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8-K - 8-K - Daseke, Inc.f8-k.htm

Exhibit 99.1

 

Picture 1

 

Daseke, Inc. Announces Third Quarter 2017 Earnings

ADDISON, TEXAS — November 9, 2017 — Daseke, Inc. (NASDAQ: DSKE,  DSKEW), the largest owner and a leading consolidator of flat bed and specialized transportation solutions in North America, today announced earnings results for the 2017 third quarter.

 

Highlights

 

·

Improved third quarter 2017 revenue by 32.8 percent year over year, and 17.2 percent over second quarter 2017 revenue.

·

Completed an underwritten public offering of 5.7 million shares of common stock, generating net proceeds of approximately $63.6 million.

·

Acquired two operating companies during the quarter to advance the company’s consolidation strategy and expand its end markets with the ability to ship high security cargo, and the Department of Defense has become a top ten customer.

·

Acquisition pipeline remains robust for continued execution of consolidation growth strategy.

Daseke expects to achieve its 2017 pro forma Adjusted EBITDA target of $140 million.1

 

Revenue for the quarter was $231.3 million compared with $174.1 million for the same period in 2016. Revenue for the third quarter of 2017 increased 32.8 percent year over year and improved 17.2 percent sequentially over 2017 second quarter revenue of $197.3 million.

 

Net income was $50,000 for the third quarter of 2017, compared with net loss of $1.3 million for the prior year and a net loss of $4.1 million for the second quarter of 2017. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), a non-GAAP financial measure, was $27.0 million for the third quarter of 2017, compared with $25.0 million for the year-ago period. Adjusted EBITDA increased 8 percent year over year, and improved 11 percent sequentially over the Adjusted EBITDA totals from $24.3 million in the 2017 second quarter.

 

Acquisitions

During the quarter, Daseke completed the acquisition of two companies.  The Steelman Companies, which was discussed in the second quarter 2017 earnings announcement, and R&R Trucking, a leading specialized transporter of defense and commercial high security cargo.

 

 


12017 pro forma Adjusted EBITDA will be calculated by adding Daseke’s actual 2017 Adjusted EBITDA and the Adjusted EBITDA of any acquired business during 2017 for the period beginning on January 1, 2017 and ending on the acquisition date.


 

The addition of R&R Trucking expands the company’s product offerings to include transporting the nation's most sensitive cargo for the Department of Defense and the Department of Energy.  This marks Daseke’s fourth acquisition since May 1, 2017.  Based on the 2016 financial results, the combined 2016 estimated revenue and Adjusted EBITDA of the four companies acquired in 2017 totals $218 million and  $26 million, respectively.2 3

 

Approximately 61 percent of the combined revenue of the companies acquired this quarter is estimated to be asset-light or logistics related.

 

Management Comments

 “Revenues and adjusted EBITDA for the 2017 third quarter increased year over year, and the company posted positive net income for the quarter,” said Scott Wheeler, executive vice president and CFO.  “We believe these results present an accurate snapshot of our performance trend and growth.”

 

“Our third quarter adjusted EBITDA of $27.0 million included a  $5.7 million negative impact related primarily to costs associated with Hurricanes Irma and Harvey and, to a lesser extent, lower tractor utilization from an increase in unseated trucks,” Wheeler said.

 

Don Daseke, chairman, president and CEO, added, “While the hurricane impact was a one-time event, we are proactively addressing the competitive driver recruiting market by offering enhanced driver incentives, including a pay increase and stock incentives.  In our industry, professional truck drivers truly are the heart and soul of everything we do.  We  intend to be the employer of choice for drivers, just as we are the carrier of choice for our blue-chip customers.

 

“This quarter R&R Trucking joined the Daseke family. The addition of R&R increases our footprint with additional terminals and adds another transportation capability within our company,” he said.  “R&R is one of the very few companies in the United States approved to provide transportation services for the Department of Defense and the Department of Energy.  They are also approved by the Department of Defense to own and operate high security terminals.

 

“We also added The Steelman Companies during the quarter.  The Steelman Companies boast 26 years of operating history in the flatbed and heavy haul freight segments and provide an excellent complement to our existing family of Daseke companies, enhancing our geographic service areas, providing large-scale industrial warehousing operations and giving Daseke a stronger presence in the powersports and heavy haul markets.

 

 

 


2Based on the acquired companies’ internally prepared financial statements. Does not give effect to synergies.

3Net income of $2.2million plus: depreciation and amortization of $20.4 million, interest of $2.2million, taxes of $1.2 million and acquisition-related transaction expenses of $0.3 million results in Adjusted EBITDA of $26.3million.


 

“Our opportunity pipeline continues to offer significant prospects to enable our push to consolidate this highly fragmented $133 billion industry,” Daseke said.  “Even though we have had significant challenges, including lower utilization from unseated trucks, a choppy specialized market and the short-term but significant impact of the two hurricanes, we are reiterating our 2017 pro forma Adjusted EBITDA target of $140 million, after giving effect to acquisitions made during 2017.”

 

Financing Developments

During the quarter, the company announced the completion of an underwritten offering of shares of Daseke common stock at $12.00 per share.  The sale was comprised of 5,675,967 shares on behalf of the company and 409,833 shares on behalf of certain stockholders. Total net proceeds (after underwriting discounts and commissions but before estimated offering expenses) was approximately $63.6 million to the Company and approximately $4.6 million to the selling stockholders. The proceeds from the offering are expected to be used for general corporate purposes, which may include, among other things, working capital, capital expenditures, debt repayment or refinancing or the financing of possible future acquisitions. The Company did not receive any of the proceeds from the sale of the shares of common stock by the selling stockholders.

 

Daseke also finalized an amendment to its Term Loan Agreement during the quarter.  The successful completion of this temporary amendment allows the company to capitalize on growth initiatives by providing the company with the financial flexibility to act quickly and decisively as acquisition opportunities become actionable.

 

Segment Results

Third quarter 2017 revenue for the Flatbed Segment improved 8.4 percent to $85.6 million compared with $79.0 million for the 2016 period.  Operating income for the third quarter of 2017 was $4.8 million, a 25.3 percent increase from operating income of $3.8 million for the same period last year. Total miles for Flatbed Solutions during the 2017 third quarter were 36.6 million, compared with 37.8  million miles reported for the same period last year.

 

The Company’s Specialized Segment posted revenue of $147.6 million for the 2017 third quarter, and $96.5 million for the year-ago period, an increase of 53 percent. Third quarter operating income for the segment was $7.2 million compared with $5.7 million for the 2016 third quarter, an increase of 24.7 percent.  Total miles for the Specialized Solutions segment were 38.9 million for the third quarter of 2017, an increase of 60.5 percent over the third quarter 2016 total of 24.3 million miles.

 

Conference Call

Daseke will host a conference call and webcast today at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to review third quarter fiscal 2017 earnings results. The call will be hosted by Don Daseke, chairman, president and CEO, and Scott Wheeler, director, executive vice president and CFO.

 

Interested individuals may join the teleconference by dialing (855) 242-9918 and providing the conference ID 88305217. International callers may join the call by dialing (414) 238-9803. The live audio webcast can be accessed through the Investors section of Daseke's website: investor.daseke.com.  The information to be discussed during the teleconference (including the investor presentation) may be found on the Investors section of the company’s website in advance of the call.

 

A telephonic replay of the conference call will be available through 1:00 p.m. Central time (2:00 p.m. Eastern) on November 23, 2017. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and reference the conference ID 88305217. An archived webcast of the conference call can be accessed through the company's website approximately two hours after the end of the call.

 

About Daseke, Inc.

Daseke, Inc. 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 their experienced people, over 3,800 tractors, over 8,200 flatbed and specialized trailers and more than a million square feet of industrial warehousing space.

 

Use of Non-GAAP Financial Measures

This news release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDAR, 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, and (x)

 

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’s board of directors and executive management team use Adjusted EBITDA and Adjusted EBITDAR as key measures of its performance and for business planning. Adjusted EBITDA and Adjusted EBITDAR 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 and Adjusted EBITDAR 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 and Adjusted EBITDAR 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 and Adjusted EBITDAR 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 and Adjusted EBITDAR. Certain items excluded from Adjusted EBITDA and Adjusted EBITDAR 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 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 non- operational. 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.

 

-tables follow-

 


 

Daseke, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

    

September 30,

    

December 31,

 

 

 

2017 

 

2016 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

 

$

112,510 

 

$

3,695 

 

Accounts receivable, net of allowance of $382 and $321 at September 30, 2017 and December 31, 2016, respectively

 

 

106,081 

 

 

54,177 

 

Drivers' advances and other receivables

 

 

2,809 

 

 

2,632 

 

Current portion of net investment in sales-type leases

 

 

6,022 

 

 

3,516 

 

Parts supplies

 

 

4,365 

 

 

1,467 

 

Income tax receivable

 

 

111 

 

 

719 

 

Prepaid and other current assets

 

 

20,321 

 

 

13,504 

 

Total current assets

 

 

252,219 

 

 

79,710 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

369,199 

 

 

318,747 

 

Intangible assets, net

 

 

77,541 

 

 

71,653 

 

Goodwill

 

 

139,889 

 

 

89,035 

 

Other long-term assets

 

 

18,573 

 

 

11,090 

 

Total assets

 

 

857,421 

 

 

570,235 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Checks outstanding in excess of bank balances

 

 

1,479 

 

 

1,166 

 

Accounts payable

 

 

12,493 

 

 

4,788 

 

Accrued expenses and other liabilities

 

 

24,660 

 

 

16,104 

 

Accrued payroll, benefits and related taxes

 

 

12,027 

 

 

7,835 

 

Accrued insurance and claims

 

 

10,248 

 

 

9,840 

 

Current portion of long-term debt

 

 

26,514 

 

 

52,665 

 

Total current liabilities

 

 

87,421 

 

 

92,398 

 

 

 

 

 

 

 

 

 

Line of credit

 

 

 

 

 

6,858 

 

Long-term debt, net of current portion

 

 

395,841 

 

 

208,372 

 

Deferred tax liabilities

 

 

114,900 

 

 

92,815 

 

Other long-term liabilities

 

 

1,342 

 

 

286 

 

Subordinated debt

 

 

 

 

 

66,443 

 

Total liabilities

 

 

599,504 

 

 

467,172 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Series A convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized; 650,000 shares issued and liquidation preference $65,000

 

 

65,000 

 

 

— 

 

Series B convertible preferred stock, $0.01 par value; 75,000 shares authorized; 0 and 64,500 shares issued and outstanding at September 30, 2017 and December 31, 2016

 

 

— 

 

 

 

Common stock (par value $0.0001 per share); 250,000,000 shares authorized, 44,480,232 and 20,980,961 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively

 

 

 

 

 

Additional paid-in-capital

 

 

222,102 

 

 

117,807 

 

Accumulated deficit

 

 

(30,221)

 

 

(14,694)

 

Accumulated other comprehensive income (loss)

 

 

1,032 

 

 

(52)

 

Total stockholders’ equity

 

 

257,917 

 

 

103,063 

 

Total liabilities and stockholders’ equity

 

 

857,421  

 

 

570,235  

 

 


 

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,

 

 

    

2017 

    

2016 

    

2017 

    

2016 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

171,245 

 

$

135,415 

 

$

446,454 

 

$

398,466 

 

Brokerage

 

 

34,198 

 

 

25,977 

 

 

83,723 

 

 

68,358 

 

Logistics

 

 

7,871 

 

 

— 

 

 

10,571 

 

 

— 

 

Fuel surcharge

 

 

18,008 

 

 

12,756 

 

 

48,331 

 

 

34,562 

 

Total revenue

 

 

231,322 

 

 

174,148 

 

 

589,079 

 

 

501,386 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and employee benefits

 

 

64,955 

 

 

49,298 

 

 

174,253 

 

 

149,861 

 

Fuel

 

 

24,734 

 

 

17,296 

 

 

64,423 

 

 

49,076 

 

Operations and maintenance

 

 

35,132 

 

 

27,874 

 

 

86,332 

 

 

72,933 

 

Communications

 

 

539 

 

 

370 

 

 

1,491 

 

 

1,208 

 

Purchased freight

 

 

61,598 

 

 

42,541 

 

 

148,945 

 

 

120,501 

 

Administrative expenses

 

 

8,619 

 

 

5,221 

 

 

24,019 

 

 

17,711 

 

Sales and marketing

 

 

488 

 

 

435 

 

 

1,425 

 

 

1,280 

 

Taxes and licenses

 

 

2,963 

 

 

2,268 

 

 

7,855 

 

 

6,946 

 

Insurance and claims

 

 

6,351 

 

 

5,065 

 

 

15,516 

 

 

13,648 

 

Acquisition-related transaction expenses

 

 

773 

 

 

— 

 

 

2,255 

 

 

18 

 

Depreciation and amortization

 

 

19,805 

 

 

16,998 

 

 

53,758 

 

 

50,515 

 

(Gain) loss on disposition of revenue property and equipment

 

 

(339)

 

 

(495)

 

 

(513)

 

 

158 

 

Impairment

 

 

— 

 

 

1,195 

 

 

— 

 

 

1,195 

 

Total operating expenses

 

 

225,618 

 

 

168,066 

 

 

579,759 

 

 

485,050 

 

Income from operations

 

 

5,704 

 

 

6,082 

 

 

9,320 

 

 

16,336 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(76)

 

 

(4)

 

 

(130)

 

 

(40)

 

Interest expense

 

 

8,624 

 

 

6,724 

 

 

21,064 

 

 

17,521 

 

Write-off of unamortized deferred financing fees

 

 

— 

 

 

— 

 

 

3,883 

 

 

— 

 

Other

 

 

(32)

 

 

(64)

 

 

(247)

 

 

(266)

 

Total other expense

 

 

8,516 

 

 

6,656 

 

 

24,570 

 

 

17,215 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before provision (benefit) for income taxes

 

 

(2,812)

 

 

(574)

 

 

(15,250)

 

 

(879)

 

Provision (benefit) for income taxes

 

 

(2,862)

 

 

683 

 

 

(3,448)

 

 

607 

 

Net income (loss)

 

 

50 

 

 

(1,257)

 

 

(11,802)

 

 

(1,486)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized income (loss) on interest rate swaps

 

 

 

 

 

61 

 

 

52 

 

 

(1)

 

Foreign currency translation adjustments

 

 

526 

 

 

— 

 

 

1,032 

 

 

— 

 

Comprehensive income (loss)

 

 

576 

 

 

(1,196)

 

 

(10,718)

 

 

(1,487)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

50 

 

 

(1,257)

 

 

(11,802)

 

 

(1,486)

 

Less dividends to Series A convertible preferred stockholders

 

 

(1,225)

 

 

— 

 

 

(2,919)

 

 

— 

 

Less dividends to Series B convertible preferred stockholders

 

 

 

 

 

(1,243)

 

 

(806)

 

 

(3,729)

 

Net loss attributable to common stockholders

 

$

(1,175)

 

$

(2,500)

 

$

(15,527)

 

$

(5,215)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.03)

 

$

(0.12)

 

$

(0.45)

 

$

(0.25)

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

39,359,523 

 

 

20,980,961 

 

 

34,790,861 

 

 

20,980,961 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per Series A convertible preferred share

 

$

1.91 

 

$

— 

 

$

2.59 

 

$

— 

 

Dividends declared per Series B convertible preferred share

 

$

 

 

$

18.75 

 

$

12.50 

 

$

18.75 

 

 


 

Daseke, Inc. and Subsidiaries

Supplemental Information: Flatbed Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

Increase

 

 

 

 

 

2017

 

2016

 

(Decrease)

 

 

 

(Dollars in thousands)

    

$

    

%

 

$

    

%

 

$

    

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

67,807 

 

79.2 

 

$

64,281 

 

81.4 

 

$

3,526 

 

5.5 

 

Brokerage

 

 

9,385 

 

11.0 

 

 

7,410 

 

9.4 

 

 

1,975 

 

26.7 

 

Logistics

 

 

 

 

 

 

 

 

 

*

 

Fuel surcharge

 

 

8,400 

 

9.8 

 

 

7,284 

 

9.2 

 

 

1,116 

 

15.3 

 

Total revenue

 

 

85,592 

 

100.0 

 

 

78,975 

 

100.0 

 

 

6,617 

 

8.4 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

80,837 

 

94.4 

 

 

75,181 

 

95.2 

 

 

5,656 

 

7.5 

 

Operating ratio

 

 

94.4 

%  

 

 

 

95.2 

%  

 

 

 

 

 

 

 

Adjusted operating ratio (2):

 

 

93.5 

%  

 

 

 

93.9 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

4,755 

 

5.6 

 

$

3,794 

 

4.8 

 

$

961 

 

25.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

36,646,345 

 

 

 

 

37,767,726 

 

 

 

 

(1,121,381)

 

(3.0)

 

Company-operated tractors

 

 

1,144 

 

 

 

 

1,162 

 

 

 

 

(18)

 

(1.5)

 

Owner-operated tractors

 

 

469 

 

 

 

 

441 

 

 

 

 

28 

 

6.3 

 

Number of trailers

 

 

2,881 

 

 

 

 

2,842 

 

 

 

 

39 

 

1.4 

 


* Indicates not meaningful

(1)

Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company's consolidated results.

(2)

Adjusted operating ratio is not a recognized measure under GAAP. For a definition of adjusted operating ratio and reconciliation of adjusted operating ratio to operating ratio, see "Non-GAAP Financial Measures."


 

Daseke, Inc. and Subsidiaries

Supplemental Information: Flatbed Solutions

(Unaudited)

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2016

 

Increase
(Decrease)

 

 

    

$

    

%

    

$

    

%

 

$

    

%

 

REVENUE (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

200,670 

 

79.1 

 

$

194,855 

 

82.2 

 

$

5,815 

 

3.0 

 

Brokerage

 

 

27,979 

 

11.0 

 

 

22,482 

 

9.5 

 

 

5,497 

 

24.5 

 

Logistics

 

 

— 

 

— 

 

 

— 

 

— 

 

 

— 

 

*

 

Fuel surcharge

 

 

25,145 

 

9.9 

 

 

19,832 

 

8.4 

 

 

5,313 

 

26.8 

 

Total revenue

 

 

253,794 

 

100.0 

 

 

237,169 

 

100.0 

 

 

16,625 

 

7.0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

238,839 

 

94.1 

 

 

223,128 

 

94.1 

 

 

15,711 

 

7.0 

 

Operating ratio

 

 

94.1 

%  

 

 

 

94.1 

%  

 

 

 

 

 

 

 

Adjusted operating ratio (2):

 

 

93.1 

%  

 

 

 

92.2 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

14,955 

 

5.9 

 

$

14,041 

 

5.9 

 

$

914 

 

6.5 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

112,318,418 

 

 

 

 

114,115,490 

 

 

 

 

(1,797,072)

 

(1.6)

 

Company-operated tractors

 

 

1,158 

 

 

 

 

1,173 

 

 

 

 

(15)

 

(1.3)

 

Owner-operated tractors

 

 

454 

 

 

 

 

442 

 

 

 

 

12 

 

2.7 

 

Number of trailers

 

 

2,916 

 

 

 

 

2,877 

 

 

 

 

39 

 

1.4 

 


* Indicates not meaningful

(1)

Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.

(2)

Adjusted operating ratio is not a recognized measure under GAAP. For a definition of adjusted operating ratio and reconciliation of adjusted operating ratio to operating ratio, see “Non-GAAP Financial Measures.”

 


 

Daseke, Inc. and Subsidiaries

Supplemental Information: Specialized Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

(Decrease)

 

 

 

 

 

2017

 

2016

 

Increase

 

 

 

(Dollars in thousands)

    

$

    

%

 

$

    

%

 

$

    

%

 

REVENUE (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

105,137 

 

71.2 

 

$

72,367 

 

75.0 

 

$

32,770 

 

45.3 

 

Brokerage

 

 

24,852 

 

16.8 

 

 

18,579 

 

19.2 

 

 

6,273 

 

33.8 

 

Logistics

 

 

7,886 

 

5.3 

 

 

 

 

 

7,886 

 

*

 

Fuel surcharge

 

 

9,756 

 

6.6 

 

 

5,588 

 

5.8 

 

 

4,168 

 

74.6 

 

Total revenue

 

 

147,631 

 

100.0 

 

 

96,534 

 

100.0 

 

 

51,097 

 

52.9 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

140,472 

 

95.2 

 

 

90,795 

 

94.1 

 

 

49,677 

 

54.7 

 

Operating ratio

 

 

95.2 

%  

 

 

 

94.1 

%  

 

 

 

 

 

 

 

Adjusted operating ratio (2):

 

 

92.6 

%  

 

 

 

91.2 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

7,159 

 

4.8 

 

$

5,739 

 

5.9 

 

$

1,420 

 

24.7 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

38,948,331 

 

 

 

 

24,266,511 

 

 

 

 

14,681,820 

 

60.5 

 

Company-operated tractors

 

 

1,638 

 

 

 

 

1,109 

 

 

 

 

529 

 

47.7 

 

Owner-operated tractors

 

 

408 

 

 

 

 

236 

 

 

 

 

172 

 

72.9 

 

Number of trailers

 

 

4,813 

 

 

 

 

3,394 

 

 

 

 

1,419 

 

41.8 

 


* Indicates not meaningful

(1)

Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company's consolidated results.

(2)

Adjusted operating ratio is not a recognized measure under GAAP. For a definition of adjusted operating ratio and reconciliation of adjusted operating ratio to operating ratio, see "Non-GAAP Financial Measures."

 


 

Daseke, Inc. and Subsidiaries

Supplemental Information: Specialized Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase

 

 

 

 

 

2017

 

2016

 

(Decrease)

 

 

 

 

    

$

    

%

 

$

    

%

 

$

    

%

 

REVENUE (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

250,255 

 

73.5 

 

$

206,641 

 

77.2 

 

$

43,614 

 

21.1 

 

Brokerage

 

 

55,820 

 

16.4 

 

 

45,986 

 

17.2 

 

 

9,834 

 

21.4 

 

Logistics

 

 

10,594 

 

3.1 

 

 

— 

 

*

 

 

10,594 

 

*

 

Fuel surcharge

 

 

23,620 

 

6.9 

 

 

15,024 

 

5.6 

 

 

8,596 

 

57.2 

 

Total revenue

 

 

340,289 

 

100.0 

 

 

267,651 

 

100.0 

 

 

72,638 

 

27.1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

327,533 

 

96.3 

 

 

252,962 

 

94.5 

 

 

74,571 

 

29.5 

 

Operating ratio

 

 

96.3 

%  

 

 

 

94.5 

%  

 

 

 

 

 

 

 

Adjusted operating ratio (2):

 

 

94.0 

%  

 

 

 

92.5 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

12,756 

 

3.7 

 

$

14,689 

 

5.5 

 

$

(1,933)

 

(13.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

94,967,882 

 

 

 

 

74,273,172 

 

 

 

 

20,694,710 

 

27.9 

 

Company-operated tractors

 

 

1,382 

 

 

 

 

1,091 

 

 

 

 

291 

 

26.7 

 

Owner-operated tractors

 

 

294 

 

 

 

 

241 

 

 

 

 

53 

 

22.0 

 

Number of trailers

 

 

4,100 

 

 

 

 

3,332 

 

 

 

 

768 

 

23.0 

 


* Indicates not meaningful

(1)

Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.

(2)

Adjusted operating ratio is not a recognized measure under GAAP. For a definition of adjusted operating ratio and reconciliation of adjusted operating ratio to operating ratio, see “Non-GAAP Financial Measures.”


 

Daseke, Inc. and Subsidiaries

Reconciliation of Non-GAAP Measures

(Unaudited, In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

    

2017 

    

2016 

    

2017 

    

2016 

 

Net income (loss)

 

$

50 

 

$

(1,257)

 

$

(11,802)

 

$

(1,486)

 

Depreciation and amortization

 

 

19,805 

 

 

16,998 

 

 

53,758 

 

 

50,515 

 

Interest income

 

 

(76)

 

 

(4)

 

 

(130)

 

 

(40)

 

Interest expense

 

 

8,624 

 

 

6,724 

 

 

24,947 

 

 

17,521 

 

Income tax provision (benefit)

 

 

(2,862)

 

 

683 

 

 

(3,448)

 

 

607 

 

Acquisition-related transaction expenses

 

 

773 

 

 

16 

 

 

2,255 

 

 

289 

 

Impairment

 

 

— 

 

 

1,195 

 

 

— 

 

 

1,195 

 

Stock based compensation

 

 

663 

 

 

 

 

1,201 

 

 

— 

 

Merger transaction expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Withdrawn initial public offering-related expenses

 

 

— 

 

 

259 

 

 

— 

 

 

3,050 

 

Net losses on sales of defective revenue equipment out of the normal replacement cycle

 

 

— 

 

 

22 

 

 

— 

 

 

718 

 

Impairment on sales of defective revenue equipment out of the normal replacement cycle

 

 

— 

 

 

— 

 

 

— 

 

 

190 

 

Expenses related to the Business Combination and related transactions

 

 

— 

 

 

344 

 

 

2,034 

 

 

344 

 

Tractor operating lease charges

 

 

4,448 

 

 

3,610 

 

 

12,366 

 

 

9,324 

 

Adjusted EBITDAR

 

$

31,425 

 

$

28,590 

 

$

81,181 

 

$

82,227 

 

Less tractor operating lease charges

 

 

(4,448)

 

 

(3,610)

 

 

(12,366)

 

 

(9,324)

 

Adjusted EBITDA

 

$

26,977 

 

$

24,980 

 

$

68,815 

 

$

72,903 

 

Net capital expenditures

 

 

(14,930)

 

 

(10,549)

 

 

(23,922)

 

 

(31,236)

 

Free cash flow

 

$

12,047 

 

$

14,431 

 

$

44,893 

 

$

41,667 

 

 


 

Daseke, Inc. and Subsidiaries

Reconciliation of Operating Ratio to Adjusted Operating Ratio by Segment: Flatbed

(Unaudited, In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(Dollars in thousands)

    

 

2017 

    

 

2016 

    

 

2017 

    

 

2016 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue(1)

 

$

85,592 

 

$

78,975 

 

$

253,794 

 

$

237,169 

 

Fuel surcharge

 

 

8,400 

 

 

7,284 

 

 

25,145 

 

 

19,832 

 

Operating revenue, net of fuel surcharge

 

$

77,192 

 

$

71,691 

 

$

228,649 

 

$

217,337 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

$

80,837 

 

$

75,181 

 

$

238,839 

 

$

223,128 

 

Fuel surcharge

 

 

8,400 

 

 

7,284 

 

 

25,145 

 

 

19,832 

 

Net impact of step-up in basis of acquired assets

 

 

227 

 

 

596 

 

 

888 

 

 

2,835 

 

Adjusted operating expenses

 

$

72,210 

 

$

67,301 

 

$

212,806 

 

$

200,461 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating ratio

 

 

94.4 

%  

 

95.2 

%  

 

94.1 

%  

 

94.1 

%

Adjusted operating ratio

 

 

93.5 

%  

 

93.9 

%  

 

93.1 

%  

 

92.2 

%


(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, In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(Dollars in thousands)

    

 

2017 

    

 

2016 

    

 

2017 

    

 

2016 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue(1)

 

$

147,631 

 

$

96,534 

 

$

340,289 

 

$

267,651 

 

Fuel surcharge

 

 

9,756 

 

 

5,588 

 

 

23,620 

 

 

15,024 

 

Operating revenue, net of fuel surcharge

 

$

137,875 

 

$

90,946 

 

$

316,669 

 

$

252,627 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

$

140,472 

 

$

90,795 

 

$

327,533 

 

$

252,962 

 

Fuel surcharge

 

 

9,756 

 

 

5,588 

 

 

23,620 

 

 

15,024 

 

Impairment

 

 

— 

 

 

1,195 

 

 

— 

 

 

1,195 

 

Net impact of step-up in basis of acquired assets

 

 

3,033 

 

 

1,040 

 

 

6,200 

 

 

3,076 

 

Adjusted operating expenses

 

$

127,683 

 

$

82,972 

 

$

297,713 

 

$

233,667 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating ratio

 

 

95.2 

%  

 

94.1 

%  

 

96.3 

%  

 

94.5 

%

Adjusted operating ratio

 

 

92.6 

%  

 

91.2 

%  

 

94.0 

%  

 

92.5 

%


(1)Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.

 

 

 

 

 

Investor Relations Contact:
Geralyn DeBusk, 972-458-8000
Daseke@HalliburtonIR.com

 

 

Source: Daseke, Inc.