Daseke Reports Higher Profit, Revenue for Q2
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Daseke Inc. saw earnings and revenue increase during the second quarter, the company reported Aug. 3.
It also announced the permanent appointment of Jonathan Shepko to the CEO post.
The Addison, Texas-based flatbed transportation and logistics company posted net income of $35.3 million, or 49 cents a diluted share, for the three months ending June 30. That compared with $1.6 million, 0 cents, year-over-year. The total revenue increased 14.9% to $404 million from $351.7 million.
Shepko
Shepko, who has served as interim CEO since January, said he was “excited and humbled” to permanently take the reins. He has been a company director since 2017.
“We made tremendous strides in our transformation over the last two years,” he said during an Aug. 3 conference call. “We still have significantly more opportunity to take advantage of before achieving a level of operational excellence that our team believes is possible for this organization.”
The net income increase was partly due to a rise in operating income to $45.3 million from $12.4 million. It also was driven by a $9.4 million rise in other income, primarily related to reduced interest expense but also aided by additional noncash gains resulting from the change in fair value of warrant liability. These partially were offset by an increase in income tax expense due to the higher pretax income.
In 2020, we fortified our platform and streamlined business through organizational integrations as well as an enhanced focus on data-driven decision-making. Learn how these successes have positioned us for growth in 2021. https://t.co/SZxuuesc2I #Trucking #Daseke #Transportation pic.twitter.com/Ywrd2O4ksX — Daseke Inc. (@DasekeInc) March 11, 2021
Shepko said management is identifying and planning new initiatives intended to drive long-term profitable growth. Over the last two years the company has worked to integrate and transform operations, and Shepko noted these efforts have helped the company recruit drivers and optimize network efficiency.
“It’s important to note that we’ve seen strong market backdrops before,” he said. “But historically, during these times, Daseke had struggled to convert the strong top-line performance into profitable returns. With our emphasis on decisive execution, this current environment only underscores the transformational impact of the operational and integration initiatives we have completed over the last two years.”
The company’s Q2 results surpassed Wall Street expectations. Projections were for 9 cents per share and quarterly revenue of $369.70 million, according to Zacks Consensus Estimate.
Daseke Q2 2021 Earnings Report by Transport Topics on Scribd
Cowen & Co. analyst Jason Seidl said in a report that Daseke saw the benefits of strong construction and manufacturing activity, trends that could heighten if lawmakers pass a national infrastructure bill.
“We continue to believe that [Daseke] is the best-positioned name in our coverage to benefit from a potential infrastructure bill,” Seidl wrote in a report. “While management was hesitant to quantify any impacts from such a bill, we acknowledge that if/when a bill gets passed, it will likely be a 2022 story for [the company’s] flatbed division.”
Across Daseke’s divisions:
- Flatbed solutions segment revenue increased 31.9% to $180.9 million from $137.2 million. Income from operations rose 114% to $22.9 million from $10.7 million. The segment includes company freight, owner-operator freight, brokerage and logistics. Company freight revenue related to flatbed solutions decreased 2.5% to $47.7 from $48.9 million. Owner-operator freight revenue increased 47.9% to $ 88.9 million from $60.1 million. Brokerage revenue climbed 63.2% to $25.3 million from $15.5 million. Logistics increased 85.7% to $1.3 million from $700,000. Daseke said in the report that the flatbed solutions segment experienced a rate environment that has returned to pre-pandemic levels. Rates increased 38.9% compared with the prior-year quarter. This offset the impact of shifting to asset light and fleet downsizing. Freight volumes declined due to fleet-rightsizing efforts since last year. But despite the lower fleet size, load volume increased as excess capacity was directed to the brokerage business.
- Specialized solutions segment revenue increased 2.1% to $226.1 million from $221.5 million. Income from operations increased 100% to $29 million from $14.5 million. The segment includes company freight, owner-operator freight, brokerage and logistics. Company freight revenue related to specialized solutions decreased 2.7% to $118.3 from $121.6 million during the prior-year quarter. Owner-operator freight revenue increased 6.3% to $40.7 million from $38.3 million. Brokerage revenue decreased 3.7% to $41.5 million from $43.1 million. Logistics increased 14.8% to $9.3 million from $8.1 million. Specialized solutions benefited from continued strong demand and freight rates, primarily serving construction, high-security cargo and glass. This largely offset reduced activity in the wind energy market versus Q2 2020. The business-mix shift led to a 2.3% increase in average freight rate per mile, while revenue per truck increased by 12.3% versus last year.
Daseke ranks No. 26 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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