Daseke Reports Improved Q1 Earnings
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Flatbed carrier Daseke Inc. reported that its first-quarter net loss narrowed by more than half compared with year-ago levels.
The Addison, Texas-based motor carrier on May 7 posted a net loss of $7.3 million, or negative 13 cents a share, compared with a loss of $16.3 million, negative 16 cents, a year ago. The company’s Q1 revenue fell by 14.6% to $333.9 million, compared with $391 million a year ago.
Despite the declines, the company’s leadership praised its employees for working to improve operations.
“This quarter will mark the fourth consecutive quarter in which our team has successfully executed against our internal and external expectations,” interim CEO Jonathan Shepko said on a conference call with reporters and analysts. “What’s more, this accomplishment has been realized in the midst of not only comprehensive transformational overhaul within our organization but also strong headwinds from the global pandemic. Our business performance in Q1 was clearly supported by the improving economic landscape across the broader industrial economy, which is driving a healthy rate environment.”
Daseke’s flatbed solutions division reported Q1 revenue declined 1.1% to $153.5 million from $155.2 million in the same period a year ago. The company’s specialized solutions segment, which moves heavy project-type freight, saw Q1 revenue dip 23.6% to $183.6 million from $240.4 million in 2020. Company officials said demand to move wind energy equipment had trailed off as renewable energy production tax credits were set to expire, but the credits have since been extended through 2021. However, the credits were not extended early enough to help Q1 results, Daseke said.
The company also attributed its revenue decline in part to the sale last year of Aveda Transportation and Energy Services, an oil rig moving company, which Daseke acquired in June 2018.
“This decline in revenues was driven in large part by the strategic divestiture of the Aveda business and from fleet downsizing as we look to shed less attractive revenues,” Shepko said. “Overall, despite the lower relative revenue base, our profitability continues to trend in the right direction and we will look to capture incremental improvement as we return to growth.”
The company’s operating ratio improved to 95.6 from 97.0. Operating ratio measures a company’s operating expenses as a percentage of revenue and determines efficiency. The lower the ratio the more ability the company has to make a profit.
Company officials said Daseke is beginning to feel the effects of the improving U.S. economy.
“Several of these construction verticals are doing very well,” Chief Financial Officer Jason Bates said. “And I would say, it’s better than we expected. When you look at roofing and lumber and flat glass and steel, some of these things are doing really, really well.”
In late 2020, Daseke’s then-CEO Chris Easter announced his retirement after a little more than a year on the job. Easter took over after founder Don Daseke in August 2019 announced his retirement. Shepko in February was named interim CEO while a search began for a permanent leader. The board has hired an executive search firm to assist in recruiting.
“The search is ongoing,” Shepko said. “We don’t have any material updates at this time. We expect to have an announcement on or before our next earnings call, certainly.”
He also stressed that the search is not slowing down the company.
“From my perspective, from our senior leadership teams’ perspective, from the board’s perspective — things are moving full steam ahead,” Shepko said. “I want to reinforce that I’m not simply keeping the seat warm. I’m pushing, the team is pushing and we’re all intensely focused on executing our vision and strategic plan while managing the opportunities ahead.”
Founded in 2008, Daseke has a fleet of more than 5,500 tractors and 12,000 flatbed and specialized trailers.
Daseke Inc. ranks No. 23 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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