Daseke Reports Record Second Quarter 2018 Results and Increases Full-Year Outlook(NASDAQ: DSKE) (NASDAQ: DSKEW), the largest flatbed, specialized transportation and logistics solutions company in North America, today reported financial results for the second quarter ended June 30, 2018. Second Quarter 2018 Highlights vs. Same Year-Ago Quarter
- Revenue increased 91% to $376.9 million.
- Flatbed Solutions revenue up 87% to $162.2 million; Specialized Solutions revenue up 95% to $218.4 million1.
- Net income improved significantly to $13.5 million, or $0.20 per share, compared to a net loss of $(4.1) million, or $(0.15) per share.
- Adjusted EBITDA (a non-GAAP term defined below) increased 91% to $46.3 million.
Management Commentary
“The momentum in our business has continued into the second quarter, with strong growth in revenue and Adjusted EBITDA,” said Don Daseke, chairman and CEO. “This was driven by year-over-year rate increases and growth in revenue per tractor in both the Flatbed and Specialized Solutions segments, excluding acquisitions. Our progress on various organic growth initiatives was also evident in a 13% increase in Acquisition-Adjusted2 EBITDA to $48.1 million.
“Further, in May 2018, we launched Daseke Fleet Services to support our growing scale, leveraging areas such as purchasing, equipment optimization and maintenance to improve cost efficiencies in ways that support our operating companies and Daseke’s overall organic growth. We expect this new department to reduce operating expenses, which would improve our operating income and margins.
“Given our strong performance in the first half of 2018, including organic growth from acquisitions, we are raising our full-year outlook. Our focus for the remainder of the year will be to continue executing on our well-defined strategic priorities. This begins with a focus on our organic growth initiatives, such as Daseke Fleet Services, and appropriate operations consolidations as we did with Kelsey Trail and Big Freight. We also remain committed to a focused M&A strategy and our pipeline remains robust. In fact, our acquisition of flatbed-focused Builders Transportation last week is a testament to our pipeline and our scalable platform.”
Second Quarter 2018 Financial Results
Revenue in the second quarter of 2018 increased 91% to $376.9 million compared to $197.3 million in the year-ago quarter. The increase was primarily driven by the acquisition of seven operating companies of scale during 2017. Excluding the acquisitions, revenues increased 13% largely due to an improvement in rates in both the Flatbed and Specialized segments.
Net income in the second quarter of 2018 improved significantly to $13.5 million, or $0.20 per share, compared to a net loss of $(4.1) million, or $(0.15) per share, in the second quarter of 2017. This also compares to Acquisition Adjusted net loss in the second quarter of 2017 of $(1.3) million.
Adjusted EBITDA increased 91% to $46.3 million compared to $24.3 million in the second quarter of 2017 and compared to Acquisition Adjusted EBITDA in the second quarter of 2017 of $41.6 million. Both the significant improvements in net loss and Adjusted EBITDA were primarily driven by the aforementioned acquisitions.
___________________________________
Segment Results
Flatbed Solutions - Flatbed Solutions revenue in the second quarter of 2018 increased 87% to $162.2 million1 compared to $86.9 million in the year-ago quarter. This was driven by the acquisition of TSH & Co. on December 1, 2017, as well as a 13% increase in flatbed rate per mile and 7% growth in revenue per tractor. Excluding the impact of acquisitions, rates were up 14% compared to the year-ago quarter. Operating income was $9.3 million, up 47% from $6.3 million in the second quarter of 2017.
Specialized Solutions - Specialized Solutions revenue in the second quarter of 2018 increased 95% to $218.4 million1 compared to $112.0 million in the year-ago quarter. The increase was driven by six specialized acquisitions of scale since May 2017, as well as a 10% increase in specialized rate per mile and 17% growth in revenue per tractor. Excluding the impact of acquisitions, rates were up 5% compared to the year-ago quarter. Operating income was $7.1 million, up 55% from $4.6 million in the second quarter of 2017.
Increased 2018 Outlook
Daseke now expects revenue in 2018 to be approximately $1.55 billion (up from $1.35 billion prior estimate) compared to $846.3 million in 2017, and Adjusted EBITDA to increase 85% to approximately $170 million ($150 million prior estimate) compared to $91.9 million in 2017. Net replacement capital expenditures in 2018 are now expected to be approximately $90 million when including newly acquired companies.