Flatbed carrier Daseke Inc. (NASDAQ: DSKE) announced further progress in its restructuring efforts with the planned divestiture of its oil rig transportation company, Aveda Transportation and Energy Services.
“Our management and board of directors have concluded that the Aveda business is not a long-term fit with the rest of our portfolio, and as a result, we have elected to begin the process to strategically divest this business. Following its conclusion, our Oil and Gas-related business should represent less than 2% of our go-forward revenues,” stated CEO Chris Easter in the company’s first quarter 2020 earnings release.
Daseke acquired Aveda in April 2018.
The carrier reported a $0.01 per share first-quarter loss excluding a $13.4 million non-cash impairment charge associated with the removal of the Aveda unit from its portfolio. The adjusted loss also excluded other expenses associated with the transformation of the company. Analysts were forecasting the company to lose $0.07 per share in the quarter.
Inclusive of all items, the carrier reported a net loss of $17.3 million, or $0.29 per share.
The release stated that the company has completed the first phase of its restructuring plan – estimated to deliver $30 million in annual operating income – and is on track with the second phase, which should deliver an additional $15 million in operating income annually.
Daseke reported a 9.7% year-over-year revenue decline at $391 million. Lower rates per mile and weakness in the end markets the company serves – oil and gas, aerospace, manufacturing and construction – were cited as the reasons.
“Since the close of the first quarter, we’ve seen volume level declines in certain end markets due to COVID-19-related impacts, while others remain stable. Most of the end markets that showed decline appear to have plateaued during the back-half of April,” Easter continued.
Shares of DSKE are up 18% in early trading.
The company will hold a conference call to discuss these results with analysts and investors at 11:00 a.m. Eastern time.