Daseke, Inc. (NASDAQ: DSKE) (“Daseke” or the “Company”), the
largest flatbed, specialized transportation and logistics solutions
company in North America, announced today that it has refinanced
its existing $484 million Term Loan B due February 2024 with a new
$400 million Term Loan B and available cash. The new Term Loan B,
maturing in March 2028 has a floating interest rate of LIBOR + 400
basis points, which is reduced from LIBOR + 500 basis points (the
LIBOR floor was also reduced from 100 basis points to 75 basis
points). The transaction closed on March 9, 2021. In addition, the
Company will seek an amendment to its ABL credit agreement to
increase maximum commitments thereunder from $100 million to $150
million, with a $50 million uncommitted accordion.
Transaction Highlights:
- Company to
utilize $84 million of its $176 million cash and cash equivalents
balance as of December 31, 2020 to pay down debt, which was driven
by excess cash generated from operations over the course of the
previous year
- Significantly
reduced cash interest expense under new Term Loan
- Extends
maturity on the Company’s debt from 2024 to 2028
- Creates
additional financial flexibility through improved covenant-lite
structure
- Further
strengthens the balance sheet and provides capacity for organic and
strategic growth investments
- Upon close, the
Company’s estimated net debt leverage ratio as defined by its
credit agreement will be approximately 2.7x based on the terms of
the credit agreement
“We are pleased with the improved terms of the
new Term Loan B, which were supported by the Company’s improved
economic performance and unique competitive positioning,” commented
Jason Bates, Chief Financial Officer of Daseke. “Execution against
our strategic plan over the last six quarters has significantly
enhanced our operational and financial performance, and helped us
fortify our balance sheet and meaningfully improve credit metrics.
Given the attractive market backdrop, we believe now was the
opportune time to utilize our strong cash position to reduce the
Company’s funded leverage. Additionally, Daseke’s strengthening
credit profile has been recognized by ratings agencies, and the
completion of this refinancing further extends our financial
flexibility, particularly given the improved pricing and
covenant-lite structure. The better cost of debt capital and
greater financial flexibility under the new Term Loan will help
serve strategic needs and the pursuit of accretive growth
opportunities. We remain committed to further advancing our
business transformation and driving sustainable top-line and
profitability growth.”
In connection with the refinancing, on February
23, 2021, Moody’s Investment Services (“Moody’s”) upgraded Daseke’s
corporate family and senior secured ratings to “B2” from “B3,” and
S&P Global (“S&P”) provided a one-notch upgrade Daseke’s
issuer credit family and term loan ratings to “B”.
JPMorgan Chase Bank, N.A. served as exclusive
arranger and sole bookrunner for Daseke in executing this
transaction.
About Daseke, Inc.
Daseke, Inc. is the largest flatbed and
specialized transportation and logistics company in North America.
Daseke offers comprehensive, best-in-class services to many of the
world’s most respected industrial shippers through experienced
people, a fleet of more than 5,000 tractors and 11,500 flatbed and
specialized trailers. For more information, please visit
www.daseke.com.
Forward‐Looking Statements
This news release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by
the use of words such as “may,” “will,” “expect,” “anticipate,”
“continue,” “estimate,” “project,” “believe,” “plan,” “should,”
“could,” “would,” “forecast,” “seek,” “target,” “predict,” and
“potential,” the negative of these terms, or other comparable
terminology. Projected financial information, including our
guidance outlook, are forward-looking statements.
These forward-looking statements are based on
information available as of the date of this release, and current
expectations, forecasts and assumptions. While management believes
that these forward-looking statements are reasonable as and when
made, there can be no assurance that future developments affecting
us will be those that the Company anticipates. In particular, the
Company makes no assurances that its ABL credit facility will be
amended as currently expected. Accordingly, forward-looking
statements should not be relied upon as representing the Company’s
views as of any subsequent date, and the Company does not undertake
any obligation to update forward-looking statements to reflect
events or circumstances after the date they were made, whether as a
result of new information, future events or otherwise, except as
may be required under applicable securities laws. Accordingly,
readers are cautioned not to place undue reliance on the
forward-looking statements.
The effect of the COVID-19 pandemic may remain
prevalent for a significant period of time and may continue to
adversely affect the Company’s business, results of operations and
financial condition even after the COVID-19 pandemic has subsided
and “stay at home” mandates have been lifted. The extent to which
the COVID-19 pandemic impacts the Company will depend on numerous
evolving factors and future developments that it cannot predict.
There are no comparable recent events that provide guidance as to
the effect the COVID-19 global pandemic may have, and, as a result,
the ultimate impact of the pandemic is highly uncertain and subject
to change. Additionally, the Company will regularly evaluate its
capital structure and liquidity position. From time to time and as
opportunities arise, the Company may access the debt capital
markets and modify its debt arrangements to optimize its capital
structure and liquidity position.
Forward-looking statements are subject to risks
and uncertainties (many of which are beyond our control) that could
cause actual results or outcomes to differ materially from those
indicated by such forward-looking statements. These factors
include, but are not limited to, general economic and business
risks, such as downturns in customers’ business cycles and
disruptions in capital and credit markets, the impact to the
Company’s business and operations resulting from the COVID-19
pandemic, the Company’s ability to execute and realize all of the
expected benefits of its integration, business improvement and
comprehensive restructuring plans, the Company’s ability to
complete planned or future divestitures successfully, the Company’s
ability to adequately address downward pricing and other
competitive pressures, driver shortages and increases in driver
compensation or owner-operator contracted rates, loss of senior
management or key operating personnel, our ability to realize
intended benefits from its recent or future acquisitions,
seasonality and the impact of weather and other catastrophic
events, fluctuations in the price or availability of diesel fuel,
increased prices for, or decreases in the availability of, new
revenue equipment and decreases in the value of used revenue
equipment, the Company’s ability to generate sufficient cash to
service all of the Company’s indebtedness, restrictions in its
existing and future debt agreements, increases in interest rates,
changes in existing laws or regulations, including environmental
and worker health safety laws and regulations and those relating to
tax rates or taxes in general, the impact of governmental
regulations and other governmental actions related to the Company
and its operations, litigation and governmental proceedings, and
insurance and claims expenses. You should not place undue reliance
on these forward-looking statements. For additional information
regarding known material factors that could cause our actual
results to differ from those expressed in forward-looking
statements, please see Daseke’s filings with the Securities and
Exchange Commission, available at www.sec.gov, including Daseke’s
most recent annual report on Form 10-K, and subsequent quarterly
reports on Form 10-Q, particularly the section titled “Risk
Factors.”
Investor Relations:
Alpha IR GroupJoseph Caminiti or Chris
Hodges312-445-2870DSKE@alpha-ir.com
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