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Daseke Inc., the Addison, Texas-based flatbed transportation and logistics company, extended its losses in the first quarter as the rate environment softened.
For the period ended March 31, Daseke reported a net loss of $17.3 million, or 29 cents per share, compared with a net loss of $9.3 million, or 16 cents a share, the same time a year ago.
Revenue fell 9.7% to $391 million from $433 million the prior year driven primarily by lower freight rates in both the flatbed and specialized segment, the company said.
Wall Street analysts had projected 7 cents per share and revenue of $392.9 million, according to Zacks Consensus Estimate.
The net loss included a noncash impairment charge of $13.4 million related to divestiture of Aveda Transportation and Energy Services, which was initiated in the quarter.
CEO Chris Easter said, “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.”
He continued, “I think it’s important for our investors and analysts to understand the actions we are taking today with Aveda are not a knee-jerk reaction to the COVID-19 situation or the significant impact on the oil and gas industry.”
From a strategic perspective, he said, “this will further streamline our specialized segment.”
Easter acknowledged the hard work employees and contractors have contributed over the last few weeks in response to the coronavirus pandemic. He said safety has always been a top priority but amid this current crisis that has been especially true.
“As the COVID-19 epidemic became part of public awareness, we acted fast and took a number of proactive measures to ensure the safety of our employees, contractors and the many physical places in which we do business,” Easter said. “While the intended effect was to preserve the health of both our workers and customers, our proactive actions helped insulate our business from meaningful COVID-related interruptions to our operations.”
Easter added rates and volumes held up well for the first 11 weeks of the year. They did start to see volumes slow at the end of March across certain end markets.
“This continued into April and spread into additional end markets but volumes appear to have plateaued toward the third week of April,” Easter said. “Although we are not experiencing weaker demand across all markets, we expect COVID-19 related volume declines to impact our performance in the second quarter.”
The specialized solutions segment saw revenue decrease 11% to $240.4 million compared with $269.7 million during the same time last year. The net loss for the segment was $12.6 million compared with net income of $3.8 million in the prior year. The rate per mile during the quarter was down 12% to $3.24 from the prior-year quarter. Revenue per tractor decreased 7% to $57,800.
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The flatbed solutions segment saw revenue decrease 8% to $155.2 million from $167.9 million during the same time last year. Net income was $4.2 million, compared with net income of $400,000 the prior year. The rate per mile declined 5% from the previous year to $1.86. Revenue per tractor increased 2% to $42,300.
Founded in 2008, Daseke has a fleet of more than 5,500 tractors and 12,000 flatbed and specialized trailers.
Daseke Inc. ranks No. 21 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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