SCST SCS Transport (MM)

SCS Transportation, Inc. (NASDAQ: SCST), today reported second-quarter revenue of $271.9 million, up 10 percent from $248.2 million in the second quarter of 2004. Consolidated operating income was $12.2 million in the second quarter, up 7 percent from $11.4 million a year earlier, which included $1.1 million in integration charges pertaining to a Midwest acquisition. Net income was $5.8 million in the quarter, a 6 percent increase from $5.5 million in the second quarter of 2004. Earnings per share were $0.38, up 6 percent from $0.36 a year earlier. "Saia continues to deliver stronger operating performance with growth rates increasing during the second quarter. Jevic's operating improvement initiatives are ongoing, but weaker tonnage has hindered achieving targeted financial performance," said Bert Trucksess, chairman, president and chief executive officer. In the first six months of 2005, revenues were $525.2 million, up 11 percent from $473.5 million a year earlier. Consolidated operating income was $21.5 million, up 18 percent from $18.2 million in the first half of 2004, which included $2.1 million in integration charges. Net income was $9.8 million, up 21 percent from $8.1 million in the first half of 2004. Earnings per share were $0.64 for the six months, up 21 percent from $0.53 a year earlier. Update on Operating Companies Saia second-quarter revenue grew 13 percent to $185.8 million and included benefits from the momentum of a 2004 expansion into the Midwest and competitor withdrawals in selected markets. Favorable revenue trends and effective cost management generated second-quarter operating income at Saia of $12.5 million, up 37 percent from a year earlier. As reported on July 7, the current quarter's results include $2.5 million in higher than anticipated expenses from severe accidents and an adverse verdict relating to a 2001 employment matter, while the prior-year quarter included $1.1 million in integration charges for the Midwest expansion as well as accident expenses $1.4 million higher than historical levels. Less-than-truckload (LTL) tonnage for the quarter grew 4 percent and strengthened through the quarter. Benefiting from a favorable pricing environment, LTL revenue per hundredweight increased 9 percent and 5 percent excluding the impact of fuel surcharges. Saia's operating ratio in the quarter was 93.3 percent, compared to 93.8 percent a year earlier, excluding the integration charges in 2004. Jevic revenue was $86.1 million in the second quarter, up 3 percent from a year earlier. Total tonnage was down 4 percent from the prior-year quarter, as growth initiatives have not offset volume losses experienced in the first quarter and into the middle of the second quarter, which we believe result from lag effects of 2004 service issues and competitive factors. Total revenue per hundredweight was up 6 percent, just over 1 percent excluding the impact of fuel surcharges. Jevic operating income was $0.5 million, compared to $3.6 million in the second quarter of 2004, producing an operating ratio for the quarter of 99.4 percent. Service improvements implemented early in 2005 are delivering consistently high levels of on-time performance. While Jevic efficiency initiatives are producing incremental improvements in fixed and variable costs, second-quarter results were adversely impacted by diseconomies from weak tonnage. Outlook and Financial Position As updated in our July 7, 2005 release, SCS Transportation expects 2005 earnings per share in a range of $1.35 to $1.50. The Company expects net capital expenditures of approximately $70 to $80 million in 2005, including $10 to $20 million for certain strategic real estate transactions. Year-to-date net capital expenditures were $24.7 million. During the quarter, the Company purchased 517,300 shares, representing 46 percent of the $20 million authorized under the stock repurchase program announced on May 3, 2005. Conference Call SCST will hold a conference call to discuss second-quarter results on Tuesday, July 19, 2005, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). To participate in the call, please dial 1-800-275-8866 or dial 1-706-634-4936 for international calls. Callers should dial in five to 10 minutes in advance of the conference call. This call will be webcast live via the Company web site at www.scstransportation.com and will be archived on the site. A replay of the call will be available two hours after the completion of the call through August 2, 2005. The replay is available by dialing 1-800-642-1687 and using conference code 7677597. The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com). SCS Transportation, Inc. provides trucking transportation and supply chain solutions to a broad base of customers across the United States. With annual revenue exceeding $1 billion, the Company focuses on regional and interregional less-than-truckload (LTL), and selected truckload (TL) and time-definite services. Operating subsidiaries are Saia, a multi-region LTL carrier based in Duluth, Ga., and Jevic, a hybrid LTL and truckload carrier based in Delanco, N.J. Headquartered in Kansas City, Mo., SCST has approximately 9,000 employees nationwide. The Securities and Exchange Commission 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 news release contains these types of statements, which are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "project," "intend," "may," "plan," "predict," "believe" and similar words or expressions are intended to identify forward-looking statements. We use such forward-looking statements regarding our future financial condition and results of operations and our business operations in this release. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements reflect the present expectation of future events of our management and are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. These factors and risks include, but are not limited to, general economic conditions; labor relations; cost and availability of qualified drivers, fuel, purchased transportation and operating assets; governmental regulations, including but not limited to Hours of Service, engine emissions, compliance with recent legislation requiring companies to evaluate their internal control over financial reporting and Homeland Security; dependence on key employees; inclement weather; integration risks; effectiveness of company-specific performance improvement initiatives; competitive initiatives and pricing pressures; terrorism risks; self-insurance claims, equity-based compensation and other expense volatility; the Company's determination from time to time whether to purchase any shares under the repurchase program; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's SEC filings. Editor's note: Photography, video B-roll and logos for SCS Transportation are available upon request. -0- *T SCS Transportation, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) June 30, December 31, 2005 2004 ----------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $8,353 $7,499 Accounts receivable 122,266 110,044 Prepaid expenses and other 30,195 35,721 ----------- ------------ Total current assets 160,814 153,264 PROPERTY AND EQUIPMENT: Cost 587,634 569,526 Less: Accumulated depreciation 261,846 248,914 ----------- ------------ Net property and equipment 325,788 320,612 GOODWILL AND OTHER ASSETS 34,689 34,862 ----------- ------------ Total assets $521,291 $508,738 =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and checks outstanding $42,462 $33,193 Wages and employees' benefits 37,369 35,761 Other current liabilities 29,071 28,981 Current portion of long-term debt 2,500 1,263 ----------- ------------ Total current liabilities 111,402 99,198 OTHER LIABILITIES: Long-term debt 116,378 121,547 Deferred income taxes 57,478 57,662 Claims, insurance and other 21,941 17,789 ----------- ------------ Total other liabilities 195,797 196,998 SHAREHOLDERS' EQUITY: Common stock 15 15 Additional paid-in capital 206,971 205,800 Treasury stock (9,177) - Deferred compensation trust (1,322) (1,116) Retained earnings 17,605 7,843 ----------- ------------ Total shareholders' equity 214,092 212,542 ----------- ------------ Total liabilities and shareholders' equity $521,291 $508,738 =========== ============ *T -0- *T SCS Transportation, Inc. and Subsidiaries Consolidated Income Statements For the Quarter and Six Months Ended June 30, 2005 and 2004 (Amounts in thousands, except per share data) (Unaudited) Second Quarter Six Months ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- OPERATING REVENUE $271,886 $248,232 $525,173 $473,508 OPERATING EXPENSES: Salaries, wages and employees' benefits 146,831 137,283 287,517 265,226 Purchased transportation 23,802 23,424 44,818 43,576 Operating expenses and supplies 56,548 45,498 108,683 87,635 Operating taxes and licenses 10,608 9,353 21,035 18,493 Claims and insurance 10,232 8,516 18,681 14,997 Depreciation and amortization 12,207 12,154 23,876 23,776 Operating (gains) and losses (583) (437) (917) (428) Integration charges - 1,050 - 2,054 --------- --------- --------- --------- Total operating expenses 259,645 236,841 503,693 455,329 --------- --------- --------- --------- OPERATING INCOME 12,241 11,391 21,480 18,179 NONOPERATING EXPENSES: Interest expense 2,429 2,386 4,850 4,807 Other, net (95) (51) 17 (126) --------- --------- --------- --------- Nonoperating expenses, net 2,334 2,335 4,867 4,681 INCOME BEFORE INCOME TAXES 9,907 9,056 16,613 13,498 Income tax provision 4,117 3,583 6,851 5,418 --------- --------- --------- --------- NET INCOME $5,790 $5,473 $9,762 $8,080 ========= ========= ========= ========= Average common shares outstanding - basic 14,892 14,837 14,975 14,789 ========= ========= ========= ========= Average common shares outstanding - diluted 15,217 15,312 15,318 15,274 ========= ========= ========= ========= Basic earnings per share $0.39 $0.37 $0.65 $0.55 ========= ========= ========= ========= Diluted earnings per share $0.38 $0.36 $0.64 $0.53 ========= ========= ========= ========= *T -0- *T SCS Transportation, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2005 and 2004 (Amounts in thousands) (Unaudited) 2005 2004 -------- -------- OPERATING ACTIVITIES: Net cash from operating activities $38,174 $29,027 INVESTING ACTIVITIES: Acquisition of property and equipment (27,262) (18,725) Proceeds from disposal of property and equipment 2,607 2,646 Acquisition of subsidiary, net of cash received - (23,549) -------- -------- Net cash used in investing activities (24,655) (39,628) FINANCING ACTIVITIES: Repayment of long-term debt (8,002) - Borrowing of long-term debt 4,000 - Repurchase of common stock (9,177) - Proceeds from stock option exercises 514 755 -------- -------- Net cash from (used in) financing activities (12,665) 755 -------- -------- NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 854 (9,846) CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 7,499 30,870 -------- -------- CASH & CASH EQUIVALENTS, END OF PERIOD $8,353 $21,024 ======== ======== *T -0- *T Saia Motor Freight Line, Inc. Financial Information For the Quarter and Six Months Ended June 30, 2005 and 2004 (Amounts in thousands) Second Quarter Six Months ---------------- % ---------------- % 2005 2004 Change 2005 2004 Change ---------------- ------ ---------------- ------ Operating revenue (excluding fuel surcharge) 169,473 156,014 8.6 323,414 292,721 10.5 Operating revenue 185,824 164,604 12.9 352,789 307,420 14.8 Operating income 12,507 9,114 21,470 15,207 Integration charges(a) - 1,050 - 2,054 Operating income excluding integration charges(a) 12,507 10,164 21,470 17,261 Operating ratio 93.3 94.5 93.9 95.1 Operating ratio excluding integration charges(a) 93.3 93.8 93.9 94.4 Second Quarter ---------------- Second Quarter % Amount/Workday % ---------------- ---------------- 2005 2004 Change 2005 2004 Change ---------------- ------ ---------------- ------ Workdays 64 64 F/S Revenue LTL 172,432 152,167 13.3 2,694.3 2,377.6 13.3 TL 13,392 12,437 7.7 209.3 194.3 7.7 Total 185,824 164,604 12.9 2,903.6 2,571.9 12.9 Revenue excluding LTL 172,720 152,440 13.3 2,698.8 2,381.9 13.3 revenue recognition TL 13,414 12,459 7.7 209.6 194.7 7.7 adjustment Total 186,134 164,899 12.9 2,908.4 2,576.6 12.9 Tonnage LTL 787 759 3.6 12.29 11.86 3.6 TL 162 165 (1.6) 2.54 2.57 (1.6) Total 949 924 2.7 14.83 14.43 2.7 Shipments LTL 1,416 1,380 2.6 22.12 21.56 2.6 TL 22 22 (0.5) 0.34 0.34 (0.5) Total 1,438 1,402 2.5 22.46 21.90 2.5 Revenue/cwt. LTL 10.98 10.04 9.3 TL 4.13 3.78 9.5 Total 9.81 8.93 9.9 Revenue/cwt. LTL 9.95 9.48 4.9 (excluding fuel surcharge) TL 4.07 3.75 8.6 Total 8.95 8.46 5.8 Revenue/shipment LTL 121.99 110.49 10.4 TL 612.93 576.43 8.2 Total 129.47 117.68 10.1 Pounds/shipment LTL 1,111 1,100 1.0 TL 14,831 15,236 (1.1) Total 1,320 1,318 0.2 (a) Integration charges consist of employee retention and stay bonuses, communications, re-logoing the fleet of Clark Bros., technology integration and other items in connection with the integration of the operations of Clark Bros. Management believes that excluding these charges more accurately reflects the core operating performance of Saia. *T -0- *T Jevic Transportation, Inc. Financial Information For the Quarter and Six Months Ended June 30, 2005 and 2004 (Amounts in thousands) Second Quarter Six Months --------------- % ---------------- % 2005 2004 Change 2005 2004 Change -------------- ------ ---------------- ------ Operating revenue (excluding fuel surcharge) 77,968 79,125 (1.5) 157,538 157,912 (0.2) Operating revenue 86,061 83,628 2.9 172,384 166,088 3.8 Operating income 529 3,587 1,047 5,468 Operating ratio 99.4 95.7 99.4 96.7 Second Quarter ----------------- Second Quarter Amount/Workday --------------- % ----------------- % 2005 2004 Change 2005 2004 Change -------------- ------ ---------------- ------ Workdays 64 63 F/S Revenue LTL 54,666 53,731 1.7 854.2 852.9 0.2 TL 27,281 26,792 1.8 426.3 425.3 0.2 Other 4,114 3,105 32.5 64.3 49.3 30.4 Total 86,061 83,628 2.9 1,344.8 1,327.5 1.3 Revenue excluding LTL 54,632 53,641 1.8 853.6 851.4 0.3 revenue recognition TL 27,263 26,747 1.9 426.0 424.6 0.3 adjustment Other 4,114 3,105 32.5 64.3 49.3 30.4 Total 86,009 83,493 3.0 1,343.9 1,325.3 1.4 Tonnage LTL 254 270 (5.8) 3.97 4.29 (7.3) TL 303 310 (2.3) 4.74 4.93 (3.8) Total 557 580 (4.0) 8.71 9.22 (5.5) Shipments LTL 215 222 (3.2) 3.36 3.52 (4.7) TL 35 37 (5.0) 0.54 0.58 (6.5) Total 250 259 (3.4) 3.90 4.10 (5.0) Revenue/cwt. LTL 10.74 9.93 8.2 TL 4.50 4.31 4.4 Total 7.35 6.93 6.1 Revenue/cwt. LTL 9.68 9.37 3.2 (excl. fuel surcharge) TL 4.05 4.07 (0.4) Total 6.62 6.54 1.3 Revenue/shipment LTL 254.43 241.83 5.2 TL 782.83 729.78 7.3 Total 328.17 311.02 5.5 Pounds/shipment LTL 2,369 2,435 (2.7) TL 17,406 16,933 2.8 Total 4,456 4,479 (0.5) *T