Daseke Inc. Posts Net Loss in First Quarter, Sees Market Improvement in 2017
Daseke Inc. reported a net loss in its first earnings report since going public in February. However, company executives said the results were consistent with expectations and that recent gains in pricing and demand should bolster revenue and profits later in the year.
Daseke operates nine flatbed and heavy specialized carriers and recently added two more carriers, The Schilli Cos. in Remington, Ind., and Big Freight Systems in Winnipeg, Manitoba, to its group.
The company ranks No. 44 on the Transport Topics Top 100 list of largest U.S. and Canadian for-hire carriers.
For the three months ended March 31, Daseke reported a net loss of $8.6 million, or 32 cents a share, compared with a net loss of $2.5 million, or 12 cents a share, in the same period a year ago. Revenue rose 2.3% to $160.4 million from $156.9 million.
CEO Don Daseke said losses in the first quarter were smaller than in the fourth quarter of 2016 and that the two quarters are normally the weakest of the year for carriers that haul goods on open-deck platform trailers.
“The business environment substantially strengthened in March,” Daseke said in a statement on May 10. “We expect rates to continue to improve throughout 2017, although we anticipate much of the recovery will occur in the second half of the year.”
Based on the improved outlook and the addition of Schilli and Big Freight, Daseke said the company expects to achieve earnings before interest, taxes, depreciation and amortization of $140 million for the full year.
Daseke’s business is equally divided between flatbed and heavy specialized services and both areas experienced reduced profitability in the first quarter of 2017 compared to a year ago, partially due to a decline in freight rates over the past year.
“We believe rates during the 2016 first quarter were exceptionally strong and caution against benchmarking against that period as rates declined steadily throughout the remainder of 2016 and into the first quarter of 2017,” Daseke explained.
Daseke reported operating income of $3.9 million on revenue of $81.3 million for its flatbed segment in the first quarter of 2017. That compared with operating income of $4.9 million on revenue of $76.1 million in the same period in 2016. In the specialized segment, Daseke posted operating income of $1 million on revenue of $80.7 million in 2017, compared with operating income of $3.9 million on revenue of $81.6 million in 2016.
