Company’s historical paid loss data by inspecting a sample of claim payments. 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. 

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

 Atlanta, Georgia 

 February 23, 2024 

 46 

 Report of Independent Registered Public Accounting Firm 

 To the Stockholders and Board of Directors
Saia, Inc.: 

 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, 2023, 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, 2023, 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, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 23, 2024 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. 

 47 

 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. 

 /s/ KPMG LLP 

 Atlanta, Georgia 

 February 23, 2024 

 48 

 Saia, Inc. and Subsidiaries 

 Consolidated B alance Sheets 

 (in thousands, except share and per share data) 

 December 31, 2023 
 
 December 31, 2022 
 
 ASSETS 
 
 Current Assets: 
 
 Cash and cash equivalents 
 
 $ 
 
 296,215 
 
 $ 
 
 187,390 
 
 Accounts receivable, less allowances of $ 4,427 in 2023 and $ 5,804 in 2022 
 
 311,742 
 
 290,306 
 
 Prepaid expenses 
 
 32,648 
 
 22,525 
 
 Income tax receivable 
 
 1,005 
 
 23,438 
 
 Other current assets 
 
 7,084 
 
 7,227 
 
 Total current assets 
 
 648,694 
 
 530,886 
 
 Property and Equipment, at cost 
 
 2,881,800 
 
 2,478,824 
 
 Less-accumulated depreciation and amortization 
 
 1,118,492 
 
 996,204 
 
 Net property and equipment 
 
 1,763,308 
 
 1,482,620 
 
 Operating Lease Right-of-Use Assets 
 
 118,734 
 
 120,455 
 
 Goodwill and Identifiable Intangibles, net 
 
 17,296 
 
 18,149 
 
 Other Noncurrent Assets 
 
 35,533 
 
 22,600 
 
 Total assets 
 
 $ 
 
 2,583,565 
 
 $ 
 
 2,174,710 
 
 LIABILITIES AND STOCKHOLDERS’ EQUITY 
 
 Current Liabilities: 
 
 Accounts payable 
 
 $ 
 
 141,877 
 
 $ 
 
 99,792 
 
 Wages, vacation and employees’ benefits 
 
 75,514 
 
 66,684 
 
 Claims and insurance accruals 
 
 41,641 
 
 45,481 
 
 Other current liabilities 
 
 27,094 
 
 22,684 
 
 Current portion of long-term debt 
 
 10,173 
 
 14,519 
 
 Current portion of operating lease liability 
 
 25,757 
 
 24,925 
 
 Total current liabilities 
 
 322,056 
 
 274,085 
 
 Other Liabilities: 
 
 Long-term debt, less current portion 
 
 6,315 
 
 16,489 
 
 Operating lease liability, less current portion 
 
 96,462 
 
 98,581 
 
 Deferred income taxes 
 
 155,841 
 
 145,771 
 
 Claims, insurance and other 
 
 61,397 
 
 60,443 
 
 Total other liabilities 
 
 320,015 
 
 321,284 
 
 Commitments and Contingencies (Note 3 ) 
 
 Stockholders’ Equity: 
 
 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,
 26,549,372 and 26,464,197 shares issued and outstanding at
 December 31, 2023 and 2022, respectively 
 
 27 
 
 26 
 
 Additional paid-in-capital 
 
 285,092 
 
 277,366 
 
 Deferred compensation trust, 69,672 and 69,982 shares of common 
 stock at cost at December 31, 2023 and 2022, respectively 
 
 ( 5,679 
 
 ) 
 
 ( 5,248 
 
 ) 
 
 Retained earnings 
 
 1,662,054 
 
 1,307,197 
 
 Total stockholders’ equity 
 
 1,941,494 
 
 1,579,341 
 
 Total liabilities and stockholders’ equity 
 
 $ 
 
 2,583,565 
 
 $ 
 
 2,174,710 
 
 See accompanying notes to consolidated financial statements. 

 49 

 Saia, Inc. and Subsidiaries 

 Consolidated Statem ents of Operations 

 For the years ended December 31, 2023, 2022 and 2021 

 (in thousands, except per share data) 

 2023 
 
 2022 
 
 2021 
 
 Operating Revenue 
 
 $ 
 
 2,881,433 
 
 $ 
 
 2,792,057 
 
 $ 
 
 2,288,704 
 
 Operating Expenses: 
 
 Salaries, wages and employees’ benefits 
 
 1,301,280 
 
 1,169,539 
 
 1,063,703 
 
 Purchased transportation 
 
 238,688 
 
 315,896 
 
 249,710 
 
 Fuel, operating expenses and supplies 
 
 563,688 
 
 558,456 
 
 381,904 
 
 Operating taxes and licenses 
 
 69,542 
 
 63,824 
 
 59,095 
 
 Claims and insurance 
 
 67,984 
 
 56,601 
 
 61,345 
 
 Depreciation and amortization 
 
 178,845 
 
 157,203 
 
 141,700 
 
 Operating losses (gains), net 
 
 910 
 
 50 
 
 ( 3,894 
 
 ) 
 
 Total operating expenses 
 
 2,420,937 
 
 2,321,569 
 
 1,953,563 
 
 Operating Income 
 
 460,496 
 
 470,488 
 
 335,141 
 
 Non-operating (Income) Expenses: 
 
 Interest expense 
 
 2,535 
 
 2,611 
 
 3,212 
 
 Interest income 
 
 ( 6,208 
 
 ) 
 
 ( 217 
 
 ) 
 
 ( 11 
 
 ) 
 
 Other, net 
 
 ( 2,058 
 
 ) 
 
 46 
 
 ( 833 
 
 ) 
 
 Non-operating (income) expenses, net 
 
 ( 5,731 
 
 ) 
 
 2,440 
 
 2,368 
 
 Income Before Income Taxes 
 
 466,227 
 
 468,048 
 
 332,773 
 
 Income Tax Expense 
 
 111,370 
 
 110,626 
 
 79,538 
 
 Net Income 
 
 $ 
 
 354,857 
 
 $ 
 
 357,422 
 
 $ 
 
 253,235 
 
 Weighted average common shares outstanding – basic 
 
 26,632 
 
 26,520 
 
 26,322 
 
 Weighted average common shares outstanding – diluted 
 
 26,763 
 
 26,674 
 
 26,707 
 
 Basic Earnings Per Share 
 
 $ 
 
 13.32 
 
 $ 
 
 13.48 
 
 $ 
 
 9.62 
 
 Diluted Earnings Per Share 
 
 $ 
 
 13.26 
 
 $ 
 
 13.40 
 
 $ 
 
 9.48 
 
 See accompanying notes to consolidated financial statements. 

 50 

 Saia, Inc. and Subsidiaries 

 Consolidated Statements of Stockholders’ Equity 

 For the years ended December 31, 2023, 2022 and 2021 

 (in thousands) 

 Common Shares 
 
 Common Stock 
 
 Additional Paid-in Capital 
 
 Deferred Compensation Trust 
 
 Retained Earnings 
 
 Total 
 
 Balance at December 31, 2020 
 
 26,236 
 
 $ 26 
 
 $ 267,666 
 
 $( 2,944 ) 
 
 $ 696,540 
 
 $ 961,288 
 
 Stock compensation, including options and long-term incentives 
 
 — 
 
 — 
 
 7,245 
 
 — 
 
 — 
 
 7,245 
 
 Director deferred share activity 
 
 2 
 
 — 
 
 1,458 
 
 — 
 
 — 
 
 1,458 
 
 Exercise of stock options less shares withheld for taxes 
 
 47 
 
 — 
 
 3,678 
 
 — 
 
 — 
 
 3,678 
 
 Shares issued for long-term incentive awards, net of shares withheld for taxes 
 
 52 
 
 — 
 
 ( 6,571 ) 
 
 — 
 
 — 
 
 ( 6,571 ) 
 
 Purchase of shares by Deferred Compensation Trust 
 
 — 
 
 — 
 
 1,268 
 
 ( 1,268 ) 
 
 — 
 
 — 
 
 Sale of shares by Deferred Compensation Trust 
 
 — 
 
 — 
 
 ( 111 ) 
 
 111 
 
 — 
 
 — 
 
 Net income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 253,235 
 
 253,235 
 
 Balance at December 31, 2021 
 
 26,337 
 
 26 
 
 274,633 
 
 ( 4,101 ) 
 
 949,775 
 
 1,220,333 
 
 Stock compensation, including options and long-term incentives 
 
 — 
 
 — 
 
 7,657 
 
 — 
 
 — 
 
 7,657 
 
 Director deferred share activity 
 
 2 
 
 — 
 
 1,170 
 
 — 
 
 — 
 
 1,170 
 
 Exercise of stock options less shares withheld for taxes 
 
 62 
 
 — 
 
 4,511 
 
 — 
 
 — 
 
 4,511 
 
 Shares issued for long-term incentive awards, net of shares withheld for taxes 
 
 63 
 
 — 
 
 ( 11,752 ) 
 
 — 
 
 — 
 
 ( 11,752 ) 
 
 Purchase of shares by Deferred Compensation Trust 
 
 — 
 
 — 
 
 3,254 
 
 ( 3,254 ) 
 
 — 
 
 — 
 
 Sale of shares by Deferred Compensation Trust 
 
 — 
 
 — 
 
 ( 2,107 ) 
 
 2,107 
 
 — 
 
 — 
 
 Net income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 357,422 
 
 357,422 
 
 Balance at December 31, 2022 
 
 26,464 
 
 26 
 
 277,366 
 
 ( 5,248 ) 
 
 1,307,197 
 
 1,579,341 
 
 Stock compensation, including options and long-term incentives 
 
 — 
 
 — 
 
 10,219 
 
 — 
 
 — 
 
 10,219 
 
 Director deferred share activity 
 
 2 
 
 — 
 
 1,417 
 
 — 
 
 — 
 
 1,417 
 
 Exercise of stock options less shares withheld for taxes 
 
 35 
 
 — 
 
 4,875 
 
 — 
 
 — 
 
 4,875 
 
 Shares issued for long-term incentive awards, net of shares withheld for taxes 
 
 48 
 
 1 
 
 ( 9,216 ) 
 
 — 
 
 — 
 
 ( 9,215 ) 
 
 Purchase of shares by Deferred Compensation Trust 
 
 — 
 
 — 
 
 620 
 
 ( 620 ) 
 
 — 
 
 — 
 
 Sale of shares by Deferred Compensation Trust 
 
 — 
 
 — 
 
 ( 189 ) 
 
 189 
 
 — 
 
 — 
 
 Net income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 354,857 
 
 354,857 
 
 Balance at December 31, 2023 
 
 26,549 
 
 $ 27 
 
 $ 285,092 
 
 $( 5,679 ) 
 
 $ 1,662,054 
 
 $ 1,941,494 
 
 See accompanying notes to consolidated financial statements. 

 51 

 Saia, Inc. and Subsidiaries 

 Consolidated Statem ents of Cash Flows 

 For the years ended December 31, 2023, 2022 and 2021 

 (in thousands) 

 2023 
 
 2022 
 
 2021 
 
 Operating Activities: 
 
 Net income 
 
 $ 354,857 
 
 $ 357,422 
 
 $ 253,235 
 
 Noncash items included in net income: 
 
 Depreciation and amortization 
 
 178,845 
 
 157,203 
 
 141,700 
 
 Allowance for credit losses 
 
 1,955 
 
 3,074 
 
 3,559 
 
 Deferred income taxes 
 
 10,070 
 
 21,634 
 
 4,319 
 
 Loss (gain) from property disposals, net 
 
 910 
 
 50 
 
 ( 3,894 ) 
 
 Stock-based compensation 
 
 11,636 
 
 8,827 
 
 8,703 
 
 Changes in operating assets and liabilities: 
 
 Accounts receivable 
 
 ( 23,391 ) 
 
 ( 16,624 ) 
 
 ( 63,415 ) 
 
 Accounts payable 
 
 10,752 
 
 ( 9,523 ) 
 
 16,729 
 
 Change in other assets and liabilities, net 
 
 32,311 
 
 ( 49,037 ) 
 
 21,656 
 
 Net cash provided by operating activities 
 
 577,945 
 
 473,026 
 
 382,592 
 
 Investing Activities: 
 
 Acquisition of property and equipment 
 
 ( 439,879 ) 
 
 ( 367,429 ) 
 
 ( 285,746 ) 
 
 Proceeds from disposal of property and equipment 
 
 2,727 
 
 1,917 
 
 8,398 
 
 Other 
 
 ( 11,544 ) 
 
 — 
 
 ( 500 ) 
 
 Net cash used in investing activities 
 
 ( 448,696 ) 
 
 ( 365,512 ) 
 
 ( 277,848 ) 
 
 Financing Activities: 
 
 Repayment of credit and private shelf agreements 
 
 — 
 
 ( 1,000 ) 
 
 ( 43,175 ) 
 
 Borrowing of credit and private shelf agreements 
 
 — 
 
 1,000 
 
 43,175 
 
 Proceeds from stock option exercises 
 
 4,875 
 
 4,511 
 
 3,678 
 
 Shares withheld for taxes 
 
 ( 9,216 ) 
 
 ( 11,752 ) 
 
 ( 6,571 ) 
 
 Repayment of finance leases 
 
 ( 14,520 ) 
 
 ( 19,471 ) 
 
 ( 20,571 ) 
 
 Other financing activity 
 
 ( 1,563 ) 
 
 — 
 
 — 
 
 Net cash used in financing activities 
 
 ( 20,424 ) 
 
 ( 26,712 ) 
 
 ( 23,464 ) 
 
 Net Increase in Cash and Cash Equivalents 
 
 108,825 
 
 80,802 
 
 81,280 
 
 Cash and cash equivalents, beginning of year 
 
 187,390 
 
 106,588 
 
 25,308 
 
 Cash and cash equivalents, end of year 
 
 $ 296,215 
 
 $ 187,390 
 
 $ 106,588 
 
 See accompanying notes to consolidated financial statements. 

 52 

 Saia, Inc. and Subsidiaries 

 Notes to Consolidated Financial Statements 

 December 31, 2023, 2022 and 2021 

 1. 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 97 % 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 regularly reviews the operating results of the Company's single 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. 
 
 Recently Issued Accounting Pronouncements 
 In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ” Under this ASU, interim and annual segment disclosures are expanded primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. Additionally, the standard requires all entities with a single reportable segment to apply all segment disclosure requirements. This standard is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. 
 In December 2023, the FASB issued ASU No. 2023-09, “ Income Taxes (Topic 326): Improvements to Income Tax Disclosures. ” Under this ASU income tax disclosures are expanded primarily by requiring the disaggregation of the rate reconciliation and income taxes paid disclosures. This standard is effective for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. 
 
 Summary of Accounting Policies 
 Significant accounting policies and practices used in the preparation of the accompanying consolidated financial statements are as follows: 
 53 

 Cash and Cash Equivalents: 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: 
 
 Years 
 
 Structures 
 
 20 to 25 
 
 Revenue equipment 
 
 6 to 14 
 
 Technology equipment and software 
 
 3 to 5 
 
 Other 
 
 3 to 10 
 
 At December 31, property and equipment consisted of the following (in thousands): 
 
 2023 
 
 2022 
 
 Land 
 
 $ 
 
 272,633 
 
 $ 
 
 191,057 
 
 Structures 
 
 813,146 
 
 638,180 
 
 Revenue equipment 
 
 1,470,913 
 
 1,340,761 
 
 Technology equipment and software 
 
 176,854 
 
 187,333 
 
 Other 
 
 148,254 
 
 121,493 
 
 Total property and equipment, at cost 
 
 $ 
 
 2,881,800 
 
 $ 
 
 2,478,824 
 
 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 $ 177.9 million, $ 156.2 million and $ 140.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023, trailers acquired under finance leases had a gross carrying value of $ 137.4 million and accumulated amortization of $ 67.7 million. 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. 
 
 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. 
 
 54 

 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; and 

 • 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. 
 
 Credit Risk: 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 performance 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 quantitative assessment. 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. 
 
 55 

 Advertising: The costs of advertising are expensed as incurred. Advertising costs charged to expense were $ 2.9 million, $ 7.2 million, and $ 5.7 million in 2023, 2022 and 2021 , 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, 2023 and 2022 , because of the relatively short maturity of these instruments. See Note 2 for fair value disclosures related to debt. 
 
 2. Debt and Financing Arrangements 
 At December 31, debt consisted of the following (in thousands): 
 
 December 31, 2023 
 
 December 31, 2022 
 
 Credit and Private Shelf Agreements, described below 
 
 $ 
 
 — 
 
 $ 
 
 — 
 
 Finance Leases, described below 
 
 16,488 
 
 31,008 
 
 Total debt 
 
 16,488 
 
 31,008 
 
 Less: current portion of long-term debt 
 
 10,173 
 
 14,519 
 
 Long-term debt, less current portion 
 
 $ 
 
 6,315 
 
 $ 
 
 16,489 
 
 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. 
 The Company is party to a credit agreement with a group of banks as well as a private shelf debt agreement to fund capital investments, letters of credit and working capital needs. 
 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. 
 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 and availability of lender commitments. Borrowings under the 2023 Credit Agreement bear interest at the Company’s election at a variable rate equal to (a) one, three or six month term SOFR (the forward-looking secured overnight financing rate) plus 0.10 %, or (b) an alternate base rate, in each case plus an applicable margin. The applicable margin will be between 1.00 % and 1.75 % per annum for term SOFR loans and between 0.00 % and 0.75 % per annum for alternate base rate loans, in each case based on the Company’s consolidated net lease adjusted leverage ratio. The Company also accrues fees based on the daily unused portion of the credit facility, which will be between 0.0125 % and 0.025 % based on the Company’s consolidated net lease adjusted leverage ratio. 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. 
 At December 31, 2023 and 2022, the Company had no outstanding borrowings and outstanding letters of credit of $ 32.1 million and $ 31.2 million, respectively, under the credit agreements. 
 56 

 Private Shelf Agreement 
 On November 9, 2023, the Company entered into a $ 350 million uncommitted Private Shelf Agreement (the Shelf Agreement), by and among the Company, PGIM, Inc. (Prudential), and certain affiliates and managed accounts of Prudential (the Note Purchasers) which allows the Company, from time to time, to offer for sale to Prudential and its affiliates, in one or a series of transactions, senior notes of the Company, through November 9, 2026. 
 Pursuant to the Shelf Agreement, the Company agreed to sell up to $ 100 million aggregate principal amount of senior notes (the Initial Notes) to the Note Purchasers. The Initial Notes will bear interest at 6.09 % per annum and will mature five years after the date on which the Initial Notes are issued, unless repaid earlier by the Company. The funding date for the Initial Notes may occur at any time on or prior to August 2, 2024. The Initial Notes will be senior unsecured obligations and rank pari passu with borrowings under the 2023 Credit Agreement or other senior promissory notes issued pursuant to the Shelf Agreement. 
 Additional notes issued under the Shelf Agreement, if any, would bear interest at a rate per annum, and would have such other terms, as would be set forth in a confirmation of acceptance executed by the parties prior to the closing of the applicable sale transaction. 
 The Shelf Agreement requires that the Company maintain a consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00, with limited exceptions. The Shelf Agreement also contains certain customary representations and warranties, affirmative and negative covenants and provisions related to events of default. Upon the occurrence and continuance of an event of default, the holders of notes issued under the Shelf Agreement may require immediate payment of all amounts owing under such notes. 
 At December 31, 2023 , the Company had no outstanding borrowings under the Shelf Agreement. 
 Finance Leases 
 The Company is obligated under finance leases with seven-year terms which include obligations collateralized by revenue equipment totaling $ 16.5 million and $ 31.0 million as of December 31, 2023 and 2022, 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, 2023 and 2022 is $ 16.1 million and $ 31.2 million, respectively, which is based on current market interest rates for similar types of financial instruments, reflective of Level 2 inputs. 
 Other 
 The Company paid cash for interest of $ 1.6 million, $ 2.3 million, and $ 3.0 million for the years ended December 31, 2023, 2022 and 2021 , respectively. 
 
 3. Commitments, Contingencies and Uncertainties 
 The Company has contractual obligations and commitments in the form of finance leases, operating leases and purchase commitments. 
 57 

 At December 31, 2023, the Company was committed under non-cancellable operating lease agreements requiring minimum annual rentals payable as follows (in thousands): 
 
 Amount 
 
 2024 
 
 $ 
 
 31,218 
 
 2025 
 
 28,830 
 
 2026 
 
 21,977 
 
 2027 
 
 19,180 
 
 2028 
 
 16,273 
 
 Thereafter 
 
 25,100 
 
 Total 
 
 $ 
 
 142,578 
 
 Rent expense was $ 37.2 million, $ 33.4 million, and $ 31.6 million for the years ended December 31, 2023, 2022 and 2021, 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 $ 306.6 million at December 31, 2023 . These commitments include a commitment to purchase 17 terminals from Yellow Corporation for $ 235.7 million. In addition to this, the Company was committed to a purchase price of $ 7.9 million related to the acquisition of 11 terminal leases. See Note 12 for additional information on these transactions. As of December 31, 2023 and 2022, the Company had $ 50.9 million and $ 19.5 million, respectively, of capital expenditures accrued for in accounts payable. 
 Other 
 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. 
 
 4. Leases 
 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, 2023 and 2022, approximately $ 38.6 million and $ 60.5 million , respectively, of finance leased assets, net of amortization, were included in property and equipment . Accumulated amortization for these assets totaled $ 31.2 million and $ 43.8 million as of the same periods ended. 
 A summary of the lease costs for the years ended December 31, 2023 and 2022 follows (in thousands): 
 
 58 

 2023 
 
 2022 
 
 Finance lease cost: 
 
 Amortization of right-of-use assets 
 
 $ 
 
 5,693 
 
 $ 
 
 8,276 
 
 Interest on lease liabilities 
 
 883 
 
 1,476 
 
 Operating lease cost (includes variable and sublease costs as they are immaterial) 
 
 34,522 
 
 30,919 
 
 Short-term lease cost 
 
 16,303 
 
 19,387 
 
 Total lease cost 
 
 $ 
 
 57,401 
 
 $ 
 
 60,058 
 
 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 
 
 27,026 
 
 39,122 
 
 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): 
 
 2023 
 
 2022 
 
 Cash paid for amounts included in the measurement of lease liabilities 
 
 Operating cash outflows from finance leases 
 
 $ 
 
 890 
 
 $ 
 
 1,484 
 
 Operating cash outflows from operating leases 
 
 35,339 
 
 31,043 
 
 Financing cash outflows from finance leases 
 
 14,520 
 
 19,471 
 
 Weighted-average remaining lease term - finance leases (years) 
 
 1.2 
 
 1.8 
 
 Weighted-average remaining lease term - operating leases (years) 
 
 5.4 
 
 5.2 
 
 Weighted-average discount rate - finance leases 
 
 4.0 
 
 % 
 
 3.7 
 
 % 
 
 Weighted-average discount rate - operating leases 
 
 5.4 
 
 % 
 
 5.1 
 
 % 
 
 As of December 31, 2023, maturities of lease liabilities were as follows (in thousands): 
 
 Operating Leases 
 
 Finance Leases 
 
 Maturity of Lease Liabilities 
 
 2024 
 
 $ 
 
 31,218 
 
 $ 
 
 10,605 
 
 2025 
 
 28,830 
 
 5,453 
 
 2026 
 
 21,977 
 
 995 
 
 2027 
 
 19,180 
 
 - 
 
 2028 
 
 16,273 
 
 - 
 
 Thereafter 
 
 25,100 
 
 - 
 
 Total lease payments 
 
 142,578 
 
 17,053 
 
 Less: Interest 
 
 20,359 
 
 565 
 
 Present value of lease liabilities 
 
 $ 
 
 122,219 
 
 $ 
 
 16,488 
 
 59 

 5. 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, 2023, 2022 and 2021, respectively. 
 The gross amounts and accumulated amortization of identifiable intangible assets are as follows (in thousands): 
 
 December 31, 2023 
 
 December 31, 2022 
 
 Gross Amount 
 
 Accumulated Amortization 
 
 Gross Amount 
 
 Accumulated Amortization 
 
 Amortizable intangible assets: 
 
 Customer relationships (useful life of 6 - 15 years) 
 
 $ 
 
 19,000 
 
 $ 
 
 14,417 
 
 $ 
 
 19,000 
 
 $ 
 
 13,664 
 
 Trademarks (useful life of 15 years) 
 
 1,500 
 
 892 
 
 1,500 
 
 792 
 
 Total 
 
 $ 
 
 20,500 
 
 $ 
 
 15,309 
 
 $ 
 
 20,500 
 
 $ 
 
 14,456 
 
 Amortization expense for intangible assets was $ 0.9 million for 2023 , $ 1.0 million in 2022 and $ 1.2 million in 2021 . Estimated amortization expense for the next five years is as follows (in thousands): 
 
 Amount 
 
 2024 
 
 $ 
 
 853 
 
 2025 
 
 853 
 
 2026 
 
 853 
 
 2027 
 
 853 
 
 2028 
 
 853 
 
 6. 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, 
 
 2023 
 
 2022 
 
 2021 
 
 Numerator: 
 
 Net income 
 
 $ 
 
 354,857 
 
 $ 
 
 357,422 
 
 $ 
 
 253,235 
 
 Denominator: 
 
 Denominator for basic earnings per share–weighted
 average common shares 
 
 26,632 
 
 26,520 
 
 26,322 
 
 Dilutive effect of share-based awards 
 
 131 
 
 154 
 
 385 
 
 Denominator for diluted earnings per share–adjusted
 weighted average common shares 
 
 26,763 
 
 26,674 
 
 26,707 
 
 Basic Earnings Per Share 
 
 $ 
 
 13.32 
 
 $ 
 
 13.48 
 
 $ 
 
 9.62 
 
 Diluted Earnings Per Share 
 
 $ 
 
 13.26 
 
 $ 
 
 13.40 
 
 $ 
 
 9.48 
 
 In 2023, there were 5,790 anti-dilutive options or restricted stock. In 2022, there were 22,237 anti-dilutive options or restricted stock. In 2021 , there were 19,386 anti-dilutive options or restricted stock. 
 
 7. Stockholders’ Equity 
 Deferred Compensation Plan 
 The Saia Executive Capital Accumulation Plan (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, 2023 and 2022, the Company’s rabbi trust, which holds the investments for the Capital 
 60 

 Accumulation Plan, held 69,672 and 69,982 shares of the Company’s common stock, respectively, all of which were purchased on the open market. 
 The following table summarizes the shares of the Company’s common stock that were purchased and sold by the Company’s rabbi trust: 
 
 For The Years Ended December 31, 
 
 2023 
 
 2022 
 
 2021 
 
 Shares of common stock purchased 
 
 2,110 
 
 12,117 
 
 5,580 
 
 Aggregate purchase price of shares purchased 
 
 $ 
 
 620,282 
 
 $ 
 
 3,253,577 
 
 $ 
 
 1,268,370 
 
 Shares of common stock sold 
 
 2,420 
 
 36,762 
 
 2,841 
 
 Aggregate sale price of shares sold 
 
 $ 
 
 834,704 
 
 $ 
 
 10,370,165 
 
 $ 
 
 802,030 
 
 Company common stock held by the rabbi trust is accounted for within stockholders' equity similar to treasury stock at historical cost with the corresponding deferred compensation obligation also presented within stockholders' equity as additional paid-in capital. 
 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 100,110 and 97,381 shares reserved for issuance under the Directors’ Deferred Fee Plan at December 31, 2023 and 2022 , respectively. The shares reserved for issuance under the Directors’ Deferred Fee Plan are treated as common stock in computing basic earnings per share. 
 
 8. 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, 2023 and 2022, 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, 2023 and 2022, 677,500 and 765,617 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 tota l 10,000 shares as of December 31, 2023. 
 The Company grants shares of restricted stock as part of its long-term incentive plan. These shares of restricted stock vest over 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 
 61 

 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 $ 5.7 million, $ 3.9 million and $ 3.3 million, was recorded for the years ended December 31, 2023, 2022 and 2021, respectively, and is included in salaries, wages and employees’ benefits. As of December 31, 2023, there is unrecognized compensation expense of $ 6.2 million related to unvested stock options and restricted stock, which is expected to be recognized over a weighted average period of 1.6 years. 
 The following table summarizes stock option activity for the year ended December 31, 2023 for employees: 
 
 Options 
 
 Weighted Average Exercise price 
 
 Weighted Average Remaining Contractual Life
(years) 
 
 Aggregate Intrinsic Value
(in thousands) 
 
 Outstanding at December 31, 2022 
 
 72,323 
 
 $ 
 
 155.83 
 
 4.6 
 
 $ 
 
 4,921 
 
 Exercised 
 
 ( 34,881 
 
 ) 
 
 139.76 
 
 Outstanding at December 31, 2023 
 
 37,442 
 
 $ 
 
 170.79 
 
 3.8 
 
 $ 
 
 10,013 
 
 Exercisable at December 31, 2023 
 
 21,850 
 
 $ 
 
 113.98 
 
 3.0 
 
 $ 
 
 7,085 
 
 The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 was $ 7.0 million, $ 10.8 million, and $ 5.9 million, respectively. The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2022 and 2021 was $ 94.36 , and $ 62.65 , respectively. There were no options granted during the year ended December 31, 2023. 
 The following table summarizes the weighted average assumptions used in valuing options for the years ended December 31, 2022 and 2021: 
 
 2022 
 
 2021 
 
 Risk-free interest rate 
 
 1.92 % 
 
 1.19 % 
 
 Expected life in years 
 
 3.5 
 
 3.5 
 
 Expected volatility 
 
 43.32 % 
 
 40.57 % 
 
 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, 2023: 
 
 Shares 
 
 Weighted Average Grant-date Fair Value 
 
 Restricted Stock at December 31, 2022 
 
 48,240 
 
 $ 177.89 
 
 Granted 
 
 20,056 
 
 329.32 
 
 Vested 
 
 ( 16,340 ) 
 
 101.30 
 
 Forfeited 
 
 — 
 
 — 
 
 Restricted Stock at December 31, 2023 
 
 51,956 
 
 $ 260.43 
 
 The total fair value of restricted stock that vested during the years ended December 31, 2023, 2022, and 2021 were $ 1.7 million, $ 2.1 million and $ 1.4 million, respectively. 
 62 

 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 $ 4.5 million in 2023, $ 3.8 million in 2022 and $ 4.0 million in 2021. 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 25,716 shares for the January 2021 - December 2023 performance period in February 2024, 63,188 shares for the January 2020 - December 2022 performance period in February 2023, and 78,710 shares for the January 2019 - December 2021 performance period in February 2022. At December 31, 2023, performance unit awards are outstanding for a maximum of 25,020 shares for the January 2022 – December 2024 performance period and for a maximum of 28,532 shares for the January 2023 – December 2025 performance period. As of December 31, 2023, there is unrecognized compensation expense of $ 5.9 million related to unvested performance unit awards, which is expected to be recognized over a weighted average period of 1.8 years. 
 
 The following table summarizes performance unit awards during the year ended December 31, 2023: 
 
 Shares 
 
 Weighted Average Grant-date Fair Value 
 
 Performance Unit Awards at December 31, 2022 
 
 57,431 
 
 $ 207.32 
 
 Granted 
 
 14,266 
 
 429.55 
 
 Added by performance factor 
 
 31,594 
 
 132.81 
 
 Vested 
 
 ( 63,188 ) 
 
 132.81 
 
 Forfeited 
 
 — 
 
 — 
 
 Performance Unit Awards at December 31, 2023 
 
 40,103 
 
 $ 345.08 
 
 The total fair value of performance unit awards shares that vested during the years ended December 31, 2023, 2022, and 2021 were $ 4.2 million, $ 3.6 million and $ 3.0 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 2023, 2022 and 2021 each non-employee director was granted 379 , 396 and 548 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 2,729 ; 3,272 ; and 3,929 units equivalent to shares in the Company's common stock under the Directors' Deferred Fee Plan during the years ended December 31, 2023, 2022 and 2021 , respectively. 
 
 9. 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 of employee contributions up to certain maximum limits. 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 
 63 

 the 401(k) savings plans included in salaries, wages and employees' benefits for the years ended December 31, 2023, 2022 and 2021, were $ 15.2 million, $ 14.0 million, and $ 12.4 million, respectively. 
 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 $ 38.8 million, $ 32.6 million, and $ 36.4 million in 2023, 2022 and 2021, 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 1,420 , 2,158 and 2,516 shares in the open market during 2023, 2022 and 2021 , respectively. 
 
 10. Income Taxes 
 The income tax provision consists of the following (in thousands): 
 
 2023 
 
 2022 
 
 2021 
 
 Current: 
 
 U.S. federal 
 
 $ 
 
 82,802 
 
 $ 
 
 68,934 
 
 $ 
 
 62,222 
 
 State 
 
 18,498 
 
 20,058 
 
 12,997 
 
 Total current income tax provision 
 
 101,300 
 
 88,992 
 
 75,219 
 
 Deferred: 
 
 U.S. federal 
 
 10,345 
 
 21,440 
 
 3,915 
 
 State 
 
 ( 275 
 
 ) 
 
 194 
 
 404 
 
 Total deferred income tax provision 
 
 10,070 
 
 21,634 
 
 4,319 
 
 Total income tax provision 
 
 $ 
 
 111,370 
 
 $ 
 
 110,626 
 
 $ 
 
 79,538 
 
 A reconciliation between income taxes at the federal statutory rate (21 percent) and the actual income tax provision is as follows (in thousands): 
 
 2023 
 
 2022 
 
 2021 
 
 Provision at federal statutory rate 
 
 $ 
 
 97,908 
 
 $ 
 
 98,290 
 
 $ 
 
 69,856 
 
 State income taxes, net of federal benefit 
 
 15,580 
 
 16,274 
 
 11,435 
 
 Tax credits 
 
 ( 1,181 
 
 ) 
 
 ( 1,355 
 
 ) 
 
 ( 1,754 
 
 ) 
 
 Excess tax benefit on stock compensation 
 
 ( 1,004 
 
 ) 
 
 ( 1,578 
 
 ) 
 
 ( 793 
 
 ) 
 
 Other, net 
 
 67 
 
 ( 1,005 
 
 ) 
 
 794 
 
 Total provision 
 
 $ 
 
 111,370 
 
 $ 
 
 110,626 
 
 $ 
 
 79,538 
 
 64 

 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): 
 
 2023 
 
 2022 
 
 Depreciation 
 
 $ 
 
 ( 196,494 
 
 ) 
 
 $ 
 
 ( 183,276 
 
 ) 
 
 Leases 
 
 ( 29,361 
 
 ) 
 
 ( 30,886 
 
 ) 
 
 Other 
 
 ( 6,022 
 
 ) 
 
 ( 5,471 
 
 ) 
 
 Gross deferred tax liabilities 
 
 ( 231,877 
 
 ) 
 
 ( 219,633 
 
 ) 
 
 Allowance for credit losses 
 
 1,097 
 
 1,435 
 
 Equity-based compensation 
 
 4,834 
 
 4,089 
 
 Employee benefits 
 
 12,014 
 
 9,988 
 
 Leases 
 
 30,227 
 
 30,578 
 
 Claims and insurance 
 
 21,597 
 
 22,137 
 
 Other 
 
 6,982 
 
 6,377 
 
 Gross deferred tax assets 
 
 76,751 
 
 74,604 
 
 Valuation Allowance 
 
 ( 715 
 
 ) 
 
 ( 742 
 
 ) 
 
 Net deferred tax assets 
 
 76,036 
 
 73,862 
 
 Net deferred tax liability 
 
 $ 
 
 ( 155,841 
 
 ) 
 
 $ 
 
 ( 145,771 
 
 ) 
 
 The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. For the U.S. federal jurisdiction, tax years 2020 - 2023 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 2014 - 2023 remain open to examination by the various state and local jurisdictions. 
 A reconciliation of the beginning and ending total amounts of gross unrecognized tax benefits is as follows (in thousands): 
 
 2023 
 
 2022 
 
 Gross unrecognized tax benefits at beginning of year 
 
 $ 
 
 3,867 
 
 $ 
 
 1,370 
 
 Gross increases in tax positions for prior years 
 
 2 
 
 1,779 
 
 Gross increases in tax positions for current year 
 
 1,077 
 
 1,005 
 
 Settlements 
 
 — 
 
 — 
 
 Lapse of statute of limitations 
 
 ( 254 
 
 ) 
 
 ( 287 
 
 ) 
 
 Gross unrecognized tax benefits at end of year 
 
 $ 
 
 4,692 
 
 $ 
 
 3,867 
 
 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 $ 4.7 million and $ 3.9 million as of December 31, 2023 and 2022, respectively. The Company paid cash for income taxes of $ 72.8 million, $ 115.3 million, and $ 81.6 million in 2023, 2022 and 2021, respectively. 
 65 

 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. 
 
 11. Valuation and Qualifying Accounts 
 The following is a rollforward of the allowance for credit losses for receivables (in thousands): 
 
 Additions 
 
 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, 2023 
 
 5,804 
 
 1,955 
 
 $ 
 
 — 
 
 $ 
 
 ( 3,332 
 
 ) 
 
 $ 
 
 4,427 
 
 For the period ended December 31, 2022 
 
 5,530 
 
 3,074 
 
 — 
 
 ( 2,800 
 
 ) 
 
 5,804 
 
 For the period ended December 31, 2021 
 
 5,666 
 
 3,559 
 
 — 
 
 ( 3,695 
 
 ) 
 
 5,530 
 
 (1) Primarily uncollectible accounts written off — net of recoveries. 

 12. Subsequent Events 

 On January 17, 2024 , the Company completed the purchase of 17 freight terminals of Yellow Corporation for an aggregate purchase price of $ 235.7 million in cash. 
 In addition, on January 17, 2024 , the Company completed the acquisition of Yellow Corporation’s interests in leases for 11 freight terminals for an aggregate purchase price of $ 7.9 million in cash, plus the assumption of certain liabilities under the leases and the payment of cure costs. 
 
 66 

 Item 9. Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure 

 None.
SAIA INC 10-K

Item 7. Management’s Discussion and Analysis
