EX-99.1 2 ex-99d1.htm EX-99.1 DSKE_20181106_8K_EarningsRelease_99_1

Exhibit 99.1

 

Picture 1

Daseke Reports Record Third Quarter 2018 Results

Addison, Texas – November 6, 2018 –  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.

1Net of eliminations, Flatbed Solutions revenue was $180.7 million and Specialized Solutions revenue was $280.9 million.

2See Non-GAAP Measures for more information regarding Adjusted EBITDA measures.

3See Non-GAAP Measures for more information regarding Acquisition Adjusted EBITDA measures.

 

 

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“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.”

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.

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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

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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

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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

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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

 

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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

 

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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

 

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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.

Page 9 of 18

 

Picture 2

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.

Page 10 of 18

 

Picture 2

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.

Page 11 of 18

 

Picture 2

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.

Page 12 of 18

 

Picture 2

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

Page 13 of 18

 

Picture 2

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

Page 14 of 18

 

Picture 2

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.

 

Page 15 of 18

 

Picture 2

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%

Page 16 of 18

 

Picture 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.

Page 17 of 18

 

Picture 2

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.

Page 18 of 18