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CST: 20/08/2019 05:34:25   

Daseke Reports Revenue Increase of 91% for 2018

164 Days ago

ADDISON, Texas, March 08, 2019 (GLOBE NEWSWIRE) -- Daseke, Inc. (NASDAQ: DSKE, DSKEW) (or the “Company”), the largest flatbed, specialized transportation and logistics solutions company in North America, today reported financial results for the fourth quarter and full year ended December 31, 2018, and reaffirmed its 2019 financial outlook.

Fourth Quarter 2018 Summary vs. Fourth Quarter 2017

  • Revenue increased 74% to a record $447.0 million (up 13% on an Acquisition Adjusted1 basis).
  • Net loss was $20.1 million, or $0.31 per share, basic and diluted ($0.33 net loss per share attributable to common stockholders, basic and diluted), compared to net income of $38.8 million, or $0.84 basic and $0.64 diluted per share ($0.82 basic and $0.62 diluted net income per share attributable to common stockholders).
  • Adjusted Net Income2 for the fourth quarter 2018 was $3.4 million, or $0.05 per share, compared to Adjusted Net Loss2 of $2.4 million, or $0.05 per share.
  • Adjusted EBITDA3 increased 73% to $39.9 million (Acquisition Adjusted EBITDA1,3 up 7%). This represents the fifth consecutive quarter that year-over-year Adjusted EBITDA3 growth has exceeded 50%.

Full Year 2018 Summary vs. Full Year 2017

  • Revenue increased 91% to a record $1.6 billion (up 14% on an Acquisition Adjusted1 basis).
  • Net loss was $5.2 million, or $0.08 per share, basic and diluted ($0.16 net loss per share attributable to common stockholders basic and diluted), compared to net income of $27.0 million, or $0.72 basic and $0.68 diluted per share ($0.59 basic and $0.56 diluted net income per share attributable to common stockholders).
  • Adjusted Net Income2 for 2018 was $39.5 million, or $0.64 per share, compared to Adjusted Net Income2 of $1.4 million, or $0.04 per share.
  • Adjusted EBITDA3 increased 90% to $174.3 million (Acquisition Adjusted EBITDA1,3 up 14%).

“As communicated in our recent pre-announcement, revenue and Adjusted EBITDA for the fourth quarter and full year 2018 met our expectations and resulted in another record year for the company,” said Don Daseke, chairman and CEO. “Our results show the power of the platform we have built and our ability to drive organic growth.”

“Over the course of the last decade we have successfully executed on our strategy of building scale across the organization. Today, we are the market leader with plenty of runway for growth and have consistently produced results aligned with our outlook,” Daseke continued, “I truly believe that we have only scratched the surface of our potential and I am excited for what the next decade will bring.”

Scott Wheeler, president and director added, “In 2018 we exceeded revenue and Adjusted EBITDA expectations, delivered exceptional organic growth and completed several great acquisitions. Our strategic plan for 2019 will be focused on driving continued organic growth, free cash flow generation and reducing net financial leverage. We expect to achieve this by maximizing the existing infrastructure we have built, controlling costs, taking advantage of our scale, and ensuring that we have the people, processes and systems to succeed. I am confident in the organization’s ability to successfully execute on our strategic plan and I look forward to this next stage of growth.”

___________________________
1 See Non-GAAP Measures for more information regarding Acquisition Adjusted measures.
2 See Non-GAAP Measures for more information regarding Adjusted Net Income (Loss) measures.
3 See Non-GAAP Measures for more information regarding Adjusted EBITDA measures.

Fourth Quarter 2018 Financial Results

Revenue in the fourth quarter of 2018 increased 74% to $447.0 million compared to $257.2 million in the year-ago quarter. The increase was largely driven by four acquisitions made in 2018 and strong organic growth, with revenue on an Acquisition Adjusted1 basis up 13%.

Operating loss in the fourth quarter of 2018 was $8.3 million compared to a loss of $2.3 million in the year-ago quarter. Included in operating expenses for the fourth quarter of 2018 is $7.7 million of depreciation expense related to the net impact of the step-up in basis of acquired assets, $4.5 million for the amortization of intangibles and $11.1 million for the write-down of goodwill, for a total non-cash impact of $23.3 million.

Net loss for the fourth quarter of 2018 was $20.1 million, or $0.31 per share, compared to net income of $38.8 million, or $0.84 per share, in the year-ago quarter. Adjusted Net Income2, which is adjusted for acquisition or business combination related transaction expenses, non-cash asset impairments, amortization of intangible assets, the net impact of step-up in basis of acquired assets and the impact of the Tax Cuts and Jobs Act, was $3.4 million, compared to an Adjusted Net Loss2 of $1.4 million in the fourth quarter of 2017.

Adjusted EBITDA3 in the fourth quarter of 2018 increased 73% to $39.9 million compared to $23.1 million in the fourth quarter of 2017. Acquisition Adjusted EBITDA1,3 increased 7% to $39.9 million compared to $37.2 million in the fourth quarter of 2017.

Full Year 2018 Financial Results

Revenues in 2018 increased 91% to $1.6 billion compared to $846.3 million in 2017. The strong revenue growth was driven by the full benefit of the acquisitions completed in 2017, four acquisitions made in 2018 and strong organic growth with revenue on an Acquisition Adjusted1 basis up 14%.

Operating income increased significantly in 2018 to $21.9 million, up 212% from $7.0 million in 2017. Included in operating expenses for 2018 was $24.1 million of depreciation expense related to the net impact of the step-up in basis of acquired assets, $16.6 million for the amortization of intangibles and $13.9 million for the write-down of goodwill and intangibles, for a total non-cash impact of $54.6 million.

Net loss for 2018 was $5.2 million, or $0.08 per share, compared to net income of $27.0 million, or $0.72 per share, in 2017.  Adjusted Net Income2, which is adjusted for acquisition or business combination related transaction expenses, non-cash asset impairments, amortization of intangible assets, the net impact of step-up in basis of acquired assets and the impact of the Tax Cuts and Jobs Act, was $39.5 million, compared to an Adjusted Net Income2 of $1.4 million in 2017.

Adjusted EBITDA3 in 2018 increased 90% to $174.3 million compared to $91.9 million in 2017.  Acquisition Adjusted EBITDA1,3 increased 14% to $190.4 million compared to $166.3 million in 2017.

Segment Results

Flatbed Solutions - Flatbed Solutions revenue4 in the fourth quarter of 2018 increased 73% to $173.3 million4 compared to $100.3 million in the year-ago quarter. Operating income in the fourth quarter of 2018 was $4.5 million, up 27% from $3.5 million in the year-ago quarter. Adjusted EBITDA3 in the fourth quarter of 2018 increased 38% to $15.2 million compared to $11.0 million in the year-ago quarter. Rate per mile in the fourth quarter of 2018 was up 5% to $1.96, while flatbed revenue per tractor increased 5% to $41,800.

In 2018, Flatbed Solutions revenue4 increased 87% to $662.0 million compared to $354.1 million in 2017. Operating income in 2018 increased 78% to $32.9 million compared to $18.5 million in 2017. Adjusted EBITDA3 in 2018 increased 45% to $70.2 million compared to $48.3 million in 2017.

Specialized Solutions - Specialized Solutions revenue4 in the fourth quarter of 2018 increased 75% to $277.9 million4 compared to $158.8 million in the year-ago quarter. Operating loss in the fourth quarter of 2018 was $1.0 million compared to operating income of $2.6 million in the year-ago quarter. Adjusted EBITDA3 in the fourth quarter of 2018 increased 95% to $36.6 million compared to $18.8 million in the year-ago quarter. Rate per mile in the fourth quarter of 2018 was up 38% to $3.60 while revenue per tractor increased 31% to $63,000.

In 2018, Specialized Solutions revenue4 increased 93% to $965.1 million compared to $499.1 million in 2017. Operating income in 2018 increased 50% to $23.1 million, compared to $15.3 million in 2017. Adjusted EBITDA3 in 2018 increased 110% to $134.6 million compared to $64.0 million in 2017.

Balance Sheet

At December 31, 2018, Daseke had cash and equivalents of $46.0 million, $87.8 million available under its revolving credit facility, net debt of $656.4 million and total liquidity available of $133.8 million. Additionally, at the end of 2018, working capital, excluding cash and acquisition-related earn-out liabilities, totaled $89.4 million, which was up 32% or $21.4 million versus the end of 2017. This compares to total revenue growth of 91% during the year.

2019 Outlook

In 2019, Daseke expects revenue to range between $1.8-$1.9 billion, up 12%-18% compared to $1.6 billion in 2018. Adjusted EBITDA3 is anticipated to range between $200-$210 million, up 15%-20% compared to $174.3 million in 2018, and compared to 2018 Acquisition Adjusted EBITDA1,3 of $190.4 million.

Net capital expenditures are anticipated to range between $65-$70 million compared to $121 million in 2018. The Company anticipates that approximately 70% of capital expenditures in 2019 will be invested in the first two quarters of the year.

By the end of 2019, leverage (as defined in the Company’s debt agreements) is expected to decline to a multiple of approximately 2.9 times Adjusted EBITDA (as defined in the Company’s debt agreements). Please see the table at the end of this press release for a detailed view of the Company’s 2019 outlook.

___________________________
4 Segment revenues are prior to eliminations.

Conference Call

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

Date: Friday, March 8, 2019
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: 8786319

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. 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 March 22, 2019.

Toll-free replay number: 1-855-859-2056
International replay number: 1-404-537-3406
Replay ID: 8786319

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 Net Income (Loss), and Acquisition Adjusted, revenue, net loss and EBITDA (Acquisition Adjusted Measures). Other companies in Daseke’s industry may define these non‐GAAP measures differently than Daseke does, and as a result, it may be difficult to use these non‐GAAP measures to compare the performance of those companies to Daseke’s performance. Daseke’s management does not consider these non‐GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP and instead relies primarily on Daseke’s GAAP results and uses non‐GAAP measures supplementally.

Daseke defines Adjusted EBITDA as net income (loss) plus (i) depreciation and amortization, (ii) interest expense, including other fees and charges associated with indebtedness, net of interest income, (iii) income taxes, (iv) acquisition‐related transaction expenses (including due diligence costs, legal, accounting and other advisory fees and costs, retention and severance payments and financing fees and expenses), (v) stock‐based compensation, (vi) non‐cash impairments, and (vii) expenses related to the business combination that was consummated in February 2017 and related transactions.

Daseke defines Adjusted Net Income (Loss) as net income (loss) adjusted for acquisition or business combination related transaction expenses, non-cash asset impairments, amortization of intangible assets, the net impact of step-up in basis of acquired assets and the impact of the revaluation of deferred taxes due to the tax rate change in the Tax Cuts and Jobs Act.

Daseke defines Acquisition Adjusted Measures 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 results 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’s board of directors and executive management team use Adjusted EBITDA, Adjusted Net Income(Loss) and Acquisition Adjusted Measures as key measures of its performance and for business planning.

Adjusted EBITDA, Adjusted Net Income (Loss)  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 Net Income (Loss) 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 Net Income (Loss) 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 Net Income(Loss) 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 Net Income(Loss) and Acquisition Adjusted Measures. Certain items excluded from Adjusted EBITDA, Adjusted Net Income(Loss) 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 Net Income(Loss) and Acquisition Adjusted Measures should not be considered measures of the income generated by Daseke’s business or discretionary cash available to it to invest in the growth of its business.

You can find the reconciliation of these non‐GAAP measures to the nearest comparable GAAP measures in the Reconciliation of Non‐GAAP Measures tables below. We have not reconciled non‐GAAP forward looking measures to their corresponding GAAP measures because certain items that impact these measures are unavailable or cannot be reasonably predicted without unreasonable efforts.

Forward‐Looking Statements

This news release includes “forward‐looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward‐looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” “will” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Projected financial information, including our guidance outlook, are forward-looking statements. These forward‐looking statements are based on current information and expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward‐looking statements should not be relied upon as representing Daseke’s views as of any subsequent date, and we do not undertake any obligation to update forward‐looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward‐looking statements. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward‐looking statements. Some factors that could cause actual results to differ include, but are not limited to, general economic and business risks (such as downturns in customers’ business cycles and disruptions in capital and credit markets), driver shortages and increases in driver compensation or owner‐operator contracted rates, loss of senior management or key operating personnel, Daseke’s ability to recognize the anticipated benefits of recent acquisitions, including the Aveda transaction, its ability to identify and execute future acquisitions successfully, seasonality and the impact of weather and other catastrophic events, fluctuations in the price or availability of diesel fuel, increased prices for, or decreases in the availability of, new revenue equipment and decreases in the value of used revenue equipment, Daseke’s ability to generate sufficient cash to service all of its indebtedness, restrictions in its existing and future debt agreements, increases in interest rates, changes in existing laws or regulations, including environmental and worker health safety laws and regulations and those relating to tax rates or taxes in general, the impact of governmental regulations and other governmental actions related to Daseke and its operations, litigation and governmental proceedings, and insurance and claims expenses. For additional information regarding known material factors that could cause our actual results to differ from those expressed in forward‐looking statements, please see Daseke’s filings with the Securities and Exchange Commission, available at www.sec.gov, including those described under “Risk Factors” In its annual report on Form 10-K.

Investor Relations:

Liolios Group
Cody Slach
Tel 1-949-574-3860
DSKE@liolios.com

 
 
Daseke, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)
   
  December 31,   December 31,
  2018   2017
ASSETS          
Current assets:          
Cash and cash equivalents $   45,974     $   90,679
Accounts receivable, net     209,206         127,368
Drivers’ advances and other receivables     5,461         4,792
Current portion of net investment in sales-type leases     16,213         10,979
Parts supplies     4,914         4,653
Prepaid and other current assets     26,282         28,240
Total current assets     308,050         266,711
Property and equipment, net     572,719         429,639
Intangible assets, net     208,791         93,120
Goodwill     258,365         302,702
Other long-term assets     42,943         33,496
Total assets $ 1,390,868     $ 1,125,668
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable $   22,160     $   12,488
Accrued expenses and other liabilities     46,542         25,876
Accrued payroll, benefits and related taxes     21,698         14,004
Accrued insurance and claims     18,059         12,644
Current portion of long-term debt     63,535         43,056
Other current liabilities     21,865         —
Total current liabilities     193,859         108,068
Line of credit     —         4,561
Long-term debt, net of current portion     622,650         569,740
Deferred tax liabilities     126,830         90,434
Other long-term liabilities     531         1,632
Total liabilities     943,870         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 December 31, 2018 and 2017, respectively     65,000         65,000
Common stock (par value $0.0001 per share); 250,000,000 shares authorized, 64,455,174 and 48,712,288 shares issued and outstanding at December 31, 2018 and 2017, respectively     6         5
Additional paid-in-capital     433,867         277,931
Retained earnings (accumulated deficit)     (51,005 )       7,338
Accumulated other comprehensive income (loss)     (870 )       959
Total stockholders’ equity     446,998         351,233
Total liabilities and stockholders’ equity $ 1,390,868     $ 1,125,668
           

 

 
Daseke, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(In thousands, except share and per share data)
                       
  Three Months Ended       Year Ended
  December 31,    December 31,
  2018
  2017
  2018   2017
Revenues:                      
Freight $ 320,065     $ 186,310     $ 1,162,193     $ 632,764  
Brokerage   78,005       37,220       266,437       120,943  
Logistics   11,499       11,503       42,764       22,074  
Fuel surcharge   37,444       22,192       141,688       70,523  
Total revenue   447,013       257,225       1,613,082       846,304  
Operating expenses:                      
Salaries, wages and employee benefits   119,694       75,743       407,429       249,996  
Fuel   37,431       29,326       141,097       93,749  
Operations and maintenance   55,107       32,058       181,534       118,390  
Communications   908       654       3,334       2,145  
Purchased freight   158,655       76,309       588,603       225,254  
Administrative expenses   17,095       9,214       58,385       33,233  
Sales and marketing   1,074       540       3,369       1,965  
Taxes and licenses   4,909       3,200       17,174       11,055  
Insurance and claims   13,476       8,446       45,826       23,962  
Acquisition-related transaction expenses   242       1,122       2,684       3,377  
Depreciation and amortization   37,334       23,105       131,082       76,863  
Gain on disposition of revenue property and equipment   (1,691 )     (187 )     (3,236 )     (700 )
Impairment   11,050             13,890        
Total operating expenses   455,284       259,530       1,591,171       839,289  
Income from operations   (8,271 )     (2,305 )     21,911       7,015  
Other expense (income):                      
Interest income   (110 )     (268 )     (1,323 )     (398 )
Interest expense   12,259       8,492       45,505       29,556  
Write-off of unamortized deferred financing fees                     3,883  
Other   1,300       (493 )     (1,162 )     (740 )
Total other expense   13,449       7,731       43,020       32,301  
Income (loss) before provision (benefit) for income taxes   (21,720 )     (10,036 )     (21,109 )     (25,286 )
Provision (benefit) for income taxes   (1,664 )     (48,834 )     (15,922 )     (52,282 )
Net income (loss)   (20,056 )     38,798       (5,187 )     26,996  
Other comprehensive income (loss):                      
Unrealized income on interest rate swaps                     52  
Foreign currency translation adjustments, net of tax expense (benefit) of $(341), $(39), $(487) and $517, respectively   (1,295 )     (73 )     (1,829 )     959  
Comprehensive income (loss)   (21,351 )     38,725       (7,016 )     28,007  
Net income (loss)   (20,056 )     38,798       (5,187 )     26,996  
Less dividends to Series A convertible preferred stockholders   (1,239 )     (1,239 )     (4,956 )     (4,158 )
Less dividends to Series B convertible preferred stockholders                     (806 )
Net income (loss) attributable to common stockholders $ (21,295 )   $ 37,559     $ (10,143 )   $ 22,032  
Net income (loss) per common share:                      
Basic $ (0.33 )   $ 0.82     $ (0.16 )   $ 0.59  
Diluted $ (0.33 )   $ 0.62     $ (0.16 )   $ 0.56  
Weighted-average common shares outstanding:                      
Basic   65,337,726       45,906,251       61,654,820       37,592,549  
Diluted   65,337,726       60,897,112       61,654,820       39,593,701  
Dividends declared per Series A convertible preferred share $ 1.91     $ 1.91     $ 7.63     $ 6.40  
Dividends declared per Series B convertible preferred share $     $     $     $ 12.50  
                       

 

Daseke, Inc. and Subsidiaries
Supplemental Information: Flatbed Solutions
(Unaudited)
(In thousands, except operating statistics data)
                               
    Three Months Ended December 31,           
    2018   2017   Increase   (Decrease)
    $   %   $   %   $   %
                               
REVENUE(1):                              
Freight   $ 124,046   71.6   $ 75,922   75.7   $ 48,124   63.4
Brokerage     28,178   16.3     12,903   12.9     15,275   118.4
Logistics     756   0.4     192   0.2     564   293.8
Fuel surcharge     20,342   11.7     11,295   11.3     9,047   80.1
Total revenue     173,322   100.0     100,312   100.0     73,010   72.8
                               
OPERATING EXPENSES(1):                              
Total operating expenses     168,866   97.4     96,806   96.5     72,060   74.4
Operating ratio     97.4 %         96.5 %              
Adjusted operating ratio     96.4 %         95.8 %              
INCOME FROM OPERATIONS   $ 4,456   2.6   $ 3,506   3.5   $ 950   27.1
                               
OPERATING STATISTICS:                              
Total miles     63,378,975         40,637,705         22,741,270   56.0
Company-operated tractors, at quarter-end     1,374         1,155         219   19.0
Owner-operated tractors, at quarter-end     1,592         1,392         200   14.4
Number of trailers, at quarter-end     5,141         4,573         568   12.4
                               
Company-operated tractors, average for the quarter     1,370         1,149         221   19.2
Owner-operated tractors, average for the quarter     1,600         778         822   105.7
                               
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Flatbed Solutions
(Unaudited)
(In thousands, except operating statistics data)
                               
    Year Ended December 31,           
    2018   2017   Increase   (Decrease)
    $   %   $   %   $   %
                               
REVENUE (1) :                              
Freight   $ 477,722   72.2   $ 276,592   78.1   $ 201,130   72.7
Brokerage     104,184   15.7     40,882   11.5     63,302   154.8
Logistics     2,987   0.5     192   0.1     2,795   *
Fuel surcharge     77,110   11.6     36,440   10.3     40,670   111.6
Total revenue     662,003   100.0     354,106   100.0     307,897   87.0
                               
OPERATING EXPENSES (1) :                              
Total operating expenses     629,085   95.0     335,645   94.8     293,440   87.4
Operating ratio     95.0 %         94.8 %              
Adjusted operating ratio     94.0 %         93.8 %              
INCOME FROM OPERATIONS   $ 32,918   5.0   $ 18,461   5.2   $ 14,457   78.3
                               
OPERATING STATISTICS:                              
Total miles     243,794,226         152,956,123         90,838,103   59.4
Company-operated tractors, at period-end     1,374         1,155         219   19.0
Owner-operated tractors, at period-end     1,592         1,392         200   14.4
Number of trailers, at period-end     5,141         4,573         568   12.4
                               
Company-operated tractors, average for the period     1,205         1,156         49   4.2
Owner-operated tractors, average for the period     1,543         535         1,008   188.4
                               
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Specialized Solutions
(Unaudited)
(In thousands, except operating statistics data)
                               
    Three Months Ended December 31,           
    2018
  2017   Increase   (Decrease)
    $   %   $   %   $   %
                               
REVENUE(1):                              
Freight   $ 199,333   71.7     $ 112,022   70.5   $ 87,311     77.9  
Brokerage     50,269   18.1       24,405   15.4     25,864     106.0  
Logistics     10,799   3.9       11,346   7.1     (547 )   (4.8 )
Fuel surcharge     17,526   6.3       11,070   7.0     6,456     58.3  
Total revenue     277,927   100.0       158,843   100.0     119,084     75.0  
                               
OPERATING EXPENSES(1):                              
Total operating expenses     278,941   100.4       156,254   98.4     122,687     78.5  
Operating ratio     100.4 %         98.4 %              
Adjusted operating ratio     93.6 %         97.5 %              
INCOME FROM OPERATIONS   $ (1,014)   (0.4 )   $ 2,589   1.6   $ (3,603 )   (139.2 )
                               
OPERATING STATISTICS:                              
Total miles     55,403,642         42,825,390         12,578,252     29.4  
Company-operated tractors, at quarter-end     2,511         2,063         448     21.7  
Owner-operated tractors, at quarter-end     670         664         6     0.9  
Number of trailers, at quarter-end     8,683         6,664         2,019     30.3  
                               
Company-operated tractors, average for the quarter     2,483         1,828         655     35.8  
Owner-operated tractors, average for the quarter     683         525         158     30.1  
                               
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Supplemental Information: Specialized Solutions
(Unaudited)
(In thousands, except operating statistics data)
                               
    Year Ended December 31,           
    2018   2017   Increase   (Decrease)
    $   %   $   %   $   %
                               
REVENUE (1) :                              
Freight   $ 696,045   72.1   $ 362,277   72.6   $ 333,768   92.1
Brokerage     163,092   16.9     80,225   16.1     82,867   103.3
Logistics     39,927   4.1     21,940   4.4     17,987   82.0
Fuel surcharge     66,000   6.8     34,690   7.0     31,310   90.3
Total revenue     965,064   100.0     499,132   100.0     465,932   93.3
                               
OPERATING EXPENSES (1) :                              
Total operating expenses     942,013   97.6     483,787   96.9     458,226   94.7
Operating ratio     97.6 %         96.9 %              
Adjusted operating ratio     93.4 %         95.1 %              
INCOME FROM OPERATIONS   $ 23,051   2.4   $ 15,345   3.1   $ 7,706   50.2
                               
OPERATING STATISTICS:                              
Total miles     218,717,604         137,793,272         80,924,332   58.7
Company-operated tractors, as of year-end     2,511         2,063         448   21.7
Owner-operated tractors, as of year-end     670         664         6   0.9
Number of trailers, as of year-end     8,683         6,664         2,019   30.3
                               
Company-operated tractors, average for the year     2,251         1,488         763   51.3
Owner-operated tractors, average for the year     634         353         281   79.6
                               
* indicates not meaningful.
(1) Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.
 

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Adjusted EBITDA
(Unaudited)
(In thousands)
                       
  Three Months Ended December 31,    Year Ended December 31, 
  2018
  2017
  2018
  2017
                       
Net income (loss) $ (20,056 )   $ 38,798     $ (5,187 )   $ 26,996  
Depreciation and amortization   37,334       23,105       131,082       76,863  
Interest income   (110 )     (268 )     (1,323 )     (398 )
Interest expense   12,259       8,492       45,505       29,556  
Write-off of unamortized deferred financing fees                     3,883  
Income tax provision (benefit)   (1,664 )     (48,834 )     (15,922 )     (52,282 )
Acquisition-related transaction expenses   241       1,122       2,684       3,377  
Impairment of goodwill and intangibles   11,050             13,890        
Stock based compensation   869       674       3,585       1,875  
Expenses related to the Business Combination and related transactions                     2,034  
Adjusted EBITDA $   39,923     $   23,089     $   174,314     $   91,904  
                       

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Adjusted EBITDA by Segment
(Unaudited)
(In thousands)
                                               
  Three Months Ended   Three Months Ended
  December 31, 2018   December 31, 2017
  Flatbed   Specialized   Corporate   Consolidated   Flatbed   Specialized   Corporate   Consolidated
Net income (loss) $ 798     $ (16,242 )   $ (4,612 )   $ (20,056 )   $ 13,267     $ 20,691     $ 4,840     $ 38,798  
Corporate allocation   11,084       19,723       (30,807 )           12,316       13,580       (25,896 )      
Income (loss) before corporate allocation   11,882       3,481       (35,419 )     (20,056 )     25,583       34,271       (21,056 )     38,798  
Depreciation and amortization   10,285       26,966       83       37,334       7,254       15,817       34       23,105  
Net interest expense   2,514       3,102       6,533       12,149       1,793       2,410       4,021       8,224  
Provision (benefit) for income taxes   (9,741 )     (8,496 )     16,573       (1,664 )     (23,827 )     (33,983 )     8,976       (48,834 )
Acquisition-related transaction expenses               241       241             8       1,114       1,122  
Impairment of goodwill         11,050             11,050                          
Stock based compensation   222       467       180       869       215       320       139       674  
Adjusted EBITDA before corporate allocation     15,162         36,570         (11,809 )       39,923         11,018         18,843         (6,772 )       23,089  
Less corporate allocation   11,084       19,723       (30,807 )           12,316       13,580       (25,896 )      
Adjusted EBITDA $   4,078     $   16,847     $   18,998     $   39,923     $   (1,298 )   $   5,263     $   19,124     $   23,089  
                                               

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Adjusted EBITDA by Segment
(Unaudited)
(In thousands)
                                               
  Year Ended   Year Ended
  December 31, 2018   December 31, 2017
  Flatbed   Specialized   Corporate   Consolidated   Flatbed   Specialized   Corporate   Consolidated
Net income (loss) $ 21,032     $ 364     $ (26,583 )   $ (5,187 )   $ 19,817     $ 26,814     $ (19,635 )   $ 26,996  
Corporate allocation   11,084       19,723       (30,807 )           12,316       13,580       (25,896 )      
Income (loss) before corporate allocation   32,116       20,087       (57,390 )     (5,187 )     32,133       40,394       (45,531 )     26,996  
Depreciation and amortization   36,099       94,818       165       131,082       29,183       47,531       149       76,863  
Net interest expense   8,295       11,155       24,732       44,182       7,079       8,353       13,726       29,158  
Write-down of deferred financing fees                                       3,883       3,883  
Provision (benefit) for income taxes   (7,221 )     (7,445 )     (1,256 )     (15,922 )     (20,652 )     (33,102 )     1,472       (52,282 )
Acquisition-related transaction expenses   7       30       2,647       2,684             8       3,369       3,377  
Impairment of goodwill and intangibles         13,890             13,890                          
Stock based compensation   929       2,018       638       3,585       610       818       447       1,875  
Merger transaction expenses                                       2,034       2,034  
Adjusted EBITDA before corporate allocation     70,225         134,553         (30,464 )       174,314         48,353         64,002         (20,451 )       91,904  
Less corporate allocation   11,084       19,723       (30,807 )           12,316       13,580       (25,896 )      
Adjusted EBITDA $   59,141     $   114,830     $   343     $   174,314     $   36,037     $   50,422     $   5,445     $   91,904  
                                               

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Acquisition Adjusted EBITDA
(Unaudited)
(In thousands)
                       
  Three Months Ended December 31,    Year Ended December 31, 
  2018
  2017
  2018
  2017
                       
Net income (loss) $ (20,056 )   $ 35,746     $ (6,875 )   $ 31,614  
Depreciation and amortization   37,334       33,692       142,475       129,711  
Net interest expense   12,149       11,542       47,771       40,575  
Write-off of unamortized deferred financing fees                     3,883  
Income tax provision (benefit)   (1,664 )     (45,686 )     (15,458 )     (47,322 )
Acquisition-related transaction expenses   241       1,228       4,149       3,477  
Impairment of goodwill and intangibles   11,050             13,890        
Stock based compensation   869       698       4,413       2,324  
Merger transaction expenses                     2,034  
Acquisition Adjusted EBITDA $   39,923     $   37,220     $   190,365     $   166,296  
                       

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Net income (loss) to Adjusted Net Income (Loss)
(Unaudited)
(In thousands)
                 
    Three Months Ended   Year Ended
    December 31,   December 31,
    2018   2017   2018   2017
                 
Net income (loss)   $     (20,056 )   $     38,798     $     (5,187 )   $     26,996  
Add (deduct):                
Acquisition-related tranaction expenses     241       1,122       2,684       3,377  
Impairment of goodwill and intangibles     11,050       -       13,890       -  
Expenses related to the Business Combination     -       -       -       2,034  
Amortization of intangible assets     4,467       2,046       16,643       6,695  
Net impact of step-up in basis of acquired assets     7,681       1,670       24,095       8,356  
Impact of TCJA(1) tax rate change     -       (46,068 )     (12,611 )     (46,068 )
Adjusted Net Income (Loss)   $     3,383     $     (2,432 )   $     39,514     $     1,390  
                 
(1)  Tax Cuts and Jobs Act
                 

 

 
Daseke, Inc. and Subsidiaries
Reconciliation of Working Capital to Adjusted Working Capital
(Unaudited)
(In thousands)
       
    December 31,
  2018   2017
       
Current assets $ 308,050   $ 266,711
Less: Current liabilities   193,859     108,068
       
Working capital   114,191     158,643
Less: Cash   45,974     90,679
Add: Aveda earn-out liability   21,165     -
       
Adjusted Working Capital $     89,382   $     67,964
       

 

Daseke, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures - Adjusted EBITDA, 2019 Outlook
(Unaudited)
(In thousands)
         
    Year Ended
    December 31, 2019
    Low   High
         
Net loss   $ (17,000 )   $ (9,000 )
Depreciation and amortization     159,000       159,000  
Net interest expense     52,000       52,000  
Provision for income taxes     2,000       4,000  
Acquisition-related transaction expenses     -       -  
Stock based compensation     4,000       4,000  
Adjusted EBITDA   $     200,000     $     210,000  
         
Other items:        
Cash tax expense   $ 2,000      
Preferred dividends   $ 5,000      
Cash interest expense   $ 52,000      
Investment in working capital   $ 9,000      
Net impact of step-up in basis of acquired assets (included in above table)   $ 31,000      
Amortization of intangible assets (included in above table)   $ 18,000      
Assumed Fed Rate increases for interest expense     50bps      
Total tax rate used     25%      
Rate growth assumption     2.5%      
Miles growth assumption     3.2%      

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