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Daseke Reports Record Revenue, Adjusted EBITDA and Net Income for the Fourth Quarter and Full Year 2017

March 16, 2018

ADDISON, Texas, March 16, 2018 (GLOBE NEWSWIRE) -- Daseke, Inc. (NASDAQ:DSKE) (NASDAQ:DSKEW), a leading consolidator and the largest owner of flatbed and specialized transportation and logistics solutions in North America, today reported financial results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter 2017 Highlights vs. Same Year-Ago Quarter (where applicable)

  • Revenue increased 71% to $257.2 million.
  • Net income was $38.8 million, or $0.82 per share, compared to a net loss of $10.8 million, or $(0.57) per share.
  • Adjusted EBITDA increased 51% to $23.1 million.
  • Acquired three top-tier flatbed and specialized carriers of scale.

Full Year 2017 Highlights vs. 2016 (where applicable)

  • Total revenue increased 30% to $846.3 million.
  • Net income was $27.0 million, or $0.59 per share, compared to a net loss of $12.3 million, or $(0.81) per share.
  • Adjusted EBITDA increased 4% to $91.9 million.
  • Acquired seven companies of scale, nearly doubling Daseke’s size on an acquisition-adjusted revenue basis.

             
Management Commentary

“2017 was a rewarding and successful year in the execution of our long-term strategy to build the premier flatbed and specialized logistics provider,” said Don Daseke, chairman, president and CEO. “Daseke’s two core principles are investing in great people and building an organization of scale. To that end, 2017 was right on track. We completed seven acquisitions of scale that brought on many highly talented employees and nearly doubled the size of our company on an acquisition-adjusted basis to $1.3 billion."

“Acquisitions remain a key tenet of our growth strategy,” continued Daseke, “and in 2018 we will focus on three areas. First, we will look at specific market niches where we would expect to generate higher margins, such as our entrance into the high-security cargo market in 2017. Second, we will seek small, highly accretive tuck-in acquisitions that benefit from our scalable platform. Finally, we will continue our general stated strategy of flatbed and specialized transactions, but with a sharper focus on organic growth once integrated."

Fourth Quarter 2017 Financial Results

Revenue in the fourth quarter of 2017 increased 71% to $257.2 million compared to $150.4 million in the year-ago quarter. The increase was driven by the acquisition of seven operating companies of scale during 2017. Excluding the acquisitions, revenues increased 14% due to an increase in rates.

Net income in the fourth quarter of 2017 improved to $38.8 million, or $0.82 per share, compared to a net loss of $10.8 million, or $(0.57) per share, in the fourth quarter of 2016. Net income in the fourth quarter of 2017 included a $46.0 million tax benefit as a result of the December 2017 Tax Cuts and Jobs Act.

Adjusted EBITDA (a non-GAAP term defined below) increased 51% to $23.1 million compared to $15.3 million in the fourth quarter of 2016. Both the increase in net income and Adjusted EBITDA was driven by the aforementioned acquisitions.

Full Year 2017 Financial Results

Revenues in 2017 increased 30% to $846.3 million compared to $651.8 million in 2016 due to the aforementioned acquisitions. Excluding the acquisitions, revenues increased 6% due to higher rates and higher fuel prices, which increased fuel surcharge revenue.

Net income in 2017 improved to $27.0 million, or $0.59 per share, compared to a net loss of $12.3 million, or $(0.81) per share, in 2016. Net income in 2017 included the $46.0 million tax benefit.

Adjusted EBITDA increased 4% to $91.9 million compared to $88.2 million in 2016. Both the increase in net income and Adjusted EBITDA was due to the seven acquisitions of scale completed in 2017.

Segment Results

Flatbed Solutions - Flatbed Solutions revenue in the fourth quarter of 2017 increased 37% to $100.3 million compared to $73.3 million in the year-ago quarter. This was driven by an 11% increase in flatbed rate per mile and 7% growth in revenue per truck. On December 1, 2017, Daseke closed the acquisition of TSH & Co., its only acquisition in the Flatbed Solutions segment during 2017. Operating income was $3.5 million, up 119% from $1.6 million in the fourth quarter of 2016.

In 2017, Flatbed Solutions revenue increased 14% to $354.1 million compared to $310.4 million in 2016. The increase was driven by an 11.3% increase in flatbed rate per mile and 4.9% growth in revenue per truck. Operating income in 2017 increased 18% to $18.5 million compared to $15.6 million in 2016.

Specialized Solutions - Specialized Solutions revenue in the fourth quarter of 2017 increased 102% to $158.8 million compared to $78.3 million in the year-ago quarter. The increase was driven by a slight increase in specialized rate per mile and 5% growth in revenue per truck. In addition, the company closed two acquisitions (Moore Freight Services and Roadmaster Group) in the Specialized Solutions segment during the fourth quarter of 2017. Operating income was $2.6 million, up 63% from $1.6 million in the fourth quarter of 2016.

In 2017, Specialized Solutions revenue increased 44% to $499.1 million compared to $346.0 million in 2016. The increase was driven by six acquisitions of scale (Moore Freight Services, Roadmaster Group, R&R Trucking Holdings, The Steelman Companies, Schilli Transportation Services and Big Freight Systems) in the Specialized Solutions segment during 2017. Operating income in 2017 decreased 6% to $15.3 million compared to $16.3 million in 2016.

2018 Outlook

In 2018, Daseke expects to grow revenue on an organic basis to approximately $1.35 billion compared to $846.3 million in 2017. The company expects to grow organic Adjusted EBITDA to approximately $150 million compared to $91.6 million in 2017. Capital expenditures in 2018 are expected to range between $85-$105 million, which includes $20-$40 million in growth capital expenditures, compared to $19.8 million in total capital expenditures in 2017. The details of the increase will be discussed on today's call.

Conference Call

Daseke will hold a conference call today at 11:00 a.m. Eastern time to discuss its fourth quarter and full year 2017 results.

Date: Friday, March 16, 2018
Time: 11:00 a.m. Eastern time (10:00 a.m. Central time)
Toll-free dial-in number: 1-855-242-9918
International dial-in number: 1-414-238-9803
Conference ID: 5679584

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 1-949-574-3860.

The conference call will be broadcast live and available for replay via the investor relations section of the company’s website at investor.daseke.com.

A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through March 30, 2018.

Toll-free replay number: 1-855-859-2056
International replay number: 1-404-537-3406
Replay ID: 5679584

About Daseke, Inc.

Daseke is a leading consolidator and the largest owner of flatbed and specialized transportation solutions in North America. Daseke offers comprehensive, best-in-class services to some of the world’s most respected industrial shippers through its experienced people, more than 5,200 trucks, more than 11,000 flatbed and specialized trailers, and a million-plus square feet of industrial warehousing space. For more information, please visit www.daseke.com.

Use of Non-GAAP Measures

This news release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDAR, Acquisition Adjusted, free cash flow and adjusted operating ratio. Other companies in Daseke’s industry may define these non-GAAP measures differently than Daseke does, and as a result, it may be difficult to use these non-GAAP measures to compare the performance of those companies to Daseke’s performance. Daseke’s management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP and instead relies primarily on Daseke’s GAAP results and uses non-GAAP measures supplementally.

Daseke defines Adjusted EBITDA as net income (loss) plus (i) depreciation and amortization, (ii) interest expense, including other fees and charges associated with indebtedness, net of interest income, (iii) income taxes, (iv) acquisition-related transaction expenses (including due diligence costs, legal, accounting and other advisory fees and costs, retention and severance payments and financing fees and expenses), (v) stock-based compensation, (vi) non-cash impairments, (vii) losses (gains) on sales of defective revenue equipment out of the normal replacement cycle, (viii) impairments related to defective revenue equipment sold out of the normal replacement cycle, (ix) withdrawn initial public offering-related expenses, (x) non-cash stock and equity-compensation expense, and (xi) expenses related to the business combination that was consummated in February 2017 and related transactions. Daseke defines Adjusted EBITDAR as Adjusted EBITDA plus tractor operating lease charges, and free cash flow as Adjusted EBITDA less net capital expenditures (capital expenditures less proceeds from equipment sales).  Daseke defines Acquistion Adjusted as revenue (giving effect to acquisitions during 2017) calculated by adding Daseke’s 2017 revenue and the revenue of each company acquired in 2017 for the period beginning January 1, 2017 and ending on its acquisition date, based on the company’s internal financial statements for the period prior to Daseke’s acquisition.

Daseke’s board of directors and executive management team use Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted as key measures of its performance and for business planning. Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted assist them in comparing Daseke’s operating performance over various reporting periods on a consistent basis because they remove from Daseke’s operating results the impact of items that, in their opinion, do not reflect Daseke’s core operating performance. Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted also allows Daseke to more effectively evaluate its operating performance by allowing it to compare the results of operations against its peers without regard to its or its peers’ financing method or capital structure.

Adjusted EBITDAR is used to view operating results before lease charges as these charges can vary widely among trucking companies due to differences in the way that trucking companies finance their fleet acquisitions. Daseke’s method of computing Adjusted EBITDA is substantially consistent with that used in its debt covenants and also is routinely reviewed by its management for that purpose.

Daseke believes its presentation of Adjusted EBITDA, Adjusted EBITDAR and Acquistion Adjusted is useful because they provide investors and industry analysts the same information that Daseke uses internally for purposes of assessing its core operating performance. However, Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted are not substitutes for, or more meaningful than, net income (loss), cash flows from operating activities, operating income or any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as Adjusted EBITDA, Adjusted EBITDAR and Acquistion Adjusted. Certain items excluded from Adjusted EBITDA, Adjusted EBITDAR and Acquistion Adjusted are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital, tax structure and the historic costs of depreciable assets. Adjusted EBITDA, Adjusted EBITDAR and Acquistion Adjusted should not be considered measures of the income generated by Daseke’s business or discretionary cash available to it to invest in the growth of its business.

Daseke’s board of directors and executive management team use free cash flow to assess the company’s performance and ability to fund operations and make additional investments. Free cash flow represents the cash that its business generates from operations, before taking into account cash movements that are nonoperational. Daseke believes its presentation of free cash flow is useful because it is one of several indicators of Daseke’s ability to service debt, make investments and/or return capital to its stockholders. Daseke also believes that free cash flow is one of several benchmarks used by investors and industry analysts for comparison of performance in its industry, although Daseke’s measure of free cash flow may not be directly comparable to similar measures reported by other companies. Furthermore, free cash flow is not a substitute for, or more meaningful than, net income (loss), cash flows from operating activities, operating income or any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as free cash flow. Accordingly, free cash flow should not be considered a measure of the income generated by Daseke’s business or discretionary cash available to it to invest in the growth of its business.

Daseke defines adjusted operating ratio as (a) total operating expenses (i) less fuel surcharges, acquisition related transaction expenses, non-cash impairment charges and withdrawn initial public offering-related expenses and (ii) further adjusted for the net impact of the step-up in basis resulting from acquisitions (such as increased depreciation and amortization expense), as a percentage of (b) total revenue excluding fuel surcharge revenue.

Daseke’s board of directors and executive management team view adjusted operating ratio, and its key drivers of revenue quality, growth, expense control and operating efficiency, as a very important measure of Daseke’s performance. Daseke believes fuel surcharge is often volatile and eliminating the impact of this source of revenue (by eliminating fuel surcharge from revenue and by netting fuel surcharge against fuel expense) affords a more consistent basis for comparing its results of operations between periods. Daseke also believes excluding acquisition-related transaction expenses, additional depreciation and amortization expenses as a result of acquisitions, non-cash impairments and withdrawn initial public offering-related expenses enhances the comparability of its performance between periods.

Daseke believes its presentation of adjusted operating ratio is useful because it provides investors and industry analysts the same information that Daseke uses internally for purposes of assessing its core operating profitability. However, adjusted operating ratio is not a substitute for, or more meaningful than, operating ratio, operating margin or any other measure derived solely from GAAP measures, and there are limitations to using non-GAAP measures such as adjusted operating ratio. You can find the reconciliation of these non-GAAP measures to the nearest comparable GAAP measures in the Reconciliation of Non-GAAP Measures tables below. We have not reconciled non-GAAP forward looking measures to their corresponding GAAP measures because certain items that impact these measures are unavailable or cannot be reasonably predicted without unreasonable efforts.

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” “will” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements are based on current information and expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to, general economic risks (such as downturns in customers’ business cycles and disruptions in capital and credit markets), driver shortages and increases in driver compensation or owner-operator contracted rates, loss of senior management or key operating personnel, our ability to recognize the anticipated benefits of recent acquisitions, our ability to identify and execute future acquisitions successfully, seasonality and the impact of weather and other catastrophic events, fluctuations in the price or availability of diesel fuel, increased prices for, or decreases in the availability of, new revenue equipment and decreases in the value of used revenue equipment, our ability to generate sufficient cash to service all of our indebtedness, restrictions in our existing and future debt agreements, increases in interest rates, the impact of governmental regulations and other governmental actions related to the company and its operations, litigation and governmental proceedings, and insurance and claims expenses. For additional information regarding known material factors that could cause our actual results to differ from those expressed in forward-looking statements, please see our filings with the Securities and Exchange Commission (the “SEC”), available at www.sec.gov, including Hennessy Capital Acquisition Corp. II’s definitive proxy statement dated February 6, 2017, particularly the section “Risk Factors—Risk Factors Relating to Daseke’s Business and Industry,” and Daseke’s Current Report on Form 8-K/A, filed with the SEC on March 16, 2017, and amended on May 4, 2017.

Investor Relations:

Liolios Group
Cody Slach or Sean Mansouri
Tel 1-949-574-3860
DSKE@liolios.com


 
Daseke, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share data)
       
  December 31, December 31,
  2017 2016 
ASSETS      
Current assets:      
Cash and cash equivalents $  90,679 $  3,695 
Accounts receivable, net    127,368    54,177 
Drivers’ advances and other receivables    4,792    2,632 
Current portion of net investment in sales-type leases    10,979    3,516 
Parts supplies    4,653    1,467 
Income tax receivable    91    719 
Prepaid and other current assets    28,149    13,504 
Total current assets    266,711    79,710 
Property and equipment, net    429,639    318,747 
Intangible assets, net    93,120    71,653 
Goodwill    302,702    89,035 
Other long-term assets    33,496    11,090 
Total assets $  1,125,668 $  570,235 
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $  12,488 $  5,954 
Accrued expenses and other liabilities    25,876    16,104 
Accrued payroll, benefits and related taxes    14,004    7,835 
Accrued insurance and claims    12,644    9,840 
Current portion of long-term debt    43,056    52,665 
Total current liabilities    108,068    92,398 
Line of credit    4,561    6,858 
Long-term debt, net of current portion    569,740    208,372 
Deferred tax liabilities    90,434    92,815 
Other long-term liabilities    1,632    286 
Subordinated debt    —    66,443 
Total liabilities    774,435    467,172 
Commitments and contingencies (Note 17)      
Stockholders’ equity:      
Series A convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized;  650,000 shares issued with liquidation preference of $65,000 at December 31, 2017    65,000    — 
Series B convertible preferred stock, $0.01 par value; 75,000 shares authorized; 64,500 shares issued and outstanding at December 31, 2016    —    1 
Common stock (par value $0.0001 per share); 250,000,000 shares authorized, 48,712,288 and 20,980,961 shares issued and outstanding at December 31, 2017 and 2016, respectively    5    2 
Additional paid-in-capital    277,931    117,806 
Retained earnings (accumulated deficit)    7,338    (14,694)
Accumulated other comprehensive income (loss)    959    (52)
Total stockholders’ equity    351,233    103,063 
Total liabilities and stockholders’ equity $  1,125,668 $  570,235 
       

 

 
Daseke, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(In thousands, except share and per share data)
            
 Quarters Ended December 31,  Years Ended December 31, 
 2017  2016  2017  2016 
Revenues:           
Freight$  186,310  $  119,395  $  632,764  $  517,861 
Brokerage   37,220     19,051     120,943     87,410 
Logistics   11,503     —     22,074     — 
Fuel surcharge   22,192     11,970     70,523     46,531 
Total revenue   257,225     150,416     846,304     651,802 
Operating expenses:           
Salaries, wages and employee benefits   76,734     47,929     249,996     197,789 
Fuel   29,326     17,789     93,749     66,865 
Operations and maintenance   31,067     23,167     118,390     96,100 
Communications   653     410     2,145     1,618 
Purchased freight   76,310     33,553     225,254     154,054 
Administrative expenses   9,214     7,539     33,233     25,250 
Sales and marketing   539     462     1,965     1,743 
Taxes and licenses   3,200     2,276     11,055     9,222 
Insurance and claims   8,446     5,466     23,962     19,114 
Acquisition-related transaction expenses   1,122     7     3,377     25 
Depreciation and amortization   23,105     16,985     76,863     67,500 
Gain on disposition of revenue property and equipment   (187)    (273)    (700)    (116)
Impairment   —     810     —     2,005 
Total operating expenses   259,529     156,120     839,289     641,169 
Income from operations   (2,304)    (5,704)    7,015     10,633 
Other expense (income):           
Interest income   (269)    (3)    (398)    (44)
Interest expense   8,492     5,603     29,556     23,124 
Write-off of unamortized deferred financing fees   —     —     3,883     — 
Other   (492)    (66)    (740)    (331)
Total other expense   7,731     5,534     32,301     22,749 
Income (loss) before provision (benefit) for income taxes   (10,035)    (11,238)    (25,286)    (12,116)
Provision (benefit) for income taxes   (48,834)    (445)    (52,282)    163 
Net income (loss)   38,799     (10,793)    26,996     (12,279)
Other comprehensive income:           
Unrealized income on interest rate swaps   —     63     52     62 
Foreign currency translation adjustments, net of $517 tax expense   452     —     959     — 
Comprehensive income (loss)   39,251     (10,730)    28,007     (12,217)
Net income (loss)   38,799     (10,793)    26,996     (12,279)
Less dividends to Series A convertible preferred stockholders   (1,240)    —     (4,158)    — 
Less dividends to Series B convertible preferred stockholders   —     (1,041)    (806)    (4,770)
Net income (loss) attributable to common stockholders$  37,559  $  (11,834) $  22,032  $  (17,049)
Net income (loss) per common share:           
Basic$  0.82  $  (0.57) $  0.59  $  (0.81)
Diluted$  0.62  $  (0.57) $  0.56  $  (0.81)
Weighted-average common shares outstanding:           
Basic   45,906,251     20,980,961     37,592,549     20,980,961 
Diluted   60,987,112     20,980,961     39,593,701     20,980,961 
Dividends declared per Series A convertible preferred share$  1.91  $  —  $  6.40  $  — 
Dividends declared per Series B convertible preferred share$  —  $  18.75  $  12.50  $  18.75 
            

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Flatbed Solutions
(Unaudited)
                
  Quarters Ended December 31,      
  2017 2016 Increase (Decrease)
(Dollars in thousands) $ % $ % $ %
                
REVENUE(1):               
Freight $  75,922    75.7 $  58,969    80.5 $  16,953    28.7 
Brokerage    12,903    12.9    7,263    9.9    5,640    77.7 
Logistics    192    0.2    —   *     192   *  
Fuel surcharge    11,295    11.3    7,039    9.6    4,256    60.5 
Total revenue    100,312    100.0    73,271    100.0    27,041    36.9 
                
OPERATING EXPENSES(1):               
Total operating expenses    96,807    96.5    71,669    97.8    25,138    35.1 
Operating ratio  96.5%    97.8%       
Adjusted operating rati  95.8%    97.1%       
INCOME FROM OPERATIONS $  3,505    3.5 $  1,602    2.2 $  1,903    118.8 
                
OPERATING STATISTICS:               
Total miles    40,637,705       35,169,265       5,468,440    15.5 
Company-operated tractors, as of year-end    1,155       1,203       (48)   (4.0)
Owner-operated tractors, as of year-end    1,392       390       1,002    256.9 
Number of trailers, as of year-end    4,573       2,943       1,630    55.4 
                
Company-operated tractors, average for the year    1,149       1,209       (60)   (5.0)
Owner-operated tractors, average for the year    778       396       382    96.5 
                
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Flatbed Solutions
(Unaudited)
                
  Years Ended December 31,      
  2017 2016 Increase (Decrease)
(Dollars in thousands) $ % $ % $ %
                
REVENUE(1):               
Freight $  276,592    78.1 $  253,824    81.8 $  22,768    9.0 
Brokerage    40,882    11.5    29,745    9.6    11,137    37.4 
Logistics    192    0.1    —   *     192   *  
Fuel surcharge    36,440    10.3    26,871    8.7    9,569    35.6 
Total revenue    354,106    100.0    310,440    100.0    43,666    14.1 
                
OPERATING EXPENSES(1):               
Total operating expenses    335,645    94.8    294,797    95.0    40,848    13.9 
Operating ratio  94.8%    95.0%       
Adjusted operating ratio  93.8%    93.4%       
INCOME FROM OPERATIONS $  18,461    5.2 $  15,643    5.0 $  2,818    18.0 
                
OPERATING STATISTICS:               
Total miles    152,956,123       149,284,755       3,671,368    2.5 
Company-operated tractors, as of year-end    1,155       1,203       (48)   (4.0)
Owner-operated tractors, as of year-end    1,392       390       1,002    256.9 
Number of trailers, as of year-end    4,573       2,943       1,630    55.4 
                
Company-operated tractors, average for the year    1,156       1,182       (26)   (2.2)
Owner-operated tractors, average for the year    535       430       105    24.4 
                
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Specialized Solutions
(Unaudited)
                
  Quarters Ended December 31,      
  2017 2016 Increase (Decrease)
(Dollars in thousands) $ % $ % $ %
                
REVENUE(1):               
Freight $  112,024    70.5 $  61,480    78.5 $  50,544   82.2
Brokerage    24,405    15.4    11,805    15.1    12,600   106.7
Logistics    11,323    7.1    —   *     11,323  * 
Fuel surcharge    11,094    7.0    5,062    6.5    6,032   119.2
Total revenue    158,846    100.0    78,347    100.0    80,499   102.7
                
OPERATING EXPENSES(1):               
Total operating expenses    156,256    98.4    76,758    98.0    79,498   103.6
Operating ratio  98.4%    98.0%       
Adjusted operating ratio  97.5%    96.6%       
INCOME FROM OPERATIONS $  2,590    1.6 $  1,589    2.0 $  1,001   63.0
                
OPERATING STATISTICS:               
Total miles    42,825,390       23,431,447       19,393,943   82.8
Company-operated tractors, as of year-end    2,063       1,101       962   87.4
Owner-operated tractors, as of year-end    664       219       445   203.2
Number of trailers, as of year-end    6,664       3,404       3,260   95.8
                
Company-operated tractors, average for the year    1,828       1,117       711   63.7
Owner-operated tractors, average for the year    525       223       302   135.4
                
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Specialized Solutions
(Unaudited)
                
  Years Ended December 31,      
  2017 2016 Increase (Decrease)
(Dollars in thousands) $ % $ % $ %
                
REVENUE(1):               
Freight $  362,277    72.6 $  268,121    77.5 $  94,156    35.1 
Brokerage    80,225    16.1    57,791    16.7    22,434    38.8 
Logistics    21,940    4.4    —   *     21,940   * 
Fuel surcharge    34,690    7.0    20,086    5.8    14,604    72.7 
Total revenue    499,132    100.0    345,998    100.0    153,134    44.3 
                
OPERATING EXPENSES(1):               
Total operating expenses    483,787    96.9    329,720    95.3    154,067    46.7 
Operating ratio  96.9%    95.3%       
Adjusted operating ratio(2)  95.1%    93.4%       
INCOME FROM OPERATIONS $  15,345    3.1 $  16,278    4.7 $  (933)   (5.7)
                
OPERATING STATISTICS:               
Total miles    137,793,272       97,704,619       40,088,653    41.0 
Company-operated tractors, as of year-end    2,063       1,101       962    87.4 
Owner-operated tractors, as of year-end    664       219       445    203.2 
Number of trailers, as of year-end    6,664       3,404       3,260    95.8 
                
Company-operated tractors, average for the year    1,488       1,097       391    35.6 
Owner-operated tractors, average for the year    353       236       117    49.6 
                
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

Daseke, Inc. and Subsidiaries 
Reconciliation of Non-GAAP Measures 
(Unaudited) 
(In thousands) 
              
  Quarter Ended December 31,  Year Ended December 31,  
  2017  2016  2017  2016  
              
Net income (loss) $  38,799  $  (10,793) $  26,996  $  (12,279) 
Depreciation and amortization    23,105     16,985     76,863     67,500  
Interest income    (269)    (4)    (398)    (44) 
Interest expense    8,492     5,603     29,556     23,124  
Write-off of unamortized deferred financing fees    —     —     3,883     —  
Income tax provision (benefit)    (48,834)    (445)    (52,282)    163  
Acquisition-related transaction expenses    1,122     7     3,377     296  
Impairment    —     810     —     2,005  
Stock-based compensation expense    674     —     1,875     —  
Withdrawn initial public offering-related expenses    —     1     —     3,051  
Net losses on sales of defective revenue equipment out of the normal replacement cycle    —     —     —     718  
Impairment on sales of defective revenue equipment out of the normal replacement cycle    —     —     —     190  
Expenses related to the Business Combination and related transactions    —     3,172     2,034     3,516  
Tractor operating lease charges    4,499     3,613     16,865     12,937  
Adjusted EBITDAR $  27,588  $  18,949  $  108,769  $  101,177  
Less tractor operating lease charges    (4,499)    (3,613)    (16,865)    (12,937) 
Adjusted EBITDA $  23,089  $  15,336  $  91,904  $  88,240  
Net capital expenditures     (11,994)    (433)    (35,916)    (31,669) 
Free cash flow $  11,095  $  14,903  $  55,988  $  56,571  
              

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Operating Ratio to Adjusted Operating Ratio by Segment: Flatbed
(Unaudited)
 
             
  Quarter Ended December 31,  Year Ended December 31, 
(Dollars in thousands) 2017  2016
 2017
 2016 
             
Total revenue(1) $  100,312  $  73,271  $  354,106  $  310,440 
Fuel surcharge    11,295     7,039     36,440     26,871 
Operating revenue, net of fuel surcharge $  89,017  $  66,232  $  317,666  $  283,569 
             
Total operating expenses(1) $  96,806  $  71,669  $  335,645  $  294,797 
Fuel surcharge    11,295     7,039     36,440     26,871 
Net impact of step-up in basis of acquired assets    203     334     1,091     3,169 
Adjusted operating expenses $  85,308  $  64,296  $  298,114  $  264,757 
             
Operating ratio  96.5%  97.8%  94.8%  95.0%
Adjusted operating ratio  95.8%  97.1%  93.8%  93.4%
             
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
             

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Operating Ratio to Adjusted Operating Ratio by Segment: Specialized
(Unaudited)
 
             
  Quarter Ended December 31,  Year Ended December 31, 
(Dollars in thousands) 2017  2016
 2017
 2016
             
Total revenue(1) $  158,846  $  78,347  $  499,132  $  345,998 
Fuel surcharge    11,094     5,062     34,690     20,086 
Operating revenue, net of fuel surcharge $  147,752  $  73,285  $  464,442  $  325,912 
             
Total operating expenses(1) $  156,254  $  76,758  $  483,787  $  329,720 
Fuel surcharge    11,094     5,062     34,690     20,086 
Impairment    —     810     —     2,005 
Net impact of step-up in basis of acquired assets    1,065     93     7,265     3,169 
Adjusted operating expenses $  144,095  $  70,793  $  441,832  $  304,460 
             
Operating ratio  98.4%  98.0%  96.9%  95.3%
Adjusted operating ratio  97.5%  96.6%  95.1%  93.4%
             
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
             

 

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Investor Contacts

Alpha IR Group

Joe Caminiti or Brooks Hamilton

312-445-2870 DSKE@alpha-ir.com
Daseke Headquarters

15455 Dallas Parkway, Ste 550
Addison, TX 75001