Daseke Reports 26% Rise in Revenue for Q1
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Daseke Inc. experienced a 26% increase in revenue year-over-year for the first quarter, the company reported May 3.
The Addison, Texas-based flatbed and specialized transportation carrier posted net income of $13 million, or 18 cents a diluted share, for the three months ending March 31. That compared with a net loss of $7.3 million, or minus 13 cents, during the 2021 period. Total revenue increased by 26.1% to $421 million from $333.9 million.
“Daseke delivered another strong quarter of operational and financial performance while continuing to make progress against our ongoing transformation and further expanding returns for our shareholders,” said Daseke CEO Jonathan Shepko during a call with investors. “Freight demand across the industrial landscape we support has continued to sustain with the persistent theme of supply and demand imbalance.”
Shepko
Shepko added this imbalance has helped drive strong freight rates across most of the end markets the company services. Daseke, in response, has worked to convert the resulting top-line revenue growth to earnings for its shareholders.
“Demand across most of our key end markets remains strong in first quarter, continuing to defy our normal seasonal trends as we posted both year-over-year and sequential improvements,” Shepko said. “We continue to see demand strengths in construction, manufacturing and steel markets, driving flatbed performance, while high-security cargo and glass bolstered growth in a specialized segment.”
Daseke shifted assets during the first quarter to support its work with the U.S. Department of Defense to capture surging freight demand there.
Daseke Reports Results for First Quarter 2022 2022 by Transport Topics on Scribd
“This is yet another example of how our diversified portfolio in markets yielded an opportunity for us to strategically redeploy assets into one of our highly specialized niche pockets of demand,” Shepko said. “Providing for not only incremental freight capture, but also higher margin potential.”
The results were above expectations by investment analysts on Wall Street, who had been looking for 12 cents per share and quarterly revenue of $368.45 million, according to Zacks Consensus Estimate.
“Though supply and demand imbalance continues to bolster the current rate environment, we continue to face challenges in securing equipment in Q1 as the global supply chain also remains challenged,” Shepko said. “The capacity constraints due to equipment availability and driver shortages within our industry have only added additional crosswinds to further complicate the supply picture.”
Shepko anticipates that these rates will hold for the foreseeable future without a timely and meaningful correction to the demand side of the equation. He noted this is particularly true with the company entering its usual seasonally strong second and third quarters.
“I’m pleased to announce that during the first quarter we completed our first tuck-in acquisition,” Shepko said. “This acquisition decisively exemplifies our strategic priorities for M&A. This acquisition expands our geographic footprint with existing customers and the industrial hazardous waste end markets while also providing an opportunity to expand within the specialty chemicals verticals.”
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The specialized solutions segment reported that revenue increased 24.5% to $228.5 million from $183.6 million during the year-ago period. Income from operations increased 67.6% to $17.6 million from $10.5 million. The segment benefited from sustained demand and improving freight rates primarily in the construction, high security cargo and commercial glass end markets. Freight rates increased 22% year-over-year, even as wind energy volumes remain muted. The segment includes company freight, owner-operator freight, brokerage and logistics operations.
• Company freight revenue increased 13.3% to $116.4 million from $102.7 million.
• Owner-operator freight revenue increased 22% to $42.2 million from $34.6 million.
• Brokerage revenue increased 39.1% to $37 million from $26.6 million.
• Logistics revenue increased 45.8% to $10.5 million from $7.2 million.
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The flatbed solutions segment reported that revenue increased 27.1% to $195.1 million from $153.5 million during the prior-year quarter. Income from operations increased 45.5% to $16 million from $11 million. The segment benefited from continued strength and year-over-year improvement in the freight rate environment, which offset the impact of prior fleet downsizing and the mix shift toward asset-light. The supply chain for new equipment remaining challenged and contributed to a decrease in volumes year-over-year. The segment also includes company freight, owner-operator freight, brokerage and logistics operations.
• Company freight revenue decreased 7.4% to $41.5 million from $44.8 million.
• Owner-operator freight revenue increased 24.1% to $88.1 million from $71 million.
• Brokerage revenue increased 86.4% to $41.2 million from $22.1 million.
• Logistics revenue decreased 25% to 900,000 from $1.2 million.
Daseke ranks No. 26 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
