Saia, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the SIA Inc. second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you. And I would now like to turn the conference over to Mr. Matt Bate, Executive Vice President and Chief Financial Officer. You may begin.

Thank you, Abby. Good morning, everyone. Welcome to SIA's second quarter 2024 conference call. With me for today's call is SIA's President and Chief Executive Officer, Fritz Holskreis. Before we begin, you should know that during this call, we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our SEC filings for more information on the exact risk factors that could cause actual results to differ. I will now turn the call over to Fritz for some opening comments.

Good morning, and thank you for joining us to discuss SIA's second quarter results. While underlying macro trends remain tepid in our view, our year-over-year results in the second quarter continue to reflect the growth experience since last summer. In the quarter, we averaged approximately 36,400 shipments per day compared to approximately 31,000 per day last year, an increase of 18%. During the quarter, we opened six new terminals and relocated two others. continue to execute our long-term strategy of improving our service and value proposition to the customer. While we're experiencing the impact of cost-related openings, new and relocated terminals, we continue to see the long-term value in our strategy of building density and positioning ourselves to better serve our customers. The opening of our fourth terminal in the Dallas Metroplex helps further build density in the market and strategically position near some of our core customers. We've already seen the positive impact of this new facility as the proximity to key customers has allowed us to provide unique solutions. The quarter was capped by the opening of our new Owatonna, Minnesota terminal, which marked the 200th facility in our network. Relocations are also an important part of the story, as these relocated terminals often offer us multiple benefits, including a more strategic position in the market and added capacity to better serve new and existing customers. During the quarter, we relocated our Laredo, Texas facility which results in a significant upgrade to our capacity and one of the most important freight corridors into the country. I was also pleased to see with these new openings, we've maintained our focus on customer service and each of our key service indicators improved in the core. Our second quarter revenue of $823 million increased from last year's second quarter by 18.5% as a record for any second quarter in our company's history. Yield or revenue per hundredweight, excluding fuel surcharge, increased 8.7%, reflecting a constructive pricing backdrop and the impact of changes in our mix of business. Revenue per shipment, excluding fuel surcharge, increased 1%, despite a headwind from weight per shipment, which was down 7.1% in the quarter, and length of haul, which was also down modestly. Operating income of $137.6 million was 14.4% above 2023. Our second quarter operating ratio of 83.3 deteriorated 60 basis points from last year's 82.7. The results were impacted by the following. Post last summer's industry disruption, we've described the ongoing changes in freight mix and patterns as we see the market adjust to absorb this disruption. Q2 is typically the industry's strongest quarter and the first peak quarter since last summer's events. Over the last 12-month period, we've focused on successfully building our network, As we review our growth today, we see proportionally more national account and retail-related freight with a shorter length of haul in one- and two-day markets. These customers value our emerging network and consistent high service levels. However, the freight characteristics are notably different than we have traditionally seen. We've seen this profile of freight seasonally increase from Q1 to a larger relative proportion of our business compared to our historical mix. At the same time, we did not see the same seasonal increase in our traditional industrial freight. We estimate that this mixed impact created a margin headwind for the quarter of roughly 150 to 200 basis points compared to last year. The margin headwinds created by the characteristic of the onboarded freight only further emphasize our pricing initiative and mixed management focus as seen in our contractual renewals, which remains strong at 8.4%. We're very pleased with the progress of our new terminal openings. Customer acceptance has been high, and we've seen early success in all our new facilities. However, as we've discussed previously, new terminals are investments that require extensive recruiting, onboarding, and training to achieve success. The new facilities that we've opened in the last three years collectively operated at approximately 95 OR and have been impacted by the mix of business trends that we've seen for our overall portfolio. The terminals opened in quarter two operated the loss in total, but much like the facilities that we've opened two and three years ago, we expect to see continued progress in the overall performance. While our expectations for these facilities was for them to be neutral in the period, our increased investments in onboarding and training led to these facilities being at a headwind in the quarter. However, the value of the expanding network can really be seen in the terminals that have been open longer than three years, as they operated at roughly 82.2 OR in the second quarter despite the unfavorable mix of business. While incurring costs ahead of terminal openings and subsequent revenue generations is typical, we have doubled down on our efforts to enhance our customer value proposition. We have enhanced the training requirements for our team members in both new and legacy terminals, which is critical to building the SCIA culture in each market. In total, this investment in new facilities less than three years old created roughly 130 basis point headwind for the quarter compared to last year. Our teams are committed to accomplishing our growth strategy with an eye on always putting the customer first. Our customer first initiatives have been the cornerstone of our success over the last several years, and we saw that focus at the forefront of the new openings and relocations during the second quarter. I'll now turn the call over to Matt for more details about our second quarter results.