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Daseke Reports Record Third Quarter 2018 Results

November 6, 2018

ADDISON, Texas, Nov. 06, 2018 (GLOBE NEWSWIRE) -- Daseke, Inc. (NASDAQ: DSKE) (NASDAQ: DSKEW), the largest flatbed, specialized transportation and logistics solutions company in North America, today reported financial results for the third quarter ended September 30, 2018.

Third Quarter 2018 Highlights vs. Same Year-Ago Quarter

  • Revenue increased 99% to a record $461.6 million. This represents the fourth consecutive quarter that year-over-year revenue growth has exceeded 70%.
  • Flatbed Solutions revenue up 112% to $181.5 million; Specialized Solutions revenue up 92% to $283.9 million1.
  • Revenue up 18% excluding acquisitions.
  • Net income improved significantly to $2.2 million, or $0.01 per share, compared to $0.1 million, or $0.0 per share ($0.03 net loss per share attributable to common stockholders).
  • Adjusted EBITDA2 increased 96% to a $52.8 million (Acquisition Adjusted3 EBITDA up 18%). This represents the fourth consecutive quarter that year-over-year Adjusted EBITDA growth has exceeded 50%. Both Flatbed Solutions and Specialized Solutions realized third quarter Adjusted EBITDA growth of 78% and 101%, respectively.

Management Commentary

“We reported another record quarter with significant expansion in revenue and profitability,” said Don Daseke, chairman and CEO. “Our operating companies continued to perform in a robust rate and high-demand market environment that we expect to continue based upon strong demand from our blue-chip customer base. As important, our strategic growth plan is producing the intended results as we reported an 18% increase in Acquisition Adjusted EBITDA. In fact, this was our third consecutive quarter of double-digit Acquisition Adjusted EBITDA expansion. Driving our results were strong growth in both our flatbed and specialized segments, and continued expansion in rate per mile and revenue per tractor.

“During the quarter, we also made progress on various operational initiatives. On the M&A integration front, we have owned Aveda since June and have already experienced strong growth. During the four months we’ve owned Aveda, revenue and adjusted EBITDA have grown by 23% and 54%, respectively. We have leveraged our significant purchasing power to drive savings in fuel, insurance and employee benefits. Additionally, our operational expertise allowed us to add owner-operators to reduce Aveda’s third-party spend, increasing margins. Builders Transportation has also benefited from Daseke platform synergies and strong market demand, already contributing to our third quarter Adjusted EBITDA in a healthy domestic steel market for our business.

“We also made positive strides on driver retention. Our pilot program in the Pacific Northwest continued to produce the intended results, with 97% seated trucks six months into the program. This is accomplished by implementing a more traditional salary and bonus pay structure. These programs are designed and implemented with the drivers in mind by our stellar teams at our operating divisions, and we applaud them on these early results. Programs like this are why Daseke’s turnover rates are improving while the industry continues to worsen. The tight driver market is really showing Daseke’s strength and competitive advantage.

“Although we are committed to an opportunistic M&A strategy and our pipeline remains robust, we do not anticipate any further transactions for at least several months as we continue to focus on integration and organic growth. Given our performance to date, as well as our outlook, we believe Daseke is very well-positioned to accelerate the organic growth of our operating companies and leverage our scale in 2019 and beyond.”
_________

1 Net of eliminations, Flatbed Solutions revenue was $180.7 million and Specialized Solutions revenue was $280.9 million.
2 See Non-GAAP Measures for more information regarding Adjusted EBITDA measures.
3 See Non-GAAP Measures for more information regarding Acquisition Adjusted EBITDA measures.

Third Quarter 2018 Financial Results

Revenue in the third quarter of 2018 increased 99% to $461.6 million compared to $231.3 million in the year-ago quarter. The increase was primarily driven by the acquisition of seven operating companies of scale since July 2017. Excluding the impact of these acquisitions, revenue increased 18% largely due to an improvement in rates in both the Flatbed and Specialized Solutions segments.

Net income in the third quarter of 2018 improved significantly to $2.2 million, or $0.01 per share, compared to $0.1 million, or $0.0 per share, in the third quarter of 2017 ($0.03 net loss per share attributable to common stockholders). Acquisition Adjusted net income in the third quarter of 2018 was $2.7 million compared to $4.5 million in the third quarter of 2017 due primarily to a $2.2 million income tax benefit in the year-ago quarter.

Adjusted EBITDA increased 96% to $52.8 million compared to $27.0 million in the third quarter of 2017, and Acquisition Adjusted EBITDA increased 18% to $54.0 million. The significant improvements in net income and Adjusted EBITDA were primarily driven by the aforementioned acquisitions and rate improvements.

Segment Results

Flatbed Solutions - Flatbed Solutions revenue in the third quarter of 2018 increased 112% to $181.5 million1 compared to $85.6 million in the year-ago quarter. This was driven by two flatbed acquisitions of scale since December 2017, as well as a 10% increase in flatbed rate per mile and 9% growth in revenue per tractor. Excluding the impact of these acquisitions, rates were up 9% compared to the year-ago quarter. Operating income was $12.2 million, up 157% from $4.8 million in the third quarter of 2017. Adjusted EBITDA increased 78% to $21.7 million compared to $12.2 million in the year-ago quarter.

Specialized Solutions - Specialized Solutions revenue in the third quarter of 2018 increased 92% to $283.9 million1 compared to $147.6 million in the year-ago quarter. The increase was driven by five specialized acquisitions of scale since July 2017, as well as a 31% increase in specialized rate per mile and 24% growth in revenue per tractor. Excluding the impact of acquisitions, rates were up 10% compared to the year-ago quarter. Operating income was $11.8 million, up 65% from $7.2 million in the third quarter of 2017. Adjusted EBITDA increased 101% to $40.5 million compared to $20.1 million in the year-ago quarter.

2018 Outlook

Daseke continues to expect revenue in 2018 to be approximately $1.55 billion compared to $846.3 million in 2017, and Adjusted EBITDA to increase 85% to approximately $170 million compared to $91.9 million in 2017. Net replacement capital expenditures in 2018 are expected to be approximately $85 million, which takes into consideration recently acquired companies.

Conference Call

Daseke will hold a conference call today at 11:00 a.m. Eastern time to discuss its third quarter 2018 results.

Date: Tuesday, November 6, 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: 3688486

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 here and via the investor relations section of Daseke’s website at investor.daseke.com. Presentation materials will be posted at the time of the call at investor.daseke.com as well.

A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through November 20, 2018.

Toll-free replay number: 1-855-859-2056
International replay number: 1-404-537-3406
Replay ID: 3688486

About Daseke, Inc.

Daseke, Inc. is the leading consolidator and the largest flatbed and specialized transportation and logistics company in North America. Daseke offers comprehensive, best-in-class services to many of the world’s most respected industrial shippers through experienced people, a fleet of approximately 6,000 tractors and 13,000 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 for Daseke and its operating segments, including Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted, revenue, net loss and EBITDA (Acquisition Adjusted Measures), 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, and (vii) 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. Daseke defines Acquisition Adjusted as (a) our actual revenue, net loss or Adjusted EBITDA, as applicable, for the applicable measurement period and (b) the actual revenue, net loss or Adjusted EBITDA, as applicable, of each company acquired in 2017 and in 2018 (excluding the Kelsey Trail acquisition), as though those acquisitions were completed on the first date of the applicable measurement period, based on the company’s internal financial statements for the period prior to Daseke’s acquisition. These adjusted amounts (i) have not been prepared in accordance with the requirements of Regulation S‐X or any other securities laws relating to the presentation of pro forma financial information, (ii) do not reflect any pro forma adjustments, (iii) are presented for informational purposes only, (iv) are not necessarily indicative of what our result of operations would have been had such acquisitions been completed as though those acquisitions were completed on the first date of the applicable measurement period, and (v) do not purport to project our future operating results.

Daseke defines Excluded Acquisition as all acquisitions in 2017, excluding (a) all acquisitions after August 31, 2017; however, including (b) Belmont and Kelsey Trail.  Belmont and Kelsey Trails’ operations and financial results have been fully integrated into Smokey Point Distributing and Big Freight Systems, respectively, therefore, they cannot be broken out. 

Daseke defines free cash flow as Adjusted EBITDA less net capital expenditures (capital expenditures less proceeds from equipment sales). Daseke’s board of directors and executive management team use Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted Measures as key measures of its performance and for business planning.

Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted Measures 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 Measures 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.

Daseke believes its presentation of Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted Measures 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 Measures 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 Acquisition Adjusted Measures. Certain items excluded from Adjusted EBITDA, Adjusted EBITDAR and Acquisition Adjusted Measures 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 Acquisition Adjusted Measures 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. Projected financial information, including our guidance outlook, are forward-looking statements.  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 Daseke’s 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 and business 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, Daseke’s ability to recognize the anticipated benefits of recent acquisitions, including the Aveda transaction, its 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, Daseke’s ability to generate sufficient cash to service all of its indebtedness, restrictions in its existing and future debt agreements, increases in interest rates, changes in existing laws or regulations, including environmental and worker health safety laws and regulations and those relating to tax rates or taxes in general, the impact of governmental regulations and other governmental actions related to Daseke 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 Daseke’s filings with the Securities and Exchange Commission, available at www.sec.gov, including Daseke’s Annual Report on Form 10‐K for the year ended December 31, 2017, particularly the section “Risk Factors.”

Investor Relations:

Liolios
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)
           
  September 30,   December 31,
  2018   2017
ASSETS          
Current assets:          
Cash and cash equivalents $ 18,077     $ 90,679
Accounts receivable, net   233,983       127,368
Drivers’ advances and other receivables   6,045       4,792
Current portion of net investment in sales-type leases   15,744       10,979
Parts supplies   5,366       4,653
Prepaid and other current assets   33,458       28,240
Total current assets   312,673       266,711
Property and equipment, net   562,659       429,639
Intangible assets, net   212,009       93,120
Goodwill   274,291       302,702
Other long-term assets   44,902       33,496
Total assets $ 1,406,534     $ 1,125,668
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable $ 25,534     $ 12,488
Accrued expenses and other liabilities   54,370       25,876
Accrued payroll, benefits and related taxes   20,315       14,004
Accrued insurance and claims   14,351       12,644
Current portion of long-term debt   58,407       43,056
Total current liabilities   172,977       108,068
Line of credit   15,664       4,561
Long-term debt, net of current portion   594,360       569,740
Deferred tax liabilities   134,057       90,434
Other long-term liabilities   20,960       1,632
Total liabilities   938,018       774,435
Commitments and contingencies          
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 September 30, 2018 and December 31, 2017   65,000       65,000
Common stock, par value $0.0001 per share; 250,000,000 shares authorized, 64,445,371 and 48,712,288 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively   6       5
Additional paid-in-capital   432,795       277,931
Retained earnings (accumulated deficit)   (29,710 )     7,338
Accumulated other comprehensive income   425       959
Total stockholders’ equity   468,516       351,233
Total liabilities and stockholders’ equity $ 1,406,534     $ 1,125,668
           

 

 
 
Daseke, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(In thousands, except share and per share data)
                       
  Three Months Ended     Nine Months Ended  
  September 30,    September 30, 
  2018
  2017
  2018
  2017
Revenues:                      
Freight $ 329,474     $ 171,245     $ 842,128     $ 446,454  
Brokerage   82,203       34,198       188,432       83,723  
Logistics   11,656       7,871       31,265       10,571  
Fuel surcharge   38,256       18,008       104,244       48,331  
Total revenue   461,589       231,322       1,166,069       589,079  
Operating expenses:                      
Salaries, wages and employee benefits   114,776       64,955       287,735       174,253  
Fuel   38,931       24,734       103,666       64,423  
Operations and maintenance   51,494       35,132       126,427       86,332  
Communications   920       539       2,426       1,491  
Purchased freight   170,548       61,598       429,948       148,945  
Administrative expenses   16,075       8,619       41,290       24,019  
Sales and marketing   1,007       488       2,295       1,425  
Taxes and licenses   4,681       2,963       12,265       7,855  
Insurance and claims   12,738       6,351       32,350       15,516  
Acquisition-related transaction expenses   601       773       2,442       2,255  
Depreciation and amortization   36,800       19,805       93,748       53,758  
Gain on disposition of revenue property and equipment   (899 )     (339 )     (1,545 )     (513 )
Impairment               2,840        
Total operating expenses   447,672       225,618       1,135,887       579,759  
Income from operations   13,917       5,704       30,182       9,320  
Other expense (income):                      
Interest income   (170 )     (76 )     (1,213 )     (130 )
Interest expense   11,839       8,624       33,246       21,064  
Write-off of unamortized deferred financing fees                     3,883  
Other   (603 )     (32 )     (2,462 )     (247 )
Total other expense   11,066       8,516       29,571       24,570  
Income (loss) before provision (benefit) for income taxes   2,851       (2,812 )     611       (15,250 )
Provision (benefit) for income taxes   670       (2,862 )     (14,258 )     (3,448 )
Net income (loss)   2,181       50       14,869       (11,802 )
Other comprehensive income (loss):                      
Unrealized income on interest rate swaps                     52  
Foreign currency translation adjustments, net of tax expense (benefit) of $105, $283, $(146) and $556, respectively   409       526       (534 )     1,032  
Comprehensive income (loss)   2,590       576       14,335       (10,718 )
Net income (loss)   2,181       50       14,869       (11,802 )
Less dividends to Series A convertible preferred stockholders   (1,239 )     (1,225 )     (3,717 )     (2,919 )
Less dividends to Series B convertible preferred stockholders                     (806 )
Net income (loss) attributable to common stockholders $ 942     $ (1,175 )   $ 11,152     $ (15,527 )
Net income (loss) per common share:                      
Basic $ 0.01     $ (0.03 )   $ 0.18     $ (0.45 )
Diluted $ 0.01     $ (0.03 )   $ 0.18     $ (0.45 )
Weighted-average common shares outstanding:                      
Basic   65,289,320       39,359,523       60,413,694       34,790,861  
Diluted   65,289,320       39,359,523       60,413,694       34,790,861  
Dividends declared per Series A convertible preferred share $ 1.91     $ 1.91     $ 5.72     $ 2.59  
Dividends declared per Series B convertible preferred share $     $     $     $ 12.50  
                       

 

 
 
Daseke, Inc. and Subsidiaries
Supplemental Information: Flatbed Solutions
(Unaudited)
                               
    Three Months Ended September 30,           
    2018   2017   Increase   (Decrease)
(Dollars in thousands)   $   %   $   %   $   %
                               
REVENUE (1) :                              
Freight   $ 130,678     72.0   $ 67,807     79.2   $ 62,871   92.7
Brokerage     29,134     16.1     9,385     11.0     19,749   210.4
Logistics     824     0.5         *     824   *
Fuel surcharge     20,858     11.5     8,400     9.8     12,458   148.3
Total revenue     181,494     100.0     85,592     100.0     95,902   112.0
                               
OPERATING EXPENSES (1) :                              
Total operating expenses     169,264     93.3     80,837     94.4     88,427   109.4
Operating ratio     93.3 %         94.4 %              
Adjusted operating ratio     92.4 %         93.5 %              
INCOME FROM OPERATIONS   $ 12,230     6.7   $ 4,755     5.6   $ 7,475   157.2
                               
OPERATING STATISTICS:                              
Total miles     64,073,858           36,646,345           27,427,513   74.8
Company-operated tractors, at quarter-end     1,363           1,141           222   19.5
Owner-operated tractors, at quarter-end     1,636           463           1,173   253.3
Number of trailers, at quarter-end     5,173           2,878           2,295   79.7
                               
Company-operated tractors, average for the quarter     1,244           1,144           100   8.7
Owner-operated tractors, average for the quarter     1,611           469           1,142   243.5
                               
* 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)
                               
    Nine Months Ended September 30,           
    2018   2017   Increase   (Decrease)
(Dollars in thousands)   $   %   $   %   $   %
                               
REVENUE (1) :                              
Freight   $ 353,676     72.4   $ 200,670     79.1   $ 153,006     76.2  
Brokerage     76,006     15.6     27,979     11.0     48,027     171.7  
Logistics     2,231     0.5         *     2,231     *
Fuel surcharge     56,768     11.6     25,145     9.9     31,623     125.8  
Total revenue     488,681     100.0     253,794     100.0     234,887     92.6  
                               
OPERATING EXPENSES (1) :                              
Total operating expenses     460,219     94.2     238,839     94.1     221,380     92.7  
Operating ratio     94.2 %         94.1 %              
Adjusted operating ratio     93.2 %         93.1 %              
INCOME FROM OPERATIONS   $ 28,462     5.8   $ 14,955     5.9   $ 13,507     90.3  
                               
OPERATING STATISTICS:                              
Total miles     180,415,251           112,318,418           68,096,833     60.6  
Company-operated tractors, at period-end     1,363           1,141           222     19.5  
Owner-operated tractors, at period-end     1,636           463           1,173     253.3  
Number of trailers, at period-end     5,173           2,878           2,295     79.7  
                               
Company-operated tractors, average for the period     1,151           1,158           (7 )   (0.6 )
Owner-operated tractors, average for the period     1,524           454           1,070     235.7  
                               
* 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)
                               
    Three Months Ended September 30,           
    2018   2017   Increase   (Decrease)
(Dollars in thousands)   $   %   $   %   $   %
                               
REVENUE (1) :                              
Freight   $ 202,085     71.2   $ 105,137     71.2   $ 96,948   92.2
Brokerage     53,233     18.8     24,852     16.8     28,381   114.2
Logistics     10,855     3.8     7,886     5.3     2,969   37.6
Fuel surcharge     17,718     6.2     9,756     6.6     7,962   81.6
Total revenue     283,891     100.0     147,631     100.0     136,260   92.3
                               
OPERATING EXPENSES (1) :                              
Total operating expenses     272,076     95.8     140,472     95.2     131,604   93.7
Operating ratio     95.8 %         95.2 %              
Adjusted operating ratio     93.0 %         92.6 %              
INCOME FROM OPERATIONS   $ 11,815     4.2   $ 7,159     4.8   $ 4,656   65.0
                               
OPERATING STATISTICS:                              
Total miles     57,228,358           38,948,331           18,280,027   46.9
Company-operated tractors, at quarter-end     2,436           1,716           720   42.0
Owner-operated tractors, at quarter-end     678           452           226   50.0
Number of trailers, at quarter-end     8,724           5,266           3,458   65.7
                               
Company-operated tractors, average for the quarter     2,446           1,638           808   49.3
Owner-operated tractors, average for the quarter     721           408           313   76.7
                               
* 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)
                               
    Nine Months Ended September 30,           
    2018   2017   Increase   (Decrease)
(Dollars in thousands)   $   %   $   %   $   %
                               
REVENUE (1) :                              
Freight   $ 496,712     72.3   $ 250,255     73.5   $ 246,457   98.5
Brokerage     112,823     16.4     55,820     16.4     57,003   102.1
Logistics     29,128     4.2     10,594     3.1     18,534   174.9
Fuel surcharge     48,474     7.1     23,620     6.9     24,854   105.2
Total revenue     687,137     100.0     340,289     100.0     346,848   101.9
                               
OPERATING EXPENSES (1) :                              
Total operating expenses     663,072     96.5     327,533     96.3     335,539   102.4
Operating ratio     96.5 %         96.3 %              
Adjusted operating ratio     93.4 %         94.0 %              
INCOME FROM OPERATIONS   $ 24,065     3.5   $ 12,756     3.7   $ 11,309   88.7
                               
OPERATING STATISTICS:                              
Total miles     163,313,962           94,967,882           68,346,080   72.0
Company-operated tractors, at period-end     2,436           1,716           720   42.0
Owner-operated tractors, at period-end     678           452           226   50.0
Number of trailers, at period-end     8,724           5,266           3,458   65.7
                               
Company-operated tractors, average for the period     2,173           1,375           798   58.0
Owner-operated tractors, average for the period     618           295           323   109.5
                               
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
(In thousands)
                       
  Three Months Ended September 30,    Nine Months Ended September 30, 
  2018   2017   2018   2017
                       
Net income (loss) $ 2,181     $ 50     $ 14,869     $ (11,802 )
Depreciation and amortization   36,800       19,805       93,748       53,758  
Interest income   (170 )     (76 )     (1,213 )     (130 )
Interest expense   11,839       8,624       33,246       21,064  
Write-off of unamortized deferred financing fees                     3,883  
Income tax provision (benefit)   670       (2,862 )     (14,258 )     (3,448 )
Acquisition-related transaction expenses   601       773       2,442       2,255  
Impairment               2,840        
Stock based compensation   928       663       2,716       1,201  
Expenses related to the Business Combination and related transactions                     2,034  
Tractor operating lease charges   5,432       4,448       14,693       12,366  
Adjusted EBITDAR $   58,281     $   31,425     $   149,083     $   81,181  
Less tractor operating lease charges   (5,432 )     (4,448 )     (14,693 )     (12,366 )
Adjusted EBITDA $   52,849     $   26,977     $   134,390     $   68,815  
Net capital expenditures   (49,898 )     (14,930 )     (85,296 )     (23,922 )
Free cash flow $   2,951     $   12,047     $   49,094     $   44,893  
                       

 

 
 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Adjusted EBITDA by Segment
(Unaudited)
(In thousands)
                                               
  Three Months Ended   Three Months Ended
  September 30, 2018   September 30, 2017
  Flatbed   Specialized   Corporate   Consolidated   Flatbed   Specialized   Corporate   Consolidated
Net income (loss) $ 5,968   $ 5,591   $ (9,378 )   $ 2,181   $ 2,280   $ 4,427   $ (6,657 )   $ 50  
Depreciation and amortization   9,200     27,574     26       36,800     7,150     12,619     36       19,805  
Net interest expense   2,131     2,874     6,664       11,669     1,774     2,114     4,660       8,548  
Income tax provision (benefit)   4,154     3,890     (7,374 )     670     717     633     (4,212 )     (2,862 )
Acquisition-related transaction expenses       1     600       601             773       773  
Stock based compensation   243     523     162       928     237     293     133       663  
Adjusted EBITDA $   21,696   $   40,453   $   (9,300 )   $   52,849   $   12,158   $   20,086   $   (5,267 )   $   26,977  
                                               

 

 
 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Acquisition Adjusted EBITDA by Segment
(Unaudited)
(In thousands)
                                   
  Three Months Ended   Three Months Ended
  September 30, 2018   September 30, 2017
  Flatbed   Specialized   Corporate   Consolidated   Flatbed   Specialized   Corporate   Consolidated
Net income (loss) $ 6,520   $ 5,591   $ (9,378 )   $ 2,733   $ 4,230   $ 6,973   $ (6,657 )   $ 4,546  
Depreciation and amortization   9,730     27,574     26       37,330     10,761     20,064     36       30,861  
Net interest expense   2,188     2,874     6,664       11,726     2,061     4,223     4,660       10,944  
Income tax provision (benefit)   4,154     3,890     (7,374 )     670     717     1,286     (4,212 )     (2,209 )
Acquisition-related transaction expenses       1     600       601             773       773  
Stock based compensation   243     523     162       928     237     366     133       736  
Acquisition adjusted EBITDA $   22,835   $   40,453   $   (9,300 )   $   53,988   $   18,006   $   32,912   $   (5,267 )   $   45,651  
                                               

 

 
 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Aveda Adjusted EBITDA
(Unaudited)
(In thousands)
           
  Four (1) Months Ended September 30, 
  2018     2017  
           
Net income (loss) $ (2,348 )   $ (1,689 )
Depreciation and amortization   11,340       4,134  
Net interest expense   18       2,018  
Income tax provision (benefit)   (1,514 )     138  
Acquisition-related transaction expenses   29        
Stock based compensation         286  
Aveda Adjusted EBITDA $   7,525     $   4,887  
           
(1) The 2018 period is from June 6, 2018 through September 30, 2018.
 

 

 
 
Daseke, Inc. and Subsidiaries
Reconciliation of Operating Ratio to Adjusted Operating Ratio
(Unaudited)
 
                         
    Three Months Ended September 30,    Nine Months Ended September 30, 
(Dollars in thousands)   2018     2017     2018     2017  
                         
Total revenue   $ 461,589     $ 231,322     $ 1,166,069     $ 589,079  
Fuel surcharge     38,256       18,008       104,244       48,331  
Operating revenue, net of fuel surcharge   $ 423,333     $ 213,314     $ 1,061,825     $ 540,748  
                         
Total operating expenses   $ 447,672     $ 225,618     $ 1,135,887     $ 579,759  
Fuel surcharge     38,256       18,008       104,244       48,331  
Acquisition-related transaction expenses     601       773       2,442       2,255  
Impairment                 2,840        
Expenses related to the Business Combination and related transactions                       2,034  
Net impact of step-up in basis of acquired assets     6,957       3,260       16,421       7,088  
Adjusted operating expenses   $ 401,858     $ 203,577     $ 1,009,940     $ 520,051  
                         
Operating ratio     97.0 %     97.5 %     97.4 %     98.4 %
Adjusted operating ratio     94.9 %     95.4 %     95.1 %     96.2 %
                         

 

 
 
Daseke, Inc. and Subsidiaries
Reconciliation of Operating Ratio to Adjusted Operating Ratio by Segment: Flatbed
(Unaudited)
 
                         
    Three Months Ended September 30,    Nine Months Ended September 30, 
(Dollars in thousands)   2018   2017   2018   2017
                         
Total revenue(1)   $ 181,494     $ 85,592     $ 488,681     $ 253,794  
Fuel surcharge     20,858       8,400       56,768       25,145  
Operating revenue, net of fuel surcharge   $ 160,636     $ 77,192     $ 431,913     $ 228,649  
                         
Total operating expenses(1)   $ 169,264     $ 80,837     $ 460,219     $ 238,839  
Fuel surcharge     20,858       8,400       56,768       25,145  
Net impact of step-up in basis of acquired assets     25       227       888       888  
Adjusted operating expenses   $ 148,381     $ 72,210     $ 402,563     $ 212,806  
                         
Operating ratio     93.3 %     94.4 %     94.2 %     94.1 %
Adjusted operating ratio     92.4 %     93.5 %     93.2 %     93.1 %
                         
(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)
 
                         
    Three Months Ended September 30,    Nine Months Ended September 30, 
(Dollars in thousands)   2018
  2017
  2018
  2017
                         
Total revenue(1)   $ 283,891     $ 147,631     $ 687,137     $ 340,289  
Fuel surcharge     17,718       9,756       48,474       23,620  
Operating revenue, net of fuel surcharge   $ 266,173     $ 137,875     $ 638,663     $ 316,669  
                         
Total operating expenses(1)   $ 272,076     $ 140,472     $ 663,072     $ 327,533  
Fuel surcharge     17,718       9,756       48,474       23,620  
Impairment                 2,840        
Net impact of step-up in basis of acquired assets     6,932       3,033       15,533       6,200  
Adjusted operating expenses   $ 247,426     $ 127,683     $ 596,225     $ 297,713  
                         
Operating ratio     95.8 %     95.2 %     96.5 %     96.3 %
Adjusted operating ratio     93.0 %     92.6 %     93.4 %     94.0 %
                         
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
                         

 

 

 

Daseke with R (002).png

Source: Daseke, Inc.

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Investor Contacts

Liolios Investor Relations

Cody Slach or Sean Mansouri

949-574-3860 DSKE@liolios.com
Daseke Headquarters

15455 Dallas Parkway, Ste 550
Addison, TX 75001