Freight demand across industrial markets will continue growing throughout the year, keeping rates high and enabling flatbed truckload provider Daseke Inc. to continue generating more revenue and profit.
“We continue to see strength in freight rates and have also flexed our asset light service offering to capture additional freight,” Daseke CFO Jason Bates told analysts on its second-quarter call Tuesday.
Daseke reported adjusted earnings per share of 42 cents in the quarter, compared to 42 cents in Q2 of 2021.
Daseke (NASDAQ: DSKE) raised its full-year 2022 guidance, calling for revenue growth in the 12%-to-15% range. Bates said the strong industrial demand, higher rate environment and fuel surcharge contracts will offset increasing fuel costs.
“We remain confident in our market outperforming driver retention rates and long-standing customer relationships and key differentiating factors that will help support Daseke through market cycles,” Bates said.
Daseke is keeping its full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) guidance outlook at 5% to 10% growth, the same EBITDA guidance the company provided in the first quarter.
“While we have experienced significant equipment delays in the first half of 2022, we expect that a majority of our equipment will be delivered in the second half of the year and are therefore reaffirming our full year 2022 net capital expenditure outlook of $145 [million] to $155 million,” Bates said.
Addison, Texas-based Daseke offers flatbed specialized transportation and logistics services across North America. The company boasts a fleet of more than 4,500 tractors and 11,000 flatbed and specialized trailers.
Daseke reported second-quarter consolidated revenue was up 19% year over year (y/y) to $481.3 million, even though the company operated with fewer tractors and total miles decreased compared to the year-ago quarter.
“We know our OEMS are doing everything they can to get us the equipment,” Bates said.
“We are behind, to the tune of 10% behind the equipment that we would have expected to have received at this point. Obviously, it has a lot of flow-through in the kind of challenges that we are dealing with. I would say we are not the only ones that are experiencing this.”
Consolidated brokerage revenue was up 38% y/y for the quarter at $92 million.
Rates per mile in both Daseke’s specialized freight segment, which moves project-type freight, and its general flatbed unit increased by more than 15% y/y in the second quarter to $3.59. The higher rates led to a 140 basis-point increase of improvement in adjusted operating ratio in the specialized unit (87.9%) and 130 bps in flatbed (88.1%).
Looking ahead to 2023, Daseke officials expect some slowdown in freight demand but also anticipate a boost from the Biden administration’s infrastructure bill, which will provide $550 billion in new funds for transportation, broadband and utilities.
“We don’t know exactly what 2023 is going to look like, but it’s looking more and more as we get here into the back half [of] 2022 that 2023 is probably not going to be that trough year,” Bates said. “Will things start slowing down in 2023? At some point, yeah, potentially, but we still see pretty decent demand, especially when we talk about the infrastructure bill and other things coming down the pipeline.”
|Freight revenue per tractor||$75,500||$66,700||13%|
|Total miles (millions)||48.9||51||(4%)|
|Freight revenue per mile||$3.59||$3.12||15%|
|Freight revenue per tractor||$57,300||$55,500||3.2%|
|Total miles (millions)||48.6||54.6||(11%)|
|Freight revenue per mile||$2.74||$2.50||9.6%|
|Adjusted EBITDA margin||14.7%||17.1%||(14%)|
|Adjusted earnings per share||$0.42||$0.42||——|
More articles by Noi Mahoney