Daseke, Inc. (NASDAQ: DSKE) (or the “Company”), the largest
flatbed, specialized transportation and logistics solutions company
in North America, today commented on the recent statement (the “SEC
Statement”) from the Staff of the Securities and Exchange
Commission (the “SEC”) concerning the accounting for warrants
issued by special purpose acquisition companies (“SPACs”). Daseke’s
warrants (NASDAQ: DSKEW), which expire in February 2022, are
exercisable at a price of $5.75 per one-half of one share of common
stock, or $11.50 per whole share.
Jason Bates, Executive Vice President and Chief
Financial Officer of Daseke, commented, “While Daseke did go public
through a SPAC vehicle which involved the issuance of warrants,
that process was completed over four years ago. Any corrections in
the accounting for those warrants will be non-operational and
non-cash, and thus would have no impact on our Revenue, Operating
Income, Operating Ratio, Adjusted EBITDA, Adjusted EPS, or Free
Cash Flow in prior years or moving forward. Given the exercise
price of Daseke’s outstanding warrants, which expire in February
2022, and the current trading price of our common shares, the
accounting correction resulting from the SEC Statement will likely
result in an increase to GAAP net income over the next four
quarters.
We are very encouraged with the significant
progress generated by our entire organization over the past 18
months and remain focused on advancing that positive operational
and financial momentum. We believe our strategy to drive long-term
shareholder value will continue to manifest itself over the coming
quarters and years. As a result, we are reiterating our 2021
revenue and earnings outlook, which we provided on our last
earnings call, and are excited to share the results of our first
quarter 2021 on May 7th.”
Highlights:
- The Company
notes that GAAP net income over the next four quarters will likely
increase as a result of this accounting correction
- The Company is
reaffirming full-year 2021 financial guidance, as detailed on the
prior earnings call, including revenue of $1.4 to $1.5 billion and
Adjusted EBITDA of $165 to $175 million
- Daseke has
followed the predominantly utilized accounting treatment for its
public and private warrants from the time of its IPO
- Daseke believes
that SPACs have almost universally accounted for warrants as equity
instruments; though the SEC Statement has provided clarification
that these warrants should be accounted for as liabilities
- The Company has
retained a third-party valuation firm to quantify the exact
financial impact of the correction, for which we provided
preliminary ranges in the Form 8-K, filed with the SEC on April 22,
2021
- The Company
believes the most impactful period of this change relates to the
annual and interim periods in 2018, which the Company believes has
little to no bearing on the investment thesis in Daseke at present,
particularly considering the significant strategic and structural
changes undertaken over the past 18 months as a part of the
Company’s transformation initiatives
- The Company
notes that this accounting correction will result in changes to its
historical financial statements for the interim and annual periods
in 2018, 2019 and 2020, but emphasizes that it will not have any
effect on previously reported Revenue, Operating Income, Operating
Ratio, Adjusted EBITDA, Adjusted EPS, or Free Cash Flow
First Quarter Earnings Call
Information
The Company also announced that it plans to
report results for its fiscal first quarter ended March 31, 2021 on
May 7, 2021. A conference call to discuss the financial and
operational results is scheduled for May 7, 2021 at 11:00 AM
ET.
Investors, analysts, and members of the media
interested in listening to the live presentation are encouraged to
join a webcast of the call with accompanying presentation slides,
available on the Company’s website at https://www.daseke.com.
Interested parties may also participate in the call by dialing
(855) 242-9918 and entering the passcode 4570038. A replay of the
conference call will be available a few hours after the event on
the investor relations section of the Company’s website, under the
events section.
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.
Use of Non-GAAP Measures
This news release includes non-GAAP
financial measures for the Company, including Adjusted EBITDA,
Adjusted EPS and Free Cash Flow.
Please note that the non-GAAP measures described
below are not a substitute for, or more meaningful than, net income
(loss), cash flows from operating activities, operating income or
any other measure prescribed by GAAP, and there are limitations to
using non-GAAP measures. Certain items excluded from these non-GAAP
measures are significant components in understanding and assessing
a company’s financial performance, such as a company’s cost of
capital, tax structure and the historic costs of depreciable
assets. Also, other companies in Daseke’s industry may define these
non‐GAAP measures differently than Daseke does, and as a result, it
may be difficult to use these non‐GAAP measures to compare the
performance of those companies to Daseke’s performance. Because of
these limitations, these non-GAAP measures should not be considered
a measure of the income generated by Daseke’s business or
discretionary cash available to it to invest in the growth of its
business. Daseke’s management compensates for these limitations by
relying primarily on Daseke’s GAAP results and using these non-GAAP
measures supplementally.
Adjusted EBITDA
Daseke defines Adjusted EBITDA as net income
(loss) plus (i) depreciation and amortization, (ii) interest, (iii)
income taxes, and (iv) other material items that management
believes do not reflect our core operating performance. Daseke has
not reconciled its expectations as to Adjusted EBITDA to net
income, the most directly comparable GAAP measure due to the high
variability and inherent difficulty in forecasting and quantifying
certain amounts that are necessary for such reconciliation, and
Daseke is unable to provide such reconciliation without
unreasonable effort.
The Company’s board of directors and executive
management team use Adjusted EBITDA as a key measure of its
performance and for business planning. Adjusted EBITDA assists them
in comparing the Company’s operating performance over various
reporting periods on a consistent basis because it removes from the
Company’s operating results the impact of items that, in their
opinion, do not reflect the Company’s core operating performance.
Adjusted EBITDA also allows the Company to more effectively
evaluate its operating performance by comparing the results of
operations against its peers without regard to its or its peers’
financing method or capital structure. The Company’s method of
computing Adjusted EBITDA is substantially consistent with that
used in its debt covenants and also is routinely reviewed by its
executive management for that purpose. The Company believes its
presentation of Adjusted EBITDA is useful because it provides
investors and industry analysts the same information that the
Company uses internally for purposes of assessing its core
operating performance.
Adjusted Net Income (Loss) and Adjusted EPS
Daseke defines Adjusted Net Income (Loss) as net
income (loss) adjusted for material items that management believes
do not reflect our core operating performance. Daseke defines
Adjusted EPS as Adjusted Net Income (Loss) divided by the weighted
average number of shares of common stock outstanding during the
period under the two-class method.
The Company’s board of directors and executive
management team use these measures as key measures of its
performance and for business planning. These measures assist them
in comparing its operating performance over various reporting
periods on a consistent basis because it removes from operating
results the impact of items that, in its opinion, do not reflect
the Company’s core operating performance. The Company believes its
presentation of these measures are useful because it provides
investors and industry analysts the same information that it uses
internally for purposes of assessing its core operating
performance.
Free Cash Flow
Daseke defines Free Cash Flow as net cash
provided by operating activities less purchases of property and
equipment, plus proceeds from sale of property and equipment, as
such amounts are shown on the face of the Statements of Cash
Flows.
The Company’s board of directors and executive
management team use Free Cash Flow to assess the Company’s
liquidity and ability to repay maturing debt, fund operations and
make additional investments. The Company believes Free Cash Flow
provides useful information to investors because it is an important
indicator of the Company’s liquidity, including its ability to
reduce net debt, make strategic investments, pay dividends to
common shareholders and repurchase stock.
Forward‐Looking StatementsThis
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. Forward-looking statements may also
include statements about the Company’s goals, including its
restructuring actions and cost reduction initiatives; the Company’s
financial strategy, liquidity and capital required for its business
strategy and plans; the Company’s competition and government
regulations; general economic conditions; and the Company’s future
operating results.
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. 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, particularly the
section titled “Risk Factors” in Daseke’s most recent annual report
on Form 10-K.
Investor Relations:Alpha IR GroupTel
1-312-445-2870DSKE@alpha-ir.com
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