Saia, Inc. Q1 2008 Earnings Call Transcript

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2008-04-25 11:43:07.0

Tags: Saia Inc.

Question-and-Answer Session

Operator

(Operator instructions) Your first question comes from the line of David Ross.

David Ross – Stifel Nicolaus

Rick and Renee.

Rick O'Dell

Good morning David.

David Ross – Stifel Nicolaus

First question on the Xtreme Guarantee product, actually. You said you're doing a nice job of growing revenue with that product, but is it coming at a cost that at sometimes those guarantee program lose money occasionally? Didn't know where the margin was on your Xtreme Guarantee business versus a regular business.

Rick O'Dell

Actually, that's the smaller customer segment that tends to have higher yield characteristics as well as some profitability characteristics.

David Ross – Stifel Nicolaus

Okay. And on yield, in the quarter, what was length of haul this year versus last year?

Jim Darby

Length of haul was up about 7.5% year-over-year.

David Ross – Stifel Nicolaus

Okay. And then a lot those synergy revenues you talked about some of that in connection to Madison? How much, I guess, is the customer losses you saw? I think at the connection company impacted your first quarter tonnage comparison? It wasn't, kind of, a legacy connection business not really what it was a year ago?

Rick O'Dell

Yes, actually, I don't have the specific tonnage associated with that, but I guess from a revenue basis, over that time period again, we talked about part of it was obviously the pricing environment, some of those accounts due to some pricing activities in the market up there that we walked away from. Over that time period, we were probably down about 40% of their legacy business.

David Ross – Stifel Nicolaus

Okay. And you should lap that in the second quarter mostly?

Jim Darby

That's correct. After second quarter, our comps get easier.

David Ross – Stifel Nicolaus

Okay. And then, can you talk a little bit about the debt to cap? You said that you drew down the remaining availability before the end of March. I didn't quite catch for the term. I guess the facility going forward a little higher borrowing cost. What exactly was going on there?

Jim Darby

We drew down the last of our shelf agreement with Prudential, which was $25 million. You will recall we talked about earlier that we expanded our revolver going forward as well to give us increased flexibility from $110 million to $160 million, but we expect that with what we have done drawing down Prudential that our actual interest rate will be about 0.25% less than it was a year ago.

 

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