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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 (GLOBE NEWSWIRE) -- 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.

/EIN News/ -- 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."

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.

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

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.

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 expenses as a result of acquisitions, non-cash impairments and withdrawn initial public offering-related expenses enhances the comparability of its performance between periods.

Daseke believes its presentation of adjusted operating ratio is useful because it provides investors and industry analysts the same information that Daseke uses internally for purposes of assessing its core operating profitability. However, adjusted operating ratio is not a substitute for, or more meaningful than, operating ratio, operating margin or any other measure derived solely from GAAP measures, and there are limitations to using non-GAAP measures such as adjusted operating ratio. You can find the reconciliation of these non-GAAP measures to the nearest comparable GAAP measures in the Reconciliation of Non-GAAP Measures tables below. We have not reconciled non-GAAP forward looking measures to their corresponding GAAP measures because certain items that impact these measures are unavailable or cannot be reasonably predicted without unreasonable efforts.

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” “will” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements are based on current information and expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to, general economic risks (such as downturns in customers’ business cycles and disruptions in capital and credit markets), driver shortages and increases in driver compensation or owner-operator contracted rates, loss of senior management or key operating personnel, our ability to recognize the anticipated benefits of recent acquisitions, our ability to identify and execute future acquisitions successfully, seasonality and the impact of weather and other catastrophic events, fluctuations in the price or availability of diesel fuel, increased prices for, or decreases in the availability of, new revenue equipment and decreases in the value of used revenue equipment, our ability to generate sufficient cash to service all of our indebtedness, restrictions in our existing and future debt agreements, increases in interest rates, the impact of governmental regulations and other governmental actions related to the company and its operations, litigation and governmental proceedings, and insurance and claims expenses. For additional information regarding known material factors that could cause our actual results to differ from those expressed in forward-looking statements, please see our filings with the Securities and Exchange Commission (the “SEC”), available at www.sec.gov, including Hennessy Capital Acquisition Corp. II’s definitive proxy statement dated February 6, 2017, particularly the section “Risk Factors—Risk Factors Relating to Daseke’s Business and Industry,” and Daseke’s Current Report on Form 8-K/A, filed with the SEC on March 16, 2017, and amended on May 4, 2017.

Investor Relations:

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


 
Daseke, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share data)
             
    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       —       1  
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       5       2  
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  
             

 

 
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  
                       

 

 
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.
 

 

 
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.
 

 

 
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.
 

 

 
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.
 

 

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         7         3,377         296    
Impairment       —         810         —         2,005    
Stock-based compensation expense       674         —         1,875         —    
Withdrawn initial public offering-related expenses       —         1         —         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    
                           

 

 
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.
                         

 

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