EX-99.1 2 ex-99d1.htm EX-99.1 DSKE_20180318_Exhibit 99.1_Folio

Exhibit 99.1

 

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

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

 

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

·

Revenue increased 71% to $257.2 million.

·

Net income was $38.8 million, or $0.82 per share, compared to a net loss of $10.8 million, or $(0.57) per share.

·

Adjusted EBITDA increased 51% to $23.1 million.

·

Acquired three top-tier flatbed and specialized carriers of scale.

 

Full Year 2017 Highlights vs. 2016 (where applicable)

·

Total revenue increased 30% to $846.3 million.

·

Net income was  $27.0 million, or $0.59 per share, compared to a net loss of $12.3  million, or $(0.81)  per share.

·

Adjusted EBITDA increased 4% to $91.9 million.

·

Acquired seven companies of scale,  nearly doubling Daseke’s size on an acquisition-adjusted revenue basis.

 

Management Commentary

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

 

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

 

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Fourth Quarter 2017 Financial Results

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

 

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

 

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

 

Full Year 2017 Financial Results

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

 

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

 

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

 

Segment Results

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

 

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

 

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

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

 

2018 Outlook

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

 

Conference Call

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

 

Date: Friday,  March 16, 2018 

Time: 11:00 a.m. Eastern time (10:00 a.m. Central time)

Toll-free dial-in number: 1-855-242-9918

International dial-in number: 1-414-238-9803

Conference ID: 5679584

 

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

 

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

 

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

 

Toll-free replay number: 1-855-859-2056

International replay number: 1-404-537-3406

Replay ID: 5679584

 

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About Daseke, Inc. 

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

 

Use of Non-GAAP Measures

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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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

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Relating to Daseke’s Business and Industry,” and Daseke’s Current Report on Form 8-K/A, filed with the SEC on March 16, 2017, and amended on May 4, 2017.

Investor Relations:

Liolios Group 

Cody Slach or Sean Mansouri

Tel 1-949-574-3860

DSKE@liolios.com

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Daseke, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

    

2017

    

2016

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,679 

 

$

3,695 

 

Accounts receivable, net

 

 

127,368 

 

 

54,177 

 

Drivers’ advances and other receivables

 

 

4,792 

 

 

2,632 

 

Current portion of net investment in sales-type leases

 

 

10,979 

 

 

3,516 

 

Parts supplies

 

 

4,653 

 

 

1,467 

 

Income tax receivable

 

 

91 

 

 

719 

 

Prepaid and other current assets

 

 

28,149 

 

 

13,504 

 

Total current assets

 

 

266,711 

 

 

79,710 

 

Property and equipment, net

 

 

429,639 

 

 

318,747 

 

Intangible assets, net

 

 

93,120 

 

 

71,653 

 

Goodwill

 

 

302,702 

 

 

89,035 

 

Other long-term assets

 

 

33,496 

 

 

11,090 

 

Total assets

 

$

1,125,668 

 

$

570,235 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

12,488 

 

$

5,954 

 

Accrued expenses and other liabilities

 

 

25,876 

 

 

16,104 

 

Accrued payroll, benefits and related taxes

 

 

14,004 

 

 

7,835 

 

Accrued insurance and claims

 

 

12,644 

 

 

9,840 

 

Current portion of long-term debt

 

 

43,056 

 

 

52,665 

 

Total current liabilities

 

 

108,068 

 

 

92,398 

 

Line of credit

 

 

4,561 

 

 

6,858 

 

Long-term debt, net of current portion

 

 

569,740 

 

 

208,372 

 

Deferred tax liabilities

 

 

90,434 

 

 

92,815 

 

Other long-term liabilities

 

 

1,632 

 

 

286 

 

Subordinated debt

 

 

— 

 

 

66,443 

 

Total liabilities

 

 

774,435 

 

 

467,172 

 

Commitments and contingencies (Note 17)

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Series A convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized;  650,000 shares issued with liquidation preference of $65,000 at December 31, 2017

 

 

65,000 

 

 

— 

 

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

 

 

— 

 

 

 

Common stock (par value $0.0001 per share); 250,000,000 shares authorized, 48,712,288 and 20,980,961 shares issued and outstanding at December 31, 2017 and 2016, respectively

 

 

 

 

 

Additional paid-in-capital

 

 

277,931 

 

 

117,806 

 

Retained earnings (accumulated deficit)

 

 

7,338 

 

 

(14,694)

 

Accumulated other comprehensive income (loss)

 

 

959 

 

 

(52)

 

Total stockholders’ equity

 

 

351,233 

 

 

103,063 

 

Total liabilities and stockholders’ equity

 

$

1,125,668 

 

$

570,235 

 

 

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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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended December 31,

 

Years Ended December 31,

 

 

    

2017

    

2016

    

2017

    

2016

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

186,310 

 

$

119,395 

 

$

632,764 

 

$

517,861 

 

Brokerage

 

 

37,220 

 

 

19,051 

 

 

120,943 

 

 

87,410 

 

Logistics

 

 

11,503 

 

 

 

 

 

22,074 

 

 

 

 

Fuel surcharge

 

 

22,192 

 

 

11,970 

 

 

70,523 

 

 

46,531 

 

Total revenue

 

 

257,225 

 

 

150,416 

 

 

846,304 

 

 

651,802 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and employee benefits

 

 

76,734 

 

 

47,929 

 

 

249,996 

 

 

197,789 

 

Fuel

 

 

29,326 

 

 

17,789 

 

 

93,749 

 

 

66,865 

 

Operations and maintenance

 

 

31,067 

 

 

23,167 

 

 

118,390 

 

 

96,100 

 

Communications

 

 

653 

 

 

410 

 

 

2,145 

 

 

1,618 

 

Purchased freight

 

 

76,310 

 

 

33,553 

 

 

225,254 

 

 

154,054 

 

Administrative expenses

 

 

9,214 

 

 

7,539 

 

 

33,233 

 

 

25,250 

 

Sales and marketing

 

 

539 

 

 

462 

 

 

1,965 

 

 

1,743 

 

Taxes and licenses

 

 

3,200 

 

 

2,276 

 

 

11,055 

 

 

9,222 

 

Insurance and claims

 

 

8,446 

 

 

5,466 

 

 

23,962 

 

 

19,114 

 

Acquisition-related transaction expenses

 

 

1,122 

 

 

7 

 

 

3,377 

 

 

25 

 

Depreciation and amortization

 

 

23,105 

 

 

16,985 

 

 

76,863 

 

 

67,500 

 

Gain on disposition of revenue property and equipment

 

 

(187)

 

 

(273)

 

 

(700)

 

 

(116)

 

Impairment

 

 

 

 

 

810 

 

 

 

 

 

2,005 

 

Total operating expenses

 

 

259,529 

 

 

156,120 

 

 

839,289 

 

 

641,169 

 

Income from operations

 

 

(2,304) 

 

 

(5,704)

 

 

7,015 

 

 

10,633 

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(269)

 

 

(3)

 

 

(398)

 

 

(44)

 

Interest expense

 

 

8,492 

 

 

5,603 

 

 

29,556 

 

 

23,124 

 

Write-off of unamortized deferred financing fees

 

 

— 

 

 

 

 

 

3,883 

 

 

— 

 

Other

 

 

(492)

 

 

(66)

 

 

(740)

 

 

(331)

 

Total other expense

 

 

7,731 

 

 

5,534 

 

 

32,301 

 

 

22,749 

 

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

 

 

(10,035)

 

 

(11,238)

 

 

(25,286)

 

 

(12,116)

 

Provision (benefit) for income taxes

 

 

(48,834)

 

 

(445)

 

 

(52,282)

 

 

163 

 

Net income (loss)

 

 

38,799 

 

 

(10,793)

 

 

26,996 

 

 

(12,279)

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized income on interest rate swaps

 

 

— 

 

 

63 

 

 

52 

 

 

62 

 

Foreign currency translation adjustments, net of $517 tax expense

 

 

452 

 

 

 

 

 

959 

 

 

— 

 

Comprehensive income (loss)

 

 

39,251 

 

 

(10,730)

 

 

28,007 

 

 

(12,217)

 

Net income (loss)

 

 

38,799 

 

 

(10,793)

 

 

26,996 

 

 

(12,279)

 

Less dividends to Series A convertible preferred stockholders

 

 

(1,240)

 

 

 

 

 

(4,158)

 

 

— 

 

Less dividends to Series B convertible preferred stockholders

 

 

— 

 

 

(1,041)

 

 

(806)

 

 

(4,770)

 

Net income (loss) attributable to common stockholders

 

$

37,559 

 

$

(11,834)

 

$

22,032 

 

$

(17,049)

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.82 

 

$

(0.57)

 

$

0.59 

 

$

(0.81)

 

Diluted

 

$

0.62 

 

$

(0.57)

 

$

0.56 

 

$

(0.81)

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

45,906,251 

 

 

20,980,961 

 

 

37,592,549 

 

 

20,980,961 

 

Diluted

 

 

60,987,112 

 

 

20,980,961 

 

 

39,593,701 

 

 

20,980,961 

 

Dividends declared per Series A convertible preferred share

 

$

1.91 

 

$

 

 

$

6.40 

 

$

 

 

Dividends declared per Series B convertible preferred share

 

$

 

 

$

18.75 

 

$

12.50 

 

$

18.75 

 

Page 9 of 15


 

 

 

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Daseke, Inc. and Subsidiaries

Supplemental Information: Flatbed Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended December 31,

 

 

 

 

 

 

 

2017

 

2016

 

Increase (Decrease)

 

(Dollars in thousands)

    

$

    

%

    

$

    

%

    

$

    

%

 

REVENUE(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

75,922 

 

75.7 

 

$

58,969 

 

80.5 

 

$

16,953 

 

28.7 

 

Brokerage

 

 

12,903 

 

12.9 

 

 

7,263 

 

9.9 

 

 

5,640 

 

77.7 

 

Logistics

 

 

192 

 

0.2 

 

 

— 

 

 

*  

 

192 

 

 

*

Fuel surcharge

 

 

11,295 

 

11.3 

 

 

7,039 

 

9.6 

 

 

4,256 

 

60.5 

 

Total revenue

 

 

100,312 

 

100.0 

 

 

73,271 

 

100.0 

 

 

27,041 

 

36.9 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

96,807 

 

96.5 

 

 

71,669 

 

97.8 

 

 

25,138 

 

35.1 

 

Operating ratio

 

 

96.5 

%  

 

 

 

97.8 

%  

 

 

 

 

 

 

 

Adjusted operating rati

 

 

95.8 

%  

 

 

 

97.1 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

3,505 

 

3.5 

 

$

1,602 

 

2.2 

 

$

1,903 

 

118.8 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

40,637,705 

 

 

 

 

35,169,265 

 

 

 

 

5,468,440 

 

15.5 

 

Company-operated tractors, as of year-end

 

 

1,155 

 

 

 

 

1,203 

 

 

 

 

(48)

 

(4.0)

 

Owner-operated tractors, as of year-end

 

 

1,392 

 

 

 

 

390 

 

 

 

 

1,002 

 

256.9 

 

Number of trailers, as of year-end

 

 

4,573 

 

 

 

 

2,943 

 

 

 

 

1,630 

 

55.4 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-operated tractors, average for the year

 

 

1,149 

 

 

 

 

1,209 

 

 

 

 

(60)

 

(5.0)

 

Owner-operated tractors, average for the year

 

 

778 

 

 

 

 

396 

 

 

 

 

382 

 

96.5 

 


*      indicates not meaningful.

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

Page 10 of 15


 

 

 

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Daseke, Inc. and Subsidiaries

Supplemental Information: Flatbed Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

 

 

 

 

 

2017

 

2016

 

Increase (Decrease)

 

(Dollars in thousands)

    

$

    

%

    

$

    

%

    

$

    

%

 

REVENUE(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

276,592

 

78.1

 

$

253,824 

 

81.8

 

$

22,768

 

9.0

 

Brokerage

 

 

40,882

 

11.5

 

 

29,745 

 

9.6

 

 

11,137

 

37.4

 

Logistics

 

 

192

 

0.1

 

 

— 

 

 

*  

 

192

 

 

*

Fuel surcharge

 

 

36,440

 

10.3

 

 

26,871 

 

8.7

 

 

9,569

 

35.6

 

Total revenue

 

 

354,106

 

100.0

 

 

310,440 

 

100.0

 

 

43,666

 

14.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

335,645

 

94.8

 

 

294,797 

 

95.0

 

 

40,848

 

13.9

 

Operating ratio

 

 

94.8

%  

 

 

 

95.0 

%  

 

 

 

 

 

 

 

Adjusted operating ratio

 

 

93.8

%  

 

 

 

93.4 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

18,461

 

5.2

 

$

15,643 

 

5.0

 

$

2,818

 

18.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

152,956,123

 

 

 

 

149,284,755 

 

 

 

 

3,671,368

 

2.5

 

Company-operated tractors, as of year-end

 

 

1,155

 

 

 

 

1,203 

 

 

 

 

(48)

 

(4.0)

 

Owner-operated tractors, as of year-end

 

 

1,392

 

 

 

 

390 

 

 

 

 

1,002

 

256.9

 

Number of trailers, as of year-end

 

 

4,573

 

 

 

 

2,943 

 

 

 

 

1,630

 

55.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-operated tractors, average for the year

 

 

1,156

 

 

 

 

1,182 

 

 

 

 

(26)

 

(2.2)

 

Owner-operated tractors, average for the year

 

 

535

 

 

 

 

430 

 

 

 

 

105

 

24.4

 


*      indicates not meaningful.

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

 

Page 11 of 15


 

 

 

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Daseke, Inc. and Subsidiaries

Supplemental Information: Specialized Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended December 31,

 

 

 

 

 

 

 

2017

 

2016

 

Increase (Decrease)

 

(Dollars in thousands)

    

$

    

%

    

$

    

%

    

$

    

%

 

REVENUE(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

112,024 

 

70.5 

 

$

61,480 

 

78.5 

 

$

50,544 

 

82.2 

 

Brokerage

 

 

24,405 

 

15.4 

 

 

11,805 

 

15.1 

 

 

12,600 

 

106.7 

 

Logistics

 

 

11,323 

 

7.1 

 

 

 

 

 

*  

 

11,323 

 

 

*

Fuel surcharge

 

 

11,094 

 

7.0 

 

 

5,062 

 

6.5 

 

 

6,032 

 

119.2 

 

Total revenue

 

 

158,846 

 

100.0 

 

 

78,347 

 

100.0 

 

 

80,499 

 

102.7 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

156,256 

 

98.4 

 

 

76,758 

 

98.0 

 

 

79,498 

 

103.6 

 

Operating ratio

 

 

98.4 

%  

 

 

 

98.0 

%  

 

 

 

 

 

 

 

Adjusted operating ratio

 

 

97.5 

%  

 

 

 

96.6 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

2,590 

 

1.6 

 

$

1,589 

 

2.0 

 

$

1,001 

 

63.0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

42,825,390 

 

 

 

 

23,431,447 

 

 

 

 

19,393,943 

 

82.8 

 

Company-operated tractors, as of year-end

 

 

2,063 

 

 

 

 

1,101 

 

 

 

 

962 

 

87.4 

 

Owner-operated tractors, as of year-end

 

 

664 

 

 

 

 

219 

 

 

 

 

445 

 

203.2 

 

Number of trailers, as of year-end

 

 

6,664 

 

 

 

 

3,404 

 

 

 

 

3,260 

 

95.8 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-operated tractors, average for the year

 

 

1,828 

 

 

 

 

1,117 

 

 

 

 

711 

 

63.7 

 

Owner-operated tractors, average for the year

 

 

525 

 

 

 

 

223 

 

 

 

 

302 

 

135.4 

 


*      indicates not meaningful.

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

 

Page 12 of 15


 

 

 

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Daseke, Inc. and Subsidiaries

Supplemental Information: Specialized Solutions

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

 

 

 

 

 

2017

 

2016

 

Increase (Decrease)

 

(Dollars in thousands)

    

$

    

%

    

$

    

%

    

$

    

%

    

REVENUE(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight

 

$

362,277 

 

72.6 

 

$

268,121 

 

77.5 

 

$

94,156 

 

35.1 

 

Brokerage

 

 

80,225 

 

16.1 

 

 

57,791 

 

16.7 

 

 

22,434 

 

38.8 

 

Logistics

 

 

21,940 

 

4.4 

 

 

 

 

 

*  

 

21,940 

 

 

*

Fuel surcharge

 

 

34,690 

 

7.0 

 

 

20,086 

 

5.8 

 

 

14,604 

 

72.7 

 

Total revenue

 

 

499,132 

 

100.0 

 

 

345,998 

 

100.0 

 

 

153,134 

 

44.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

483,787 

 

96.9 

 

 

329,720 

 

95.3 

 

 

154,067 

 

46.7 

 

Operating ratio

 

 

96.9 

%  

 

 

 

95.3 

%  

 

 

 

 

 

 

 

Adjusted operating ratio(2)

 

 

95.1 

%  

 

 

 

93.4 

%  

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

$

15,345 

 

3.1 

 

$

16,278 

 

4.7 

 

$

(933)

 

(5.7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total miles

 

 

137,793,272 

 

 

 

 

97,704,619 

 

 

 

 

40,088,653 

 

41.0 

 

Company-operated tractors, as of year-end

 

 

2,063 

 

 

 

 

1,101 

 

 

 

 

962 

 

87.4 

 

Owner-operated tractors, as of year-end

 

 

664 

 

 

 

 

219 

 

 

 

 

445 

 

203.2 

 

Number of trailers, as of year-end

 

 

6,664 

 

 

 

 

3,404 

 

 

 

 

3,260 

 

95.8 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-operated tractors, average for the year

 

 

1,488 

 

 

 

 

1,097 

 

 

 

 

391 

 

35.6 

 

Owner-operated tractors, average for the year

 

 

353 

 

 

 

 

236 

 

 

 

 

117 

 

49.6 

 


*      indicates not meaningful.

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

Page 13 of 15


 

 

 

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Daseke, Inc. and Subsidiaries

Reconciliation of Non-GAAP Measures

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31,

 

Year Ended December 31,

 

 

 

2017

 

2016

 

2017

 

2016

 

 

    

 

    

 

    

 

    

 

 

Net income (loss)

 

$

38,799 

 

$

(10,793)

 

$

26,996 

 

$

(12,279)

 

Depreciation and amortization

 

 

23,105 

 

 

16,985 

 

 

76,863 

 

 

67,500 

 

Interest income

 

 

(269)

 

 

(4)

 

 

(398)

 

 

(44)

 

Interest expense

 

 

8,492 

 

 

5,603 

 

 

29,556 

 

 

23,124 

 

Write-off of unamortized deferred financing fees

 

 

— 

 

 

— 

 

 

3,883 

 

 

— 

 

Income tax provision (benefit)

 

 

(48,834)

 

 

(445)

 

 

(52,282)

 

 

163 

 

Acquisition-related transaction expenses

 

 

1,122 

 

 

 

 

3,377 

 

 

296 

 

Impairment

 

 

— 

 

 

810 

 

 

— 

 

 

2,005 

 

Stock-based compensation expense

 

 

674 

 

 

— 

 

 

1,875 

 

 

— 

 

Withdrawn initial public offering-related expenses

 

 

— 

 

 

 

 

— 

 

 

3,051 

 

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

 

 

— 

 

 

— 

 

 

— 

 

 

718 

 

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

 

 

— 

 

 

— 

 

 

— 

 

 

190 

 

Expenses related to the Business Combination and related transactions

 

 

— 

 

 

3,172 

 

 

2,034 

 

 

3,516 

 

Tractor operating lease charges

 

 

4,499 

 

 

3,613 

 

 

16,865 

 

 

12,937 

 

Adjusted EBITDAR

 

$

27,588 

 

$

18,949 

 

$

108,769 

 

$

101,177 

 

Less tractor operating lease charges

 

 

(4,499)

 

 

(3,613)

 

 

(16,865)

 

 

(12,937)

 

Adjusted EBITDA

 

$

23,089 

 

$

15,336 

 

$

91,904 

 

$

88,240 

 

Net capital expenditures

 

 

(11,994)

 

 

(433)

 

 

(35,916)

 

 

(31,669)

 

Free cash flow

 

$

11,095 

 

$

14,903 

 

$

55,988 

 

$

56,571 

 

 

Page 14 of 15


 

 

 

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Daseke, Inc. and Subsidiaries

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

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31,

 

Year Ended December 31,

 

(Dollars in thousands)

    

2017

    

2016

    

2017

    

2016

 

Total revenue(1)

 

$

100,312 

 

$

73,271 

 

$

354,106 

 

$

310,440 

 

Fuel surcharge

 

 

11,295 

 

 

7,039 

 

 

36,440 

 

 

26,871 

 

Operating revenue, net of fuel surcharge

 

$

89,017 

 

$

66,232 

 

$

317,666 

 

$

283,569 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses(1)

 

$

96,806 

 

$

71,669 

 

$

335,645 

 

$

294,797 

 

Fuel surcharge

 

 

11,295 

 

 

7,039 

 

 

36,440 

 

 

26,871 

 

Net impact of step-up in basis of acquired assets

 

 

203 

 

 

334 

 

 

1,091 

 

 

3,169 

 

Adjusted operating expenses

 

$

85,308 

 

$

64,296 

 

$

298,114 

 

$

264,757 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating ratio

 

 

96.5 

%  

 

97.8 

%  

 

94.8 

%  

 

95.0 

%

Adjusted operating ratio

 

 

95.8 

%  

 

97.1 

%  

 

93.8 

%  

 

93.4 

%


(1)

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

 

Daseke, Inc. and Subsidiaries

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

(Unaudited)

 

 

 

Quarter Ended December 31,

 

Year Ended December 31,

 

(Dollars in thousands)

    

2017

    

2016

    

2017

    

2016

 

Total revenue(1)

 

$

158,846

 

$

78,347

 

$

499,132

 

$

345,998

 

Fuel surcharge

 

 

11,094

 

 

5,062

 

 

34,690

 

 

20,086

 

Operating revenue, net of fuel surcharge

 

$

147,752

 

$

73,285

 

$

464,442

 

$

325,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses(1)

 

$

156,254

 

$

76,758

 

$

483,787

 

$

329,720

 

Fuel surcharge

 

 

11,094

 

 

5,062

 

 

34,690

 

 

20,086

 

Impairment

 

 

— 

 

 

810

 

 

— 

 

 

2,005

 

Net impact of step-up in basis of acquired assets

 

 

1,065

 

 

93

 

 

7,265

 

 

3,169

 

Adjusted operating expenses

 

$

144,095

 

$

70,793

 

$

441,832

 

$

304,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating ratio

 

 

98.4

%  

 

98.0 

%  

 

96.9 

%  

 

95.3 

%

Adjusted operating ratio

 

 

97.5

%  

 

96.6 

%  

 

95.1 

%  

 

93.4 

%


(1)

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

Page 15 of 15