SCS Transport (NASDAQ:SCST)
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SCS Transportation, Inc. (NASDAQ: SCST), today reported
full-year 2005 revenue of $1.1 billion, an increase of 12 percent from
2004. Consolidated 2005 operating income improved significantly to
$54.6 million, including a pretax real estate gain of $7.0 million,
compared with 2004 operating income of $40.8 million. Net income was
$27.5 million, including $4.4 million after tax from the real estate
gain, up from $19.3 million in 2004. Earnings per share were $1.82,
including the real estate gain of $0.29, up from $1.26 in 2004.
"For the third consecutive year, SCS Transportation delivered
significantly improved earnings," said Bert Trucksess, chairman,
president and chief executive officer. "Revenue surpassed $1 billion
in 2005 and we achieved record results in earnings per share, even
excluding a large real estate gain. We further strengthened our
financial position, providing flexibility to take advantage of future
opportunities. As we enter 2006, we are also encouraged by the
strength of our consolidated fourth-quarter trends."
Fourth-quarter revenue grew 14 percent to $288.3 million, from
$251.9 million in the fourth quarter of 2004. Consolidated
fourth-quarter operating income was $19.3 million, including the real
estate gain, up from $9.1 million in the prior-year quarter. Net
income was $10.7 million, up from $4.6 million in the fourth quarter
of 2004. Earnings per share were $0.73, including the real estate
gain, compared with earnings per share of $0.30 a year earlier.
Saia Fourth-Quarter Operations
-- Revenue increased 22 percent to $202.4 million versus the
prior-year quarter.
-- LTL tonnage increased 13 percent and LTL yield grew 8 percent
from a year earlier.
-- Operating income increased 33 percent and Saia's operating
ratio improved to 93.4 percent, both excluding the real estate
gain.
"Saia, a leading multi-region LTL carrier and our largest
subsidiary, continues to excel in serving customers across its
30-state territory, delivering top-line growth and increased
profitability," Trucksess said. "We believe Saia's prospects are very
favorable and we expect to build upon the positive momentum of this
business. We continue to evaluate geographic expansion opportunities
and we believe the business is well-positioned to benefit from
industry consolidation."
Jevic Fourth-Quarter Operations
-- Revenue was $87.2 million, up 1 percent from the prior-year
quarter.
-- Total tonnage was down 2 percent and overall yields were up 4
percent from a year earlier.
-- Operating income was $0.7 million and Jevic's operating ratio
was 99.2 percent. Jevic's fourth-quarter 2004 operating income
was $0.6 million, which included a charge of $3.8 million for
an increase in estimated liability for workers' compensation
claims.
"Profitability at Jevic, our hybrid LTL and truckload carrier
business, has not been acceptable in recent years and, in August 2005,
we gave Dave Gorman a mandate for change as the new President and CEO
of Jevic. He is leading the evaluation and implementation of
initiatives designed to improve current operations and profitability
while maintaining high and consistent levels of service performance.
We remain focused on growing Jevic's LTL tonnage, improving cost
effectiveness and enhancing revenue quality, all with the goal of
significantly improving profitability," Trucksess said.
Financial Position and Outlook
Based on consensus economic forecasts for 2006 and 2007 and
ongoing consolidation in the LTL trucking industry, SCS Transportation
expects to continue to benefit from a favorable supply-demand
environment. The Company's operational priorities for 2006 include,
among others, continued revenue growth and profit improvement in the
current Saia geography, potential expansion of Saia's geographic
reach, and progress on the profit improvement program being
implemented at Jevic.
Total debt at December 31, 2005, was $114.9 million, compared with
$122.8 million at December 31, 2004. Debt to total capital stood at
33.5 percent at year-end, compared with 36.6 percent a year earlier.
Net capital expenditures in 2005 were $53.7 million, including net
proceeds of $8.8 million from the real estate sale. Including the
delay of several originally planned 2005 expenditures, the company is
planning net capital expenditures in 2006 of approximately $85 million
plus up to an additional $25 million for real estate projects in
Saia's existing geography.
Conference Call
SCST will hold a conference call to discuss annual and
fourth-quarter results on Wednesday, January 25, 2006, at 9:30 a.m.
Eastern Time (8:30 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 February 1, 2006. The replay is available by dialing
1-800-642-1687 and using conference code 3703389.
The webcast is also being distributed through the Thomson
StreetEvents Network. Individual investors can listen to the call at
www.earnings.com, Thomson's individual investor portal, powered by
StreetEvents. Institutional investors can access the call via Thomson
StreetEvents (www.streetevents.com), a password-protected event
management site.
SCS Transportation, Inc. provides trucking transportation and
supply chain solutions to a broad base of customers across the United
States. With annual revenue of $1.1 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; the effects and outcomes
of strategic evaluations; cost and availability of qualified drivers,
fuel, purchased transportation, 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; labor relations; 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.
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SCS Transportation, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
December December
31, 31,
2005 2004
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,865 $ 7,499
Accounts receivable 126,823 110,044
Prepaid expenses and other 30,557 35,721
--------- ---------
Total current assets 174,245 153,264
PROPERTY AND EQUIPMENT:
Cost 620,899 569,526
Less: Accumulated depreciation 275,366 248,914
--------- ---------
Net property and equipment 345,533 320,612
GOODWILL AND OTHER ASSETS 34,963 34,862
--------- ---------
Total assets $554,741 $508,738
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and checks outstanding $ 54,941 $ 33,193
Wages and employees' benefits 43,490 35,761
Other current liabilities 33,156 28,981
Current portion of long-term debt 5,000 1,263
--------- ---------
Total current liabilities 136,587 99,198
OTHER LIABILITIES:
Long-term debt 109,913 121,547
Deferred income taxes 58,062 57,662
Claims, insurance and other 21,787 17,789
--------- ---------
Total other liabilities 189,762 196,998
SHAREHOLDERS' EQUITY:
Common stock 14 15
Additional paid-in capital 194,398 205,800
Deferred compensation trust (1,322) (1,116)
Retained earnings 35,302 7,843
--------- ---------
Total shareholders' equity 228,392 212,542
--------- ---------
Total liabilities and shareholders' equity $554,741 $508,738
========= =========
SCS Transportation, Inc. and Subsidiaries
Consolidated Income Statements
For the Quarter and Year Ended December 31, 2005 and 2004
(Amounts in thousands, except per share data)
(Unaudited)
Fourth Quarter Year Ended
------------------- ---------------------
2005 2004 2005 2004
--------- --------- ----------- ---------
OPERATING REVENUE $288,320 $251,938 $1,098,031 $982,270
OPERATING EXPENSES:
Salaries, wages and
employees' benefits 154,475 141,211 594,644 549,511
Purchased transportation 27,661 23,282 99,134 92,099
Operating expenses and
supplies 64,767 51,000 235,292 187,096
Operating taxes and
licenses 10,580 9,941 42,146 38,017
Claims and insurance 6,855 6,687 32,645 27,758
Depreciation and
amortization 12,075 12,011 48,204 47,968
Operating (gains) and
losses (7,381) (1,333) (8,676) (3,067)
Integration charges - - - 2,054
--------- --------- ----------- ---------
Total operating expenses 269,032 242,799 1,043,389 941,436
--------- --------- ----------- ---------
OPERATING INCOME 19,288 9,139 54,642 40,834
NONOPERATING EXPENSES:
Interest expense 2,535 2,439 9,773 9,735
Other, net (399) (166) (519) (312)
--------- --------- ----------- ---------
Nonoperating expenses,
net 2,136 2,273 9,254 9,423
INCOME BEFORE INCOME TAXES 17,152 6,866 45,388 31,411
Income tax provision 6,437 2,239 17,929 12,152
--------- --------- ----------- ---------
NET INCOME $ 10,715 $ 4,627 $ 27,459 $ 19,259
========= ========= =========== =========
Average common shares
outstanding - basic 14,386 14,940 14,707 14,858
========= ========= =========== =========
Average common shares
outstanding - diluted 14,724 15,347 15,048 15,312
========= ========= =========== =========
Basic earnings per share $ 0.74 $ 0.31 $ 1.87 $ 1.30
========= ========= =========== =========
Diluted earnings per share $ 0.73 $ 0.30 $ 1.82 $ 1.26
========= ========= =========== =========
SCS Transportation, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2005 and 2004
(Amounts in thousands)
(Unaudited)
2005 2004
-------- --------
OPERATING ACTIVITIES:
Net cash from operating activities $83,353 $54,894
INVESTING ACTIVITIES:
Acquisition of property and equipment (67,596) (67,113)
Proceeds from disposal of property and equipment 13,895 10,670
Acquisition of subsidiary, net of cash received - (23,549)
-------- --------
Net cash used in investing activities (53,701) (79,992)
FINANCING ACTIVITIES:
Repayment of long-term debt (8,002) -
Repurchase of common stock (12,903) -
Proceeds from stock option exercises 619 1,727
-------- --------
Net cash from (used in) financing activities (20,286) 1,727
-------- --------
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 9,366 (23,371)
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 7,499 30,870
-------- --------
CASH & CASH EQUIVALENTS, END OF PERIOD $16,865 $ 7,499
======== ========
Saia Motor Freight Line, Inc.
Financial Information
For the Quarter and Year Ended December 31, 2005 and 2004
(Amounts in thousands)
Fourth Quarter Year Ended
---------------- % ---------------- %
2005 2004 Change 2005 2004 Change
---------------- ------ ---------------- ------
Operating revenue
(excluding fuel
surcharge) 178,508 152,747 16.9 679,906 607,810 11.9
Operating revenue 202,438 165,647 22.2 754,038 645,374 16.8
Operating income 20,419 10,090 55,294 35,823
Real estate (gain) and
integration charges(a) (7,036) - (7,036) 2,054
Operating ratio 89.9 93.9 92.7 94.4
Operating ratio
excluding real estate
gain and integration
charges(a) 93.4 93.9 93.6 94.1
Fourth Quarter
--------------------- %
2005 2004 Change
--------------------- --------
Workdays
F/S Revenue LTL 186,544 153,440 21.6
TL 15,894 12,207 30.2
Total 202,438 165,647 22.2
Revenue excluding LTL 186,090 153,018 21.6
revenue recognition TL 15,855 12,173 30.2
adjustment Total 201,945 165,191 22.2
Tonnage LTL 806 715 12.7
TL 174 148 18.0
Total 980 863 13.6
Shipments LTL 1,436 1,285 11.7
TL 24 20 20.5
Total 1,460 1,305 11.9
Revenue/cwt. LTL 11.55 10.70 7.9
TL 4.55 4.13 10.3
Total 10.30 9.58 7.6
Revenue/cwt. LTL 10.08 9.81 2.8
(excluding fuel TL 4.46 4.08 9.2
surcharge) Total 9.08 8.83 2.9
Revenue/shipment LTL 129.62 119.10 8.8
TL 660.71 611.25 8.1
Total 138.35 126.61 9.3
Pounds/shipment LTL 1,123 1,113 0.9
TL 14,513 14,815 (2.0)
Total 1,343 1,322 1.6
Fourth Quarter
-------------------
Amount/Workday
------------------- %
2005 2004 Change
------------------- ----------
Workdays 61 61
F/S Revenue LTL 3,058.1 2,515.4 21.6
TL 260.6 200.1 30.2
Total 3,318.7 2,715.5 22.2
Revenue excluding LTL 3,050.7 2,508.5 21.6
revenue recognition TL 259.9 199.6 30.2
adjustment Total 3,310.6 2,708.1 22.2
Tonnage LTL 13.21 11.72 12.7
TL 2.85 2.42 18.0
Total 16.06 14.14 13.6
Shipments LTL 23.54 21.06 11.7
TL 0.39 0.33 20.5
Total 23.93 21.39 11.9
Revenue/cwt. LTL
TL
Total
Revenue/cwt. LTL
(excluding fuel TL
surcharge) Total
Revenue/shipment LTL
TL
Total
Pounds/shipment LTL
TL
Total
(a) - Integration charges of $2.1 million incurred in the first half
of 2004 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. A $7.0 million gain was recognized on the
sale of real estate in 4Q05. Management believes that excluding these
charges and the real estate gain more accurately reflects the core
operating performance of Saia.
Jevic Transportation, Inc.
Financial Information
For the Quarter and Year Ended December 31, 2005 and 2004
(Amounts in thousands)
Fourth Quarter Year Ended
--------------- % ---------------- %
2005 2004 Change 2005 2004 Change
-------------- ------ ---------------- ------
Operating revenue
(excluding fuel
surcharge) 76,113 79,404 (4.1) 309,779 316,722 (2.2)
Operating revenue 87,161 86,291 1.0 345,272 336,896 2.5
Operating income 666 586 3,127 8,886
Actuarial workers'
compensation charge(a) - 3,800 - 4,400
Operating ratio 99.2 99.3 99.1 97.4
Operating ratio excluding
actuarial charge(a) 99.2 94.9 99.1 96.1
Fourth Quarter
--------------- %
2005 2004 Change
-------------- ------
Workdays
F/S Revenue LTL 54,436 55,525 (2.0)
TL 30,190 27,520 9.7
Other 2,535 3,246 (21.9)
Total 87,161 86,291 1.0
Revenue excluding LTL 54,121 55,364 (2.2)
revenue recognition TL 30,016 27,440 9.4
adjustment Other 2,535 3,246 (21.9)
Total 86,672 86,050 0.7
Tonnage LTL 242 257 (5.5)
TL 301 300 0.4
Total 543 557 (2.3)
Shipments LTL 199 217 (8.0)
TL 35 35 0.7
Total 234 252 (6.8)
Revenue/cwt. LTL 11.16 10.79 3.5
TL 4.99 4.58 9.0
Total 7.74 7.44 4.0
Revenue/cwt. LTL 9.70 9.89 (2.0)
(excl. fuel TL 4.33 4.19 3.2
surcharge) Total 6.72 6.82 (1.4)
Revenue/shipment LTL 271.40 255.34 6.3
TL 848.10 780.72 8.6
Total 358.32 328.62 9.0
Pounds/shipment LTL 2,431 2,367 2.7
TL 17,012 17,065 (0.3)
Total 4,641 4,421 5.0
Fourth Quarter
-----------------
Amount/Workday
----------------- %
2005 2004 Change
---------------- ------
Workdays 61 62
F/S Revenue LTL 892.4 895.6 (0.4)
TL 494.9 443.9 11.5
Other 41.6 52.4 (20.6)
Total 1,428.9 1,391.9 2.7
Revenue excluding LTL 887.2 893.0 (0.6)
revenue recognition TL 492.1 442.6 11.2
adjustment Other 41.6 52.4 (20.6)
Total 1,420.9 1,388.0 2.4
Tonnage LTL 3.97 4.14 (4.0)
TL 4.94 4.84 2.0
Total 8.91 8.98 (0.7)
Shipments LTL 3.27 3.50 (6.5)
TL 0.58 0.57 2.3
Total 3.85 4.07 (5.3)
Revenue/cwt. LTL
TL
Total
Revenue/cwt. LTL
(excl. fuel TL
surcharge) Total
Revenue/shipment LTL
TL
Total
Pounds/shipment LTL
TL
Total
(a) Charges of $3.8 million in 4Q04 and $1.9 million in 3Q04 recorded
to reflect actuarially estimated liability of workers' compensation
claims, of which $4.4 million relates to increases in actuarial
estimates for prior-year claims.
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