SCST SCS Transport (MM)

SCS Transportation, Inc. (Nasdaq:SCST) today reported third-quarter revenue of $284.5 million, up 11 percent from $256.8 million in the third quarter of 2004. Consolidated operating income for the third quarter was $13.9 million, up 3 percent from the prior-year quarter. Net income was $7.0 million, up 7 percent from $6.6 million in the third quarter of 2004. Earnings per share were $0.47, a 9 percent increase compared with $0.43 a year earlier. "We achieved record consolidated revenues and earnings in the quarter, despite weather challenges in our historically important Gulf Coast markets," said Bert Trucksess, chairman, president and chief executive officer of SCS Transportation. "We believe ongoing initiatives provide further opportunity for revenue and profitability improvements." The current-quarter and year-earlier operating results were subject to several unusual items: -- Hurricanes Katrina and Rita caused property damage and disrupted operations, which adversely impacted third-quarter consolidated results. The company has not completed an assessment of business interruption impact and third-quarter results do not include an estimate of insurance recovery, which we anticipate in a future period. -- Current-quarter results also include a charge of $0.8 million, or $0.03 per share, for executive severance costs. -- Third-quarter 2004 results at Jevic included a $1.9 million charge, which resulted from unfavorable development of prior-year workers' compensation claims, partially offset by a $0.6 million gain on the sale of excess real estate, for a net unfavorable impact of $0.05 per share. Update on Operating Companies Saia -- Revenue increased 15 percent to $198.8 million versus the prior-year quarter. -- LTL tonnage increased 7 percent from the prior year. -- Operating income rose 27 percent to $13.4 million, for an operating ratio of 93.3 percent. "Saia's momentum in growth and profitability improvement continued, despite significant impact from Hurricanes Katrina and Rita," Trucksess said. "Saia is focused on capitalizing on industry consolidation opportunities, while they continue to evaluate future geographic expansion." Jevic -- Revenue was $85.7 million, up 1 percent from 2004. -- Tonnage weakness continued, with tonnage down 4 percent versus 2004. -- Operating income was $1.4 million, for an operating ratio of 98.4 percent. "Jevic's priority is to improve profitability and we are pleased with the early progress under Dave Gorman's new leadership," Trucksess said. "Key initiatives focus on the basic fundamentals of growing LTL tonnage, improving cost effectiveness and improving revenue quality." Financial Position and Outlook Total debt at September 30, 2005, was $125.8 million and debt to total capital stood at 36.6 percent. The Company expects net capital expenditures of approximately $65 to $75 million in 2005. Net capital expenditures year-to-date were $42.4 million. As of September 30, 2005, the Company has acquired 724,900 shares at a cost representing 64 percent of its $20 million stock repurchase program. Year-to-date earnings per share are $1.10. Third-quarter trends, seasonally adjusted and without unusual items, are continuing early in the fourth quarter. Consistent with recent past practice of not providing individual quarterly guidance, the Company is not providing guidance on the fourth quarter and thus the full calendar year. Further, the Company intends to discontinue the practice of providing annual earnings guidance, in favor of offering long-term perspectives on business rather than shorter-term numerical ranges. Conference Call SCST will hold a conference call to discuss third-quarter results on Wednesday, October 26, 2005, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). To participate in the call, please dial 800-275-8866 or dial 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 November 2, 2005. The replay is available by dialing 800-642-1687 and using conference code 1163793. 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, insurance coverage, property, revenue equipment and other 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 including fuel surcharges and other accessorials; terrorism risks; insurance claim recoveries, 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. -0- *T SCS Transportation, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) September 30, December 31, 2005 2004 ------------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $3,943 $7,499 Accounts receivable 141,927 110,044 Prepaid expenses and other 34,214 35,721 ------- ------- Total current assets 180,084 153,264 PROPERTY AND EQUIPMENT: Cost 602,037 569,526 Less: Accumulated depreciation 269,849 248,914 ------- ------- Net property and equipment 332,188 320,612 GOODWILL AND OTHER ASSETS 34,457 34,862 ------- ------- Total assets $546,729 $508,738 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and checks outstanding $52,749 $33,193 Wages and employees' benefits 42,401 35,761 Other current liabilities 35,201 28,981 Current portion of long-term debt 2,500 1,263 ------- ------- Total current liabilities 132,851 99,198 OTHER LIABILITIES: Long-term debt 123,281 121,547 Deferred income taxes 51,951 57,662 Claims, insurance and other 21,110 17,789 ------- ------- Total other liabilities 196,342 196,998 SHAREHOLDERS' EQUITY: Common stock 15 15 Additional paid-in capital 207,066 205,800 Treasury stock (12,721) - Deferred compensation trust (1,411) (1,116) Retained earnings 24,587 7,843 ------- ------- Total shareholders' equity 217,536 212,542 ------- ------- Total liabilities and shareholders' equity $546,729 $508,738 ======= ======= *T -0- *T SCS Transportation, Inc. and Subsidiaries Consolidated Income Statements For the Quarter and Nine Months Ended September 30, 2005 and 2004 (Amounts in thousands, except per share data) (Unaudited) Third Quarter Nine Months ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- OPERATING REVENUE $284,537 $256,824 $809,711 $730,332 OPERATING EXPENSES: Salaries, wages and employees' benefits 152,651 143,074 440,169 408,300 Purchased transportation 26,656 25,241 71,473 68,817 Operating expenses and supplies 61,843 48,461 170,525 136,096 Operating taxes and licenses 10,531 9,583 31,566 28,076 Claims and insurance 7,107 6,074 25,789 21,071 Depreciation and amortization 12,253 12,180 36,129 35,957 Operating (gains) and losses (378) (1,305) (1,295) (1,734) Integration charges - - - 2,054 --------- --------- --------- --------- Total operating expenses 270,663 243,308 774,356 698,637 --------- --------- --------- --------- OPERATING INCOME 13,874 13,516 35,355 31,695 NONOPERATING EXPENSES: Interest expense 2,388 2,489 7,239 7,296 Other, net (137) (19) (120) (146) --------- --------- --------- --------- Nonoperating expenses, net 2,251 2,470 7,119 7,150 INCOME BEFORE INCOME TAXES 11,623 11,046 28,236 24,545 Income tax provision 4,641 4,494 11,492 9,913 --------- --------- --------- --------- NET INCOME $6,982 $6,552 $16,744 $14,632 ========= ========= ========= ========= Average common shares outstanding -- basic 14,499 14,910 14,815 14,830 ========= ========= ========= ========= Average common shares outstanding -- diluted 14,828 15,345 15,158 15,300 ========= ========= ========= ========= Basic earnings per share $0.48 $0.44 $1.13 $0.99 ========= ========= ========= ========= Diluted earnings per share $0.47 $0.43 $1.10 $0.96 ========= ========= ========= ========= *T -0- *T SCS Transportation, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2005 and 2004 (Amounts in thousands) (Unaudited) 2005 2004 -------- -------- OPERATING ACTIVITIES: Net cash from operating activities $48,181 $43,453 INVESTING ACTIVITIES: Acquisition of property and equipment (45,880) (35,437) Proceeds from disposal of property and equipment 3,433 7,332 Acquisition of subsidiary, net of cash received - (23,549) -------- -------- Net cash used in investing activities (42,447) (51,654) FINANCING ACTIVITIES: Borrowing of long-term debt 10,886 - Repayment of long-term debt (8,002) - Repurchase of common stock (12,721) - Proceeds from stock option exercises 547 1,118 -------- -------- Net cash from (used in) financing activities (9,290) 1,118 -------- -------- NET DECREASE IN CASH & CASH EQUIVALENTS (3,556) (7,083) CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 7,499 30,870 -------- -------- CASH & CASH EQUIVALENTS, END OF PERIOD $3,943 $23,787 ======== ======== *T -0- *T Saia Motor Freight Line, Inc. Financial Information For the Quarter and Nine Months Ended September 30, 2005 and 2004 (Amounts in thousands) Third Quarter % Nine Months % ---------------- ---------------- 2005 2004 Change 2005 2004 Change ---------------- ------ ---------------- ------ Operating revenue (excluding fuel surcharge) 177,984 162,341 9.6 501,398 455,062 10.2 Operating revenue 198,810 172,307 15.4 551,599 479,727 15.0 Operating income 13,406 10,526 34,876 25,734 Integration charges(a) - - - 2,054 Operating income excluding integration charges(a) 13,406 10,526 34,876 27,788 Operating ratio 93.3 93.9 93.7 94.6 Operating ratio excluding integration charges(a) 93.3 93.9 93.7 94.2 Third Quarter ---------------- Third Quarter % Amount/Workday % ---------------- ---------------- 2005 2004 Change 2005 2004 Change ---------------- ------ ---------------- ------ Workdays 64 64 F/S Revenue LTL 183,929 159,672 15.2 2,873.9 2,494.9 15.2 TL 14,881 12,635 17.8 232.5 197.4 17.8 Total 198,810 172,307 15.4 3,106.4 2,692.3 15.4 Revenue excluding LTL 184,207 159,723 15.3 2,878.2 2,495.7 15.3 revenue recognition TL 14,904 12,639 17.9 232.9 197.5 17.9 adjustment Total 199,111 172,362 15.5 3,111.1 2,693.2 15.5 Tonnage LTL 821 764 7.4 12.82 11.93 7.4 TL 170 160 6.2 2.66 2.51 6.2 Total 991 924 7.2 15.48 14.44 7.2 Shipments LTL 1,477 1,398 5.6 23.07 21.84 5.6 TL 23 22 8.0 0.36 0.34 8.0 Total 1,500 1,420 5.7 23.43 22.18 5.7 Revenue/cwt. LTL 11.22 10.46 7.4 TL 4.37 3.94 11.0 Total 10.05 9.33 7.7 Revenue/cwt. LTL 9.97 9.81 1.6 (excluding fuel surcharge) TL 4.29 3.90 10.0 Total 9.00 8.79 2.4 Revenue/ shipment LTL 124.74 114.26 9.2 TL 641.58 587.61 9.2 Total 132.75 121.44 9.3 Pounds/ shipment LTL 1,111 1,093 1.7 TL 14,666 14,910 (1.6) Total 1,321 1,302 1.5 (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 Nine Months Ended September 30, 2005 and 2004 (Amounts in thousands) Third Quarter % Nine Months % --------------- ---------------- 2005 2004 Change 2005 2004 Change -------------- ------ ---------------- ------ Operating revenue (excluding fuel surcharge) 76,128 79,406 (4.1) 233,666 237,317 (1.5) Operating revenue 85,727 84,517 1.4 258,112 250,605 3.0 Operating income 1,414 2,832 2,461 8,300 Operating ratio 98.4 96.6 99.0 96.7 Third Quarter ----------------- Third Quarter % Amount/Workday % --------------- ----------------- 2005 2004 Change 2005 2004 Change -------------- ------ ---------------- ------ Workdays 64 64 F/S Revenue LTL 54,243 54,469 (0.4) 847.5 851.1 (0.4) TL 27,263 26,450 3.1 426.0 413.3 3.1 Other 4,221 3,598 17.3 66.0 56.2 17.3 Total 85,727 84,517 1.4 1,339.5 1,320.6 1.4 Revenue excluding LTL 54,420 54,663 (0.4) 850.3 854.1 (0.4) revenue recognition TL 27,360 26,548 3.1 427.5 414.8 3.1 adjustment Other 4,221 3,598 17.3 66.0 56.2 17.3 Total 86,001 84,809 1.4 1,343.8 1,325.1 1.4 Tonnage LTL 250 266 (6.1) 3.90 4.16 (6.1) TL 294 301 (2.2) 4.59 4.70 (2.2) Total 544 567 (4.0) 8.49 8.86 (4.0) Shipments LTL 209 221 (5.4) 3.26 3.45 (5.4) TL 34 36 (3.9) 0.54 0.56 (3.9) Total 243 257 (5.2) 3.80 4.01 (5.2) Revenue/cwt. LTL 10.89 10.28 6.0 TL 4.66 4.42 5.4 Total 7.52 7.17 4.9 Revenue/cwt. LTL 9.62 9.63 (0.2) (excl. fuel surcharge) TL 4.11 4.14 (0.7) Total 6.64 6.72 (1.2) Revenue/ shipment LTL 260.53 247.68 5.2 TL 798.65 744.71 7.2 Total 336.35 316.80 6.2 Pounds/ shipment LTL 2,391 2,410 (0.8) TL 17,154 16,864 1.7 Total 4,477 4,412 1.5 *T