Daseke Reports Record Third Quarter 2018 Results

ADDISON, Texas, Nov. 06, 2018 (GLOBE NEWSWIRE) -- Daseke, Inc. DSKE 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

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