Q1 2020 Daseke Inc Earnings Call
Flatbed carrier Daseke Inc. (NASDAQ: DSKE) announced further progress in its restructuring efforts with the planned divestiture of its oil rig transportation company, Aveda Transportation and Energy Services."Our management and board of directors have concluded that the Aveda business is not a long-term fit with the rest of our portfolio, and as a result, we have elected to begin the process to strategically divest this business. Following its conclusion, our Oil and Gas-related business should represent less than 2% of our go-forward revenues," stated CEO Chris Easter in the company's first quarter 2020 earnings release.Daseke acquired Aveda in April 2018.The carrier reported a $0.01 per share first-quarter loss excluding a $13.4 million non-cash impairment charge associated with the removal of the Aveda unit from its portfolio. The adjusted loss also excluded other expenses associated with the transformation of the company. Analysts were forecasting the company to lose $0.07 per share in the quarter.Inclusive of all items, the carrier reported a net loss of $17.3 million, or $0.29 per share.The release stated that the company has completed the first phase of its restructuring plan – estimated to deliver $30 million in annual operating income – and is on track with the second phase, which should deliver an additional $15 million in operating income annually.View more earnings on DSKEDaseke reported a 9.7% year-over-year revenue decline at $391 million. Lower rates per mile and weakness in the end markets the company serves – oil and gas, aerospace, manufacturing and construction – were cited as the reasons."Since the close of the first quarter, we've seen volume level declines in certain end markets due to COVID-19-related impacts, while others remain stable. Most of the end markets that showed decline appear to have plateaued during the back-half of April," Easter continued.Shares of DSKE are up 18% in early trading.The company will hold a conference call to discuss these results with analysts and investors at 11:00 a.m. Eastern time.Key Performance Indicators – DasekeSee more from Benzinga * Daseke Appoints New CFO * Daseke Sees Flatbed Softness Continuing Through First Half Of 2020(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
On its earnings call with analysts and investors, management from Daseke Inc. (NASDAQ: DSKE), the nation's largest flatbed carrier, said that they see "lots of unknowns" when it comes to a rebound in demand. They said that their wind energy and infrastructure customers are doing well and noted that their clients in the automotive industry are expected to come back online soon."Volumes held up well" during the first 11 weeks of the first quarter, yielding to pandemic-related demand erosion in late March. Management said the end markets that saw more notable declines – aerospace and automotive – began to level in the back-half of April. Overall, volumes declined approximately 15% during the downturn, excluding a segment that the company has marked for divestiture, remaining at those levels since.Many end markets that rely on flatbed trucking – oil and gas, aerospace, manufacturing and construction – have been under pressure. FreightWaves' Flatbed Outbound Tender Reject Index (SONAR: FOTRI.USA), a measure of carriers' willingness to accept the loads that are tendered to them by shippers under contract terms and a proxy for flatbed capacity availability, is significantly lower than prior year levels. Flatbed Outbound Tender Reject Index (SONAR: FOTRI.USA)The company reported a $0.01 per share adjusted loss during the first quarter of 2020, better than analysts' forecasts for a $0.07 loss.As part of its restructuring, Daseke announced that it was seeking to exit its 2018 acquisition of Aveda Transportation and Energy Services, an oil rig transportation company."Our management and board of directors have concluded that the Aveda business is not a long-term fit with the rest of our portfolio, and as a result, we have elected to begin the process to strategically divest this business," stated CEO Chris Easter in the company's first quarter 2020 earnings press release.After the company divests Aveda it will have less than 2% exposure to oil and gas end markets, which remain under duress as depressed prices have largely ended the need for exploration, development and production in the near-term. On the call, management also pointed to the fact that its top 10 customers only represent 27% of total revenue and the average age of those relationships is more than 20 years.Management said that the company is on track with both phases of the operational restructuring. The first phase concluded during the first quarter, achieving a $30 million annual run rate improvement in operating income. The second phase will conclude at year-end and is expected to provide another $15 million in operating income. In its entirety, the plan includes reductions in tractors, trailers, headcount and the consolidation of separately operated flatbed companies that Daseke had acquired over the last decade.View more earnings on DSKECiting uncertainty into a freight recovery, the company withdrew its full-year 2020 guidance calling for $1.61 to $1.69 billion in revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $170 to $180 million compared to $170.9 million in 2019.On the call, Easter formally introduced the company's new CFO Jason Bates, who joined Daseke in late April from USA Truck Inc. (NASDAQ: USAK), where he held the same position.First Quarter 2020 Daseke reported a 9.7% year-over-year decline in revenue to $391 million. Lower per mile rates and weakness in several end markets were the primary reasons. As part of its restructuring, Daseke reduced its total average tractor count by 336 units compared to the first quarter of 2019. Freight revenue per tractor declined 7.5% in the company's specialized segment with the flatbed unit seeing a 1.8% increase. Rate per mile was 12% lower in specialized at $3.24 and 4.6% lower at $1.86 in the flatbed segment. Key Performance Indicators – DasekeThe company's consolidated adjusted operating ratio (OR) was basically flat year-over-year at 97.2%. Before adjustments, the company reported a net loss of $17.3 million, or $0.29 per share. Excluding the $13.4 million non-cash impairment charge associated with the divestiture of Aveda and other expenses associated with the restructuring, Daseke reported an $800,000 net loss.Consolidated adjusted EBITDA was $35 million, $37.3 million excluding Aveda and slightly higher than the year-ago period. Excluding the results from Aveda, net income increased by $8.9 million year-over-year in the quarter.In 2019, Daseke recorded $312.8 million in impairment charges as valuations of prior acquisitions declined, mostly due to the declines in used truck prices.Balance Sheet and Liquidity Daseke ended the first quarter with liquidity of $107.5 million in cash and equivalents and $84.4 million available on its revolving credit facility. Total debt of $693.6 million, $586.1 million net of cash and equivalents, improved from the $608.4 million in net debt reported at the end of 2019. Net debt-to-adjusted EBITDA was 3.2x, below the company's 4x leverage covenant.The carrier generated net cash from operations of $29.7 million, recording $4.5 million in cash capital expenditures (capex) with cash proceeds from equipment sales of $5.8 million. Daseke reported an additional $9.8 million in capex that was financed with debt and capital leases. Free cash flow was $31 million in the period, down $6.1 million from the prior year quarter.Even with the COVID-19 headwinds that are somewhat constraining balance sheet improvement initiatives, management plans to lower the average tractor age from 3.25 years (excluding Aveda's fleet) to 3 years by year-end.Shares of DSKE are up 15% in midday trading after surging more than 20% shortly after the market opened.See more from Benzinga * Daseke Reports Small Adjusted Loss, Declining Flatbed Markets Plateau In Late April * Daseke Appoints New CFO * Daseke Sees Flatbed Softness Continuing Through First Half Of 2020(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Q4 2019 Daseke Inc Earnings Call
Daseke, an Addison-based trucking firm going through a time of significant change, is now entering the second phase of its improvement plan. Daseke, Inc. (Nasdaq: DSKE) announced "Phase II" of efforts to boost financial performance of the company earlier this week as it released full 2019 financial results. Phase II will result in $15 million in annual operating income improvement, the company projects, on a run-rate basis by the end of 2020 fourth quarter.
The amendment is subject to stockholder approval, which the Company intends to seek at the upcoming 2020 Annual Meeting of Stockholders. “The Board believes the Company is making significant progress on its transformation plan and the Board welcomes shareholder input and feedback, through the annual meeting process as well as direct shareholder engagement.”
Continued execution against operational improvement goals helps to offset softer rate environment and puts Company in position to exit pandemic period from a position of.
The nation's largest flatbed carrier, Daseke Inc. (NASDAQ: DSKE), expects "general industrial softness" and a "sustained weakness" in the oil and gas markets to continue through the first half of 2020. On the company's earnings conference call, Daseke's management team said that the market has been softer in the first quarter when compared to the fourth quarter of 2019.When asked for specifics, management said that oil rig counts are "down hard," but its wind-energy business has provided a substantial offset. Management said that the company's exposure to the oil and gas markets was 13% during 2019.When pressed on the impacts of the coronavirus, management said that the bulk of the company's business is domestic, but that they have seen a drop in container volumes. Further, they said that one customer project that is tied to Chinese components has been delayed.The Dallas area-based carrier reported an adjusted net loss of $0.12 per share for the fourth quarter of 2019, better than analysts' forecasts for a $0.20 per share loss, but worse than management's recently updated guidance.At the end of January, Daseke issued a press release increasing its financial expectations to the "high-end" of its prior guidance range for fourth-quarter and full-year 2019. The new expectation called for a fourth-quarter adjusted net loss of only $6 million to $2 million, or roughly $0.09 to $0.03 per share. While total fourth-quarter revenue of $403 million, down 10% year-over-year, was within management's new guidance, the $7.8 million adjusted net loss was not.Further, Daseke's full-year 2019 adjusted net income of $2.1 million missed management's updated full-year 2019 guidance of $3 million to $7 million."Adjusted" figures exclude items expected to be non-recurring, like transformation, restructuring and impairment charges. In 2019, Daseke recorded $312.8 million in impairment charges as valuations of prior acquisitions declined mostly due to the declines in used truck prices.Next Phase Of RestructuringThe carrier continues to restructure operations after a decade of acquisitions. Daseke remains on track with "Phase I" of its restructuring plan, which lowered the company's tractor count, trailer count and non-driver headcount each by 8% and is expected to achieve an annual run rate of $30 million in incremental operating income by the end of first quarter 2020."2019 proved to be a year of significant transformation for Daseke, as we took aggressive action to streamline the business, reset our leadership team, and reposition the company to drive profitable growth in the future," said Daseke CEO Chris Easter. Easter was named Daseke's permanent CEO last month after serving in the role on an interim basis for six months after the company's founder and CEO Don Daseke stepped down.Additionally, the company announced "Phase II" of the improvement plan. This phase is expected to deliver a run rate of an additional $15 million in operating income by the end of 2020. Like Phase I, this phase will integrate three more previously acquired operations, taking its total number of separately operated business units from 13 to 10. (Phase I provided a reduction in standalone carriers from 16 to 13.) Other "business improvement actions" are expected to be taken as well. Easter continued, "In total, we expect that Phase I and II of our Operational Improvement Plan, which began in August 2019, will deliver $45 million in annual operating income improvements as we enter fiscal 2021, and will position the company for more profitable growth as the industrial market improves."Fourth-Quarter ResultsDaseke reported revenue declines in both of its specialized and flatbed divisions due primarily to "lower freight rates and lower miles driven."Daseke's Key Performance IndicatorsThe company's specialized segment saw a 7% year-over-year decline in total revenue to $257 million due to "softer oil & gas related end markets." The division's average tractor count was 114 units lower and rate per mile declined 5% to $3.43 in the period.The division reported a 94.5% operating ratio (OR), 150 basis points (bps) worse year-over-year. In addition to demand weakness, management noted strength in wind-energy markets and the sale of underutilized equipment as offsets to further margin degradation.The flatbed division reported a 13% decline in total revenue at $150 million compared to the fourth quarter in 2018. The average tractor count declined by 44 units year-over-year with a 4% decline in rate per mile at $1.87. The division reported a 200-bp improvement in OR at 93.8% given improved brokerage margins, which were partially offset by "softness in manufacturing- and construction-related end markets."Daseke ended 2019 with net debt of $608.4 million, $48 million lower year-over-year. The company generated $130 million in free cash flow during the year, allowing it to pay down debt and fund its capital expenditures (capex). Daseke's leverage ratio, net debt-to-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) excluding one-time items, was 3.18x at the end of the year. Management said that the leverage ratio may move higher in the first half of 2020 as 80% of its planned $75 to $80 million in capex will occur then.Guidance Daseke's full-year 2020 guidance calls for revenue to be in the range of $1.61 to $1.69 billion and adjusted EBITDA of $170 to $180 million compared to $170.9 million in 2019. Management said that they expect volumes to be "relatively flat" year-over-year in 2020 with rate pressure in the first half, subsiding in the back half as flatbed truck capacity tightens.Management highlighted $32 million in EBITDA headwinds stemming from pricing and volume declines given lower U.S. oil rig activity as well as higher insurance expenses. However, they expect these headwinds to be offset by $36 million in restructuring initiatives.Management said that their guidance doesn't include any potential impact from the coronavirus.Shares of DSKE are 15% lower on the day.Image by skeeze from PixabaySee more from Benzinga * FCCC Debuts Electric Chassis At Work Truck Show; Utilimaster Shows New Class 3 Van * Wet Weather Hitting Nation's Two Largest Freight Markets * National Volumes Hit New Highs – FreightWaves NOW(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Moody's Investors Service ("Moody's") downgraded the ratings of open deck truck carrier Daseke Companies, Inc. ("Daseke"), including the Corporate Family Rating to B3 from B2, the Probability of Default Rating to B3-PD from B2-PD and the senior secured rating to B3 from B2. The Speculative Grade Liquidity Rating was maintained at SGL-3.
Daseke Inc. (NASDAQ: DSKE), the nation's largest flatbed carrier announced that Jason Bates will fill its vacant chief financial officer position effective April 27.On Wednesday, truckload (TL) carrier USA Truck Inc. (NASDAQ: USAK) said that Bates is departing to "pursue other opportunities." Zachary King, the company's corporate controller, will succeed Bates as CFO."We are excited to welcome Jason to Daseke. Jason brings both transformational transportation experience, as well as a strong track record with one of the largest and most sophisticated companies in our industry," said Daseke CEO Chris Easter. "I am excited to be joining the team at Daseke, which is not only a highly respected niche market leader, but a company that is repositioning itself to be a best-in class organization through operational excellence," said Bates. Daseke has been looking for a CFO since September 2019, when Bharat Mahajan stepped down. At the time, the company said that it was going to fill the role on an interim basis with an advisory consultant while it focused on finding a new CEO.In February, interim CEO Chris Easter, became the permanent replacement for Don Daseke, who stepped down last summer.Earlier this month, Daseke announced that Chief Accounting Officer Angie Moss will leave at the end of May.Bates joins Daseke amid a multi-phase restructuring.After a decade of acquisitions, the company is now focused on streamlining operations and reducing its cost structure. In its fourth quarter 2019 earnings report, the carrier said the restructuring is on track. The company has trimmed tractors, trailers and non-driver headcount by 8% each. Additionally, the number of separately operated flatbed companies was reduced from 16 to 13 with the expectation that operating income would improve by $30 million on an annual run rate by the end of March.The second phase of the improvement plan is expected to generate an additional $15 million in operating income by the end of 2020. It will see further operational streamlining and roll another three operating units into existing Daseke companies."His [Bates] extensive corporate finance experience will be an invaluable asset to both our finance team and to the Daseke executive leadership team" Easter said.Bates was granted options to purchase nearly 410,00 shares at an exercise price of $1.38 per share as well as 388,500 performance stock units, which are subject to vesting requirements and the company's share price reaching certain thresholds."I intend to bring a data-oriented, process improvement mindset which should complement the great work the Daseke team has already implemented over the last nine months," Bates said. "Further, I will prioritize continued deleveraging and balance sheet improvement efforts," Bates concluded.Bates joined USA Truck in April of 2017. Prior to that he served as the vice president of finance and investor relations at Swift Transportation Company.Photo Credit: WTI Transport/DasekeSee more from Benzinga * Tight Capacity Will Drive Year-End Snapback In Trucking Markets: TIA Economist * CSX Seeks To Manage Expenses And Costs * Food Supply Chain In Peril As Plants Close Amid COVID-19 Pandemic(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Daseke, Inc. (DSKE) (or the “Company”), the largest flatbed, specialized transportation and logistics solutions company in North America, today announced that it plans to report results for its fiscal first quarter ended March 31, 2020 on May 7, 2020. A conference call to discuss the financial and operational results is scheduled for May 7, 2020 at 11:00 AM ET. Daseke, Inc. is the largest flatbed and specialized transportation and logistics company in North America.
Delivering today's prepared remarks are Chris Easter, CEO; Jason Bates, CFO; and John Michell, VP of Operation Strategy. Before we go further, I would like to turn the call over to Brooks Hamilton with the Alpha IR Group, who will read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Today's presentation contains forward-looking statements as within the meaning of the Private Securities Litigation Reform Act of 1995.
Shares of Daseke (NASDAQ:DSKE) remained unaffected at $1.41 after the company reported Q1 results.Quarterly Results Earnings per share were down 133.33% over the past year to ($0.01), which beat the estimate of ($0.07).Revenue of $391,000,000 lower by 9.70% from the same period last year, which beat the estimate of $387,500,000.Looking Ahead Earnings guidance hasn't been issued by the company for now.Daseke hasn't issued any revenue guidance for the time being.How To Listen To The Conference Call Date: May 07, 2020View more earnings on DSKETime: 11:03 AM ETWebcast URL: https://investor.daseke.com/events-and-presentations/default.aspxPrice Action 52-week high: $5.65Company's 52-week low was at $0.86Price action over last quarter: down 29.50%Company Overview Daseke Inc provides transportation and logistics solutions focused exclusively on a flatbed and specialized freight in North America. It has two reportable segments: Flatbed Solutions and Specialized Solutions. The Flatbed Solutions segment focuses on delivering transportation and logistics solutions that principally require the use of flatbed and retractable-sided transportation equipment, and the Specialized Solutions segment focuses on delivering transportation and logistics solutions that principally include super heavy haul, high-value customized, over-dimensional, commercial glass, and high-security cargo solutions. Daseke derives most of its revenues from its Specialized Solutions segment.See more from Benzinga * Recap: Nine Energy Service Q1 Earnings * Armstrong Flooring: Q1 Earnings Insights * NexPoint Residential: Q1 Earnings Insights(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Hennessy Capital Acquisition Corp II (DSKE) delivered earnings and revenue surprises of 85.71% and -0.48%, respectively, for the quarter ended March 2020. Do the numbers hold clues to what lies ahead for the stock?
Mr. Bates will be fully transitioned into his new role by April 27th, and will be responsible for managing all treasury, accounting, tax, investor relations, financial planning and analysis, and capital market activities, and be charged with managing the Company’s balance sheet and improving its corporate finance capabilities. Additionally, Mr. Bates’s significant experience will meaningfully contribute to Daseke’s ongoing operational and cost improvement plans.
Shareholders in Daseke, Inc. (NASDAQ:DSKE) had a terrible week, as shares crashed 29% to US$1.99 in the week since its...
Daseke (DSKE) delivered earnings and revenue surprises of 85.71% and -0.48%, respectively, for the quarter ended March 2020. Do the numbers hold clues to what lies ahead for the stock?
Hennessy Capital Acquisition Corp. II (DSKE) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
In this new executive role, Mr. Williams will be responsible for managing Daseke’s industry-leading scale in the flatbed and specialized trucking market, and further leveraging the Company’s scale into profitable earnings growth. Additionally, Mr. Williams will be responsible for overseeing ongoing business integrations and further business optimization efforts across the portfolio.
Hennessy Capital Acquisition Corp. II (DSKE) delivered earnings and revenue surprises of 36.84% and 0.42%, respectively, for the quarter ended December 2019. Do the numbers hold clues to what lies ahead for the stock?