What changed in this filing

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Item 1. Financial Statements

2022-05-02 compared with 2021-10-28 · 53 added, 97 removed, 187 unchanged (45% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30, 2021

March 31, 2022

December 31, 2021

3 unchanged sentences

Accounts receivable, net

Income tax receivable

Prepaid expenses and other

26 unchanged sentences

26,408,402 and 26,336,589 shares issued and outstanding at

September 30, 2021 and December 31, 2020, respectively

March 31, 2022 and December 31, 2021, respectively

Additional paid-in-capital

Deferred compensation trust, 80,174 and 94,627 shares of common

stock at cost at September 30, 2021 and December 31, 2020, respectively

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

Retained earnings

4 unchanged sentences

Condensed Consolidated Statements of Operations

For the quarters and nine months ended September 30, 2021 and 2020

Third Quarter

For the quarters ended March 31, 2022 and 2021

First Quarter

(in thousands, except per share data)

7 unchanged sentences

Depreciation and amortization

Gain from property disposals, net

Loss (gain) from property disposals, net

Total operating expenses

12 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

For the quarters and nine months ended September 30, 2021 and 2020

For the quarters ended March 31, 2022 and 2021

Common Shares

10 unchanged sentences

Balance at March 31, 2022

Stock compensation, including options and long-term incentives

Director deferred share activity

Exercise of stock options less shares withheld for taxes

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

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at June 30, 2021

Stock compensation, including options and long-term incentives

Director deferred share activity

Exercise of stock options less shares withheld for taxes

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

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at September 30, 2021

See accompanying notes to condensed consolidated financial statements.

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

For the quarters and nine months ended September 30, 2021 and 2020

Common Shares

10 unchanged sentences

Balance at March 31, 2021

Stock compensation, including options and long-term incentives

Director deferred share activity

Exercise of stock options less shares withheld for taxes

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

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at June 30, 2020

Stock compensation, including options and long-term incentives

Exercise of stock options less shares withheld for taxes

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

Purchase of shares by Deferred Compensation Trust

Sale of shares by Deferred Compensation Trust

BALANCE at September 30, 2020

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2021 and 2020

For the three months ended March 31, 2022 and 2021

First Quarter

(in thousands)

16 unchanged sentences

Net cash used in financing activities

Net Increase in Cash, Cash Equivalents and Restricted Cash (1)

Cash, Cash Equivalents and Restricted Cash, beginning of period (1)

Cash, Cash Equivalents and Restricted Cash, end of period (1)

(1) Cash, cash equivalents and restricted cash at the end of the period includes $ 3.7 million of restricted cash included in accounts receivable, net on the Condensed Consolidated Balance Sheet ending September 30, 2021.

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, beginning of period

Cash and Cash Equivalents, end of period

See accompanying notes to condensed consolidated financial statements.

13 unchanged sentences

The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Operating results for the quarter and nine months ended September 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ended December 31, 2021.

Operating results for the quarter ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ended December 31, 2022.

The Company provides national less-than-truckload (LTL) services through a single integrated organization.

9 unchanged sentences

The Company recognizes revenue related to the Company’s LTL, non-asset truckload and expedited services over the transit time of the shipment as it moves from origin to destination.

Revenue for services started but not completed at the reporting date is recognized based on transit status at the end of each reporting period.

Revenue for services is recognized based on 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:

3 unchanged sentences

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

Remaining performance obligations represent the transaction price allocated to future reporting periods for freight services started but not completed at the reporting date.

This includes the unearned portion of billed and unbilled amounts for freight shipments in transit that the Company expects to recognize as revenue in the period subsequent to the reporting date, which is generally less than one week.

The Company has elected to apply the optional exemption in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606 as it pertains to additional quantitative disclosures pertaining to remaining performance obligations .

Remaining performance obligations represent the transac tion price allocated to future periods for freight services started but not compl eted at the reporting date.

These amounts include the unearned portion of billed and unbilled amounts for freight shipments in transit that the Company expects to recognize as revenue in the period subsequent to the reporting date, which is generally less than one week.

The Company has elected to apply the optional exemption in accordance with the Financial Accounting Standards Board ( “ FASB ” ) Accounting Standards Codification ( “ ASC ” ) Topic 606 , Revenue from Contracts with Customers, as it relates to additional quantitative disclosures pertaining to remaining performance obligations .

Claims and Insurance Accruals

2 unchanged sentences

Thereafter, the policy provides insurance coverage for a single loss of $ 8.0 million, an aggregate loss limit of $ 24.0 million for each policy year, and a $ 48.0 million aggregate loss limit for the 36-month term originally ended March 1, 2021.

Under the policy, the Company may elect to commute the policy with respect to the first 12 months of the policy term and concurrently extend the policy for an additional one-year period if paid losses in the first 12 months of the policy are less than $ 5.2 million.

Under the policy, the Company could elect to commute the policy with respect to the first 12 months of the policy term and concurrently extend the policy for an additional one-year period if paid losses in the first 12 months of the policy were less than $ 5.2 million.

In August 2019, the Company elected to commute the policy for such period.

As a result, the Company received a return of $ 5.2 million of the premium paid (the maximum return premium available), based on the amount of claims paid and the insurer was released from all liability in connection with claims occurring in such 12-month period.

The Company is now self-insured for the first $ 10 million per occurrence with respect to such 12-month period and the policy has been extended for one additional year to March 1, 2022.

As a result of the return premium and policy extension, the Company recognized a $ 0.5 million reduction in insurance premium expense in the third quarter of 2021.

The Company will continue to recognize the remainder of the return premium as a reduction in insurance premium expense ratably over the remainder of the policy period now ending March 1, 2022.

Additionally, the Company is required to pay an additional premium of up to $ 11.0 million if losses paid by the insurer are greater than $ 15.6 million over the three-year policy period ending March 1, 2022.

Based on claims occurring since March 1, 2019, no such additional premium was accrued at September 30, 2021.

The Company is now self-insured for the first $ 10 million per occurrence with respect to such 12-month period and the policy was extended for one additional year to March 1, 2022.

The Company recognized the remaining $ 0.3 million of the return premium as a reduction in insurance premium expense in the first quarter of 2022 .

Effective March 1, 2022, the Company extended the policy term for one additional year to March 1, 2023.

Additionally, the Company is required to pay an additional premium of up to $ 11.0 million if losses paid by the insurer are greater than $ 17.5 million over the four-year policy period ending March 1, 2023.

Based on claims occurring since March 1, 2019, no such additional premium was accrued at March 31, 2022.

Commencing on August 30, 2023, the Company may elect to commute the policy with respect to the insurer’s entire liability under the policy in which case the Company would be entitled to a return of a portion of the premium paid, up to $ 17.5 million , based on the amount of claims paid and the insurer would be released from all liability under the policy ending March 1, 2023.

As a result, if the Company elects to commute the policy as to the entire policy term, the Company would be self-insured for $10 million per occurrence for the four years ended March 1, 2022.

Accounting Pronouncements Adopted in 2021

In 2019, the FASB issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, ” which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This standard became effective for interim and annual reporting periods beginning after December 15, 2020.

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

As a result, if the Company elects to commute the policy as to the entire policy term, the Company would be self-insured for $10 million per occurrence for the five years ended March 1, 2023.

Effective March 1, 2022 , the Company entered into an additional automobile liability insurance policy with a three-year term that is applicable when an occurrence exceeds $ 10 million.

Thereafter, the policy provides insurance coverage for a single loss of an additional $ 5.0 million, an aggregate loss limit of $ 10.0 million for each policy year, and a $ 20.0 million aggregate loss limit for the three-year term ending March 1, 2025.

Under the policy, the Company may elect to commute the policy for the three year term if losses incurred are less than $ 1.4 million and the Company does not elect to renew the policy.

In the event the Company elects to commute the policy for such period, it will be entitled to a return of a portion of the premium paid, up to $ 1.1 million, based on the amount of claims paid and the insurer will be released from all liability in connection with such period.

As a result, if the Company elects to commute the policy as to such period, the Company will be self-insured for the $ 10 million to $ 15 million loss layer per occurrence for the three years ended March 1, 2025.

The decision whether to commute the policy can not be made before June 1, 2024 and must be made prior to December 1, 2025, unless the insurer agrees to extend such date.

Additionally, the Company is required to pay an additional premium of up to $ 7.5 million if losses paid by the insurer are greater than $ 1.4 million over the three-year policy period ending March 1, 2025.

Based on claims occurring since March 1, 2022, no such additional premium was accrued at March 31, 2022 .

(2) Computation of Earnings Per Share

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

Third Quarter

First Quarter

Denominator for basic earnings per share–weighted

average common shares

Effect of dilutive stock options

Effect of other common stock equivalents

Dilutive effect of share-based awards

Denominator for diluted earnings per share–adjusted

2 unchanged sentences

Diluted Earnings Per Share

For both the quarter and nine months ended September 30, 2021, options and restricted stock for 19,250 shares of common stock were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

For the quarter ended September 30, 2020 there were no anti-dilutive options or restricted stock.

For the nine months ended September 30, 2020, options and restricted stock for 53,025 shares of common stock were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

For the quarter ended March 31, 2022, options and restricted stock for 15,808 shares of common stock were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

For the quarter ended March 31, 2021 options and restricted stock for 20,164 shares of common stock were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

(3) Commitments and Contingencies

The Company pays its pro rata share of the cost of letters of credit outstanding for certain workers’ compensation claims incurred prior to March 1, 2000 that Saia’s former parent maintains for insurance programs.

The Company’s pro rata share of these outstanding letters of credit was $ 1.8 million at September 30, 2021.

The Company’s pro rata share of these outstanding letters of credit was $ 1.8 million at March 31, 2022.

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

1 unchanged sentence

(4) Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximated fair value as of September 30, 2021 and December 31, 2020, because of the relatively short maturity of these instruments.

Based on the borrowing rates currently available to the Company for debt with similar terms and remaining maturities, the estimated fair value of total debt at September 30, 2021 and December 31, 2020 was $ 55.4 million and $ 71.2 million, respectively, based upon level two in the fair value hierarchy.

The carrying value of the debt was $ 55.2 million and $ 71.0 million at September 30, 2021 and December 31, 2020, respectively.

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

Based on the borrowing rates currently available to the Company for debt with similar terms and remaining maturities, the estimated fair value of total debt at March 31, 2022 and December 31, 2021 was $ 44.8 million and $ 50.8 million, respectively, based upon level two in the fair value hierarchy.

The carrying value of the debt was $ 44.9 million and $ 50.4 million at March 31, 2022 and December 31, 2021, respectively.

(5) Debt and Financing Arrangements

At September 30, 2021 and December 31, 2020, debt consisted of the following (in thousands):

September 30, 2021

At March 31, 2022 and December 31, 2021, debt consisted of the following (in thousands):

March 31, 2022

December 31, 2021

6 unchanged sentences

Credit Agreement

On February 5, 2019, the Company entered into the Sixth Amended and Restated Credit Agreement with its banking group (as amended, the Amended Credit Agreement).

The amendment increased the amount of the revolver from $ 250 million to $ 300 million and extended the term until February 2024 .

T he Company is a party to a Sixth Amended and Restated Credit Agreement with its banking group (the Amended Credit Agreement), which provides up to a $ 300 million revolving line of credit through February 2024 .

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

The amendment reduced the interest rate pricing.

The Amended Credit Agreement provides for a LIBOR rate margin range from 100 basis points to 200 basis points, base rate margins from minus 50 basis points to plus 50 basis points, an unused portion fee from 17.5 basis points to 30 basis points and letter of credit fees from 100 basis points to 200 basis points, in each case based on the Company’s leverage ratio.

3 unchanged sentences

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

At September 30, 2021, the Company had no outstanding borrowings and outstanding letters of credit of $ 29.3 million under the Amended Credit Agreement.

At March 31, 2022, the Company had no outstanding borrowings and outstanding letters of credit of $ 32.0 million under the Amended Credit Agreement.

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

2 unchanged sentences

The Company is obligated under finance leases with seven-year original terms covering revenue equipment.

Total liabilities recognized under finance leases were $ 55.2 million and $ 71.0 million as of September 30, 2021 and December 31, 2020, respectively.

Total liabilities recognized under finance leases were $ 44.9 million and $ 50.4 million as of March 31, 2022 and December 31, 2021, respectively.

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

A s of September 30, 2021 and December 31, 2020 , approximately $ 91.0 million and $ 100.1 million of finance leased assets, net of depreciation, were included in Property and Equipment, respectively.

The weighted average interest rates for the finance leases at September 30, 2021 and December 31, 2020 were 3.5 percent and 3.5 percent, respectively.

A s of March 31, 2022 and December 31, 2021 , approximately $ 78.4 million and $ 85.1 million of finance leased assets, net of depreciation, were included in Property and Equipment, respectively.

The weighted average interest rates for the finance leases at March 31, 2022 and December 31, 2021 were 3.6 percent and 3.6 percent, respectively.

Principal Maturities of Long-Term Debt

2 unchanged sentences

( 6) COVID-19

In March 2020, the World Health Organization categorized Coronavirus Disease 2019 (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency.

The Company is considered an essential and critical business by the U.S.

Department of Homeland Security’s Cyber and Infrastructure Security Agency (CISA) and will continue to operate under state of emergency and shelter in place orders issued in various jurisdictions across the country.

Management has made a variety of efforts seeking to ensure the ongoing availability of Saia’s transportation services, while instituting actions and policies to help safeguard employees and customers from COVID-19, including limiting physical employee and customer contact, implementing enhanced cleaning and hygiene protocols at Saia’s facilities, and instituting telecommuting as appropriate.

President Biden has issued a directive to OSHA to develop an Emergency Temporary Standard requiring all employers of 100 or more employees to ensure that their workforce is vaccinated or subject to weekly COVID-19 testing.

This standard, or comparable state or local requirements, could adversely affect our ability to hire and retain employees which could lead to service disruptions and higher costs.

Through the date of this filing, the Company has not experienced significant disruptions in the Company’s LTL network operations because of the COVID-19 pandemic.

The Company’s consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities.

The Company has considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s third quarter 2021 financial position.

It is possible that these assumptions and estimates may materially change in the future.

On March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment.

On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law and provides further economic relief and stimulus to deal with the economic impact of the COVID-19 pandemic.

The Company continues to monitor any effects that may result from these Acts and other similar legislation or actions in geographies in which our business operates;

however, the Company does not believe it will be able to take advantage of the provisions of these Acts.

The Company continues to monitor the progression of the COVID-19 pandemic, further government response, and development of treatments and vaccines and their potential effect on our short-term and long-term financial results and liquidity.

These events could have an impact in future periods on certain estimates used in the preparation of our 2022 financial results.

Local, state and national governments have designated transportation as an essential service.

The Company has made a variety of efforts to ensure the ongoing availability of Saia’s transportation services, while instituting actions and policies to help keep employees and customers safe.

The Company has considered the impact of COVID-19 on its estimates and assumptions and determined that there were no material adverse impacts on the Company’s financial position.

Given the uncertainty surrounding the duration of the pandemic, it is possible that these assumptions and estimates may materially change in the future.

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

What changed 10-Q

Item 1. Financial Statements