GlobeNewswire Inc | Oct 30, 2020 08:00AM EDT

October 30, 2020

ADDISON, Texas, Oct. 30, 2020 (GLOBE NEWSWIRE) -- Daseke, Inc. (NASDAQ: DSKE) (Daseke or the Company), the largest flatbed, specialized transportation and logistics solutions company in North America, today reported financial results for the third quarter ended September 30, 2020.

Third Quarter Highlights:

-- Revenue of $375.8 million -- Net Income of $15.7 million, or $0.22 per share attributable to common stockholders -- Record Adjusted Net Income of $21.9 million -- Record Adjusted EBITDA of $57.6 million, up 33% year-over-year -- Cash flows from operating activities of $39.5 million and Free Cash Flow of $52.0 million -- Record Operating Ratio and Adjusted Operating Ratio of 92.5% and 90.9%, respectively -- Cash and cash equivalents increased by $110.2 million year-over-year to $189.8 million

Management Commentary

We are pleased to report another very strong quarter of financial and operational results, as Daseke effectively leveraged its niche leadership position and improved operations to deliver record quarterly performance in our Operating Income, Operating Ratio, Adjusted Net income, and Adjusted EBITDA, said Chris Easter, Chief Executive Officer of Daseke. While we continue to face demand headwinds that have negatively impacted the Companys freight volumes and revenues, the significant work we have undertaken to improve our operational performance and our financial returns helped to more than overcome those top-line challenges. Notably, we delivered significant improvement in our quarterly net income and Adjusted EBITDA results in the face of a 17% decline in revenues as compared to the prior year period, demonstrating the much-improved earnings power of our business and operations, and our teams ability to deliver meaningful results.

Easter continued, The ongoing commitment to our key focus areas, including cost discipline and best-in-class operations, has helped solidify our foundation and established improved consistency to our results. In turn, this more resilient foundation has better positioned Daseke to execute upon unique market opportunities, specifically in the Wind Energy and High Security Cargo verticals, which helped lead the growth in our Specialized segment results this quarter. This dynamic helped drive record profitability and positions the Company to eventually capture a broader-based reflation in demand across industrial freight markets.

Easter concluded, While the last few months have been challenging for the industrial economy, I am very proud of how our team has stepped up to deliver outstanding performance amid continued softness in the demand environment. Our commitment to Dasekes strategic priorities has put us in a position to succeed and capitalize on market leadership opportunities, which in turn are now translating into record operating income, positive net earnings, and much improved cash flows. As the results from our transformational efforts are becoming increasingly evident to our bottom line, we have been able to organically strengthen our balance sheet and financial flexibility through leverage reduction and expanding liquidity. While there are still pockets of weakness in certain end markets, we are encouraged by the recent stabilization and sequential improvements across much of our business. We are prepared to leverage our niche market leadership position, which will help us continue to capture strong returns for our shareholders, irrespective of the external environment.

Third Quarter 2020 Financial Results

Total revenue in the third quarter of 2020 decreased 17% to $375.8 million, compared to $450.4 million in the year-ago quarter. Excluding the impact of the Aveda business to both 2020 and 2019, third quarter revenue decreased by 6%. This year-over-year decrease in revenue was driven primarily by the economic impact of the COVID-19 pandemic, which led to lower freight volumes and lower freight rates in both the flatbed and specialized segments, which were partially offset by increased project business.

Operating income in the third quarter of 2020 was $28.1 million, compared to operating loss of $316.6 million in the year-ago quarter, which included non-cash impairment charges and other restructuring costs. Adjusted operating income in the quarter was $34.3 million, which increased 152% from $13.6 million in the third quarter of 2019. This year over year increase was driven by operational integrations and business improvement plans executed over the trailing year, partially offset by weaker freight volumes. Operating income results also benefited from decreases in salaries, wages and employee benefits, fuel expense, maintenance expense, purchased freight, depreciation and amortization, and non-cash impairment charges.

Net income for the third quarter of 2020 was $15.7 million, or $0.22 per share attributable to common stockholders, compared to net loss of ($273.3) million, or ($4.25) per share attributable to common stockholders, in the year-ago quarter. Adjusted Net Income in the third quarter of 2020 was $21.9 million compared to Adjusted Net Income of $4.7 million in the third quarter of 2019. Adjusted EBITDA in the third quarter of 2020 was $57.6 million compared to $43.2 million in the year-ago quarter. Excluding the impact of the Aveda business, third quarter Adjusted EBITDA increased 37% to $56.2 million compared to $40.9 million in the comparable period last year. The year-over-year improvement in Adjusted EBITDA was driven primarily by growth in specific Specialized segment end markets, and contributions from the Companys operational improvement plans, partially offset by lower freight volumes.

Segment Results

Specialized Solutions - Specialized Solutions revenue in the third quarter of 2020 was $235.2 million, a decrease of 18% compared to $288.0 million in the year-ago quarter. Operating income in the third quarter of 2020 was $31.1 million, compared to operating loss of $187.6 million in the year-ago quarter. Operating Ratio improved by 7,830 basis points to 86.8%, compared to 165.1% in the year-ago quarter. Adjusted Operating Ratio of 85.2% improved 870 basis points compared to Adjusted Operating Ratio of 93.9% in the year-ago quarter. Net income in the third quarter was $20.4 million compared to net loss of $162.0 million in the year ago quarter. Adjusted EBITDA in the third quarter of 2020 increased 39% to $47.4 million compared to $34.2 million in the year-ago quarter, driven primarily by strong Wind Energy and High Security Cargo revenues and margins, which were partially offset by lower freight volumes. Rate per mile in the third quarter of 2020 of $3.28 was down 7% from the prior-year quarter, and revenue per tractor increased 4.7% to $67,500. Excluding Aveda, Specialized rate per mile and revenue per tractor increased 9% and 12%, respectively.

Flatbed Solutions - Flatbed Solutions revenue in the third quarter of 2020 decreased 15% to $144.5 million, compared to $169.8 million in the year-ago quarter. Operating income in the third quarter of 2020 was $9.3 million, compared to an operating loss of $107.9 million in the year-ago quarter. Operating ratio improved by 6,990 basis points to 93.6%, compared to 163.5% in the year-ago quarter. Adjusted Operating Ratio of 92.8% improved 220 basis points compared to 95.0% in the year-ago period. Net income in the third quarter of 2020 was $4.6 million, compared to net loss of $96.3 million in the year ago quarter. Adjusted EBITDA in the third quarter of 2020 decreased 9% to $19.0 million, compared to $20.8 million in the year-ago quarter, driven by lower freight volumes due to the impact of the COVID-19 pandemic on various industrial end markets and fleet downsizing efforts, partially offset by operational integrations and business improvement plans, as well as slightly improved freight rates and brokerage revenues. Rate per mile in the third quarter of 2020 of $1.94 was up 2% from the prior-year quarter, and revenue per tractor increased 1% to $43,000.

Balance Sheet and Free Cash Flow

At September 30, 2020, Daseke had cash and cash equivalents of $189.8 million and $82.4 million available under its revolving credit facility, for total available liquidity of $272.2 million. Total debt was $688.7 million and net debt was $498.9 million. This compares to cash and cash equivalents of $79.6 million and $84.6 million available on the revolving credit facility, total available liquidity of $164.2 million, total debt of $713.2 million, and net debt of $633.6 million on September 30, 2019. Our leverage ratio as defined by our credit agreement as of September 30, 2020 was 2.6x.

Year to date, net cash provided by operating activities was $122.4 million, cash capital expenditures were $18.0 million, and cash proceeds from the sale of excess property and equipment were $52.0 million, resulting in Free Cash Flow of $156.4 million. During the same period, capital expenditures financed with debt and capital leases net of notes receivables was $45.1 million. This compares to net cash provided by operating activities of $89.4 million, cash capital expenditures of $17.4 million, and cash proceeds from the sale of excess property and equipment of $23.8 million, resulting in Free Cash Flow of $95.8 million for the nine months ending September 30, 2019. During the same period, capital expenditures financed with debt and finance leases net of property and equipment sold for notes receivable were $65.2 million.

For the quarter, net cash provided by operating activities was $39.5 million, cash capital expenditures were $3.1 million, and cash proceeds from the sale of excess property and equipment were $15.6 million, resulting in Free Cash Flow of $52.0 million. Additionally, capital expenditures financed with debt and finance leases net of property and equipment sold for notes receivable were $15.2 million.

Outlook

We are very proud of our teams ability to execute in the face of a pandemic. These impressive quarterly numbers also highlight our capability to thrive in complex, niche markets, said Jason Bates, Executive VP and Chief Financial Officer of Daseke. However, we want to acknowledge that this quarters results benefitted from a number of High Security Cargo related projects and an unprecedented backlog of Wind projects executed at high-margins triggered by supply-demand imbalances stemming from COVID-19. It is also important to reiterate the traditional annual trends in the flatbed and specialized markets, with Q2 and Q3 being seasonally strong, and Q4 and Q1 being seasonally slower. As we look forward to 2021, uncertainty lingers with regards to the macro-economic environment and COVID recovery. Having said that, we anticipate consolidated freight volumes to continue to incrementally improve into next year, but given the record contributions from the Wind Energy and High Security Cargo projects, a broader based recovery across our diverse slate of industrial end markets will need to accelerate for us to repeat the 2020 trajectory.

Conference Call

Daseke will hold a conference call today at 11:00 a.m. Eastern time to discuss its third quarter 2020 results. 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 Companys website at https://www.daseke.com. Presentation materials will be posted at the time of the call at investor.daseke.comas well. Interested parties may also participate in the call by dialing (855) 242-9918 and entering the passcode 4193403. A replay of the conference call will be available a few hours after the event on the investor relations section of the Companys 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 worlds 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 and its reporting segments, including Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Operating Expenses, Adjusted Operating Income (Loss), Adjusted Operating Ratio, Free Cash Flow and Net Debt.

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 companys financial performance, such as a companys cost of capital, tax structure and the historic costs of depreciable assets. Also, other companies in Dasekes industry may define these nonGAAP measures differently than Daseke does, and as a result, it may be difficult to use these nonGAAP measures to compare the performance of those companies to Dasekes performance. Because of these limitations, these non-GAAP measures should not be considered a measure of the income generated by Dasekes business or discretionary cash available to it to invest in the growth of its business. Dasekes management compensates for these limitations by relying primarily on Dasekes GAAP results and using these non-GAAP measures supplementally.

You can find the reconciliation of these nonGAAP measures to the nearest comparable GAAP measures in the Reconciliation of NonGAAP Measures tables below.

Adjusted EBITDA

Daseke defines Adjusted EBITDA as net income (loss) plus (i) depreciation and amortization, (ii) interest expense, and other fees and charges associated with financings, net of interest income, (iii) income taxes, (iv) acquisition-related transaction expenses (including due diligence costs, legal, accounting and other advisory fees and costs, retention and severance payments and financing fees and expenses), (v) business transformation costs, (vi) non-cash impairment, (vii) restructuring charges, (viii) stock compensation expense, and (ix) impaired lease termination. The Companys 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 Companys operating performance over various reporting periods on a consistent basis because it removes from the Companys operating results the impact of items that, in their opinion, do not reflect the Companys 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 Companys 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)

Daseke defines Adjusted Net Income (Loss) as net income (loss) adjusted for acquisition related transaction expenses, business transformation costs, non-cash impairments, restructuring charges, amortization of intangible assets, impaired lease termination, the net impact of step-up in basis of acquired assets and unusual or non-regularly recurring expenses or recoveries. Daseke defines Adjusted Net Income (Loss) per share as Adjusted Net Income (Loss) divided by the weighted average number of shares of common stock outstanding during the period.

The Companys board of directors and executive management team use Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per share 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 Companys core operating performance. These measures also allow the Company to more effectively evaluate its operating performance by allowing it to compare the results of operations against its peers without regard to its or its peers acquisition related items, such as acquisition-related transaction expenses, non-cash impairments, amortization of intangible assets and the net impact of the step up in basis of acquired assets, as well as removing the impact of unusual or non-regularly recurring expenses or recoveries. The Company believes its presentation of Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per share are useful because it provides investors and industry analysts the same information that it uses internally for purposes of assessing its core operating performance.

Adjusted Operating Expenses, Adjusted Operating Income (Loss) and Adjusted Operating Ratio

The Company uses Adjusted Operating Expenses, Adjusted Operating Income (Loss) and Adjusted Operating Ratio as a supplement to its GAAP results in evaluating certain aspects of its business, as described below. The Company defines Adjusted Operating Expenses as (a) total operating expenses (i)less, acquisition-related transaction expenses, non-cash impairment charges, unusual or non-regularly recurring expenses or recoveries, (ii) less, business transformation costs, (iii) adjusted for impaired lease termination and (iv)further adjusted for the net impact of the step-up in basis (such as increased depreciation and amortization expense) and amortization of identifiable intangible assets resulting from acquisitions. The Company defines Adjusted Operating Income (Loss) as (a) total revenue less (b)Adjusted Operating Expenses. The Company defines Adjusted Operating Ratio as (a)Adjusted Operating Expenses, as apercentage of (b)total revenue. The Companys board of directors and executive management team view Adjusted Operating Expenses, Adjusted Operating Income (Loss) and Adjusted Operating Ratio, and its key drivers of revenue quality, growth, expense control and operating efficiency, as a very important measure of the Companys performance. The Company believes excluding acquisition-related transaction expenses, additional depreciation and amortization expenses as a result of acquisitions, unusual or non-regularly recurring expenses or recoveries and non-cash impairment enhances the comparability of its performance between periods. The Company believes its presentation of Adjusted Operating Ratio is useful because it provides investors and industry analysts the same information that it uses internally for purposes of assessing its core operating profitability.

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 Companys board of directors and executive management team use Free Cash Flow to assess the Companys 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 Companys liquidity, including its ability to reduce net debt, make strategic investments, pay dividends to common shareholders and repurchase stock.

Net Debt

Daseke defines net debt as total debt less cash and cash equivalents. The Companys board of directors and executive management team use net debt to help assess the Companys liquidity and evaluate and plan for future liquidity needs. The Company believes that the presentation of net debt is useful to investors because it provides additional information regarding the Companys overall liquidity, financial flexibility, capital structure and leverage.

ForwardLooking 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. Forward-looking statements may also include statements about the Companys goals, including its restructuring actions and cost reduction initiatives; the Companys financial strategy, liquidity and capital required for its business strategy and plans; the Companys competition and government regulations; general economic conditions; and the Companys 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 Companys 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 Companys 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 Companys business and operations resulting from the COVID-19 pandemic, the Companys ability to execute and realize all of the expected benefits of its integration, business improvement and comprehensive restructuring plans, the Companys ability to complete planned or future divestitures successfully, the Companys 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 Companys ability to generate sufficient cash to service all of the Companys 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 Dasekes filings with the Securities and Exchange Commission, available at www.sec.gov, including Dasekes 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

Daseke, Inc. and SubsidiariesConsolidated Balance Sheets(Unaudited)(In millions, except share data) September30, December31, 2020 2019ASSETS Current assets: Cash and cash equivalents $ 189.8 $ 95.7 Accounts receivable, net 172.5 197.8 Drivers? advances and other receivables 8.9 8.2 Parts supplies 3.1 3.5 Assets held for sale 0.4 ? Prepaid and other current assets 24.1 21.9 Total current assets 398.8 327.1 Property and equipment, net 379.0 439.0 Intangible assets, net 97.4 109.1 Goodwill 139.7 139.9 Right-of-use assets 127.7 95.9 Other long-term assets 33.0 29.6 Total assets $ 1,175.6 $ 1,140.6 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 15.4 $ 20.5 Accrued expenses and other liabilities 55.8 44.2 Accrued payroll, benefits and related taxes 39.9 28.2 Accrued insurance and claims 20.7 18.7 Current portion of long-term debt 55.4 59.4 Other current liabilities 52.2 48.8 Total current liabilities 239.4 219.8 Line of credit ? 1.7 Long-term debt, net of current portion 625.1 631.6 Deferred tax liabilities 69.6 69.9 Share-based payment liability 1.9 ? Other long-term liabilities 102.9 78.9 Total liabilities 1,038.9 1,001.9 Commitments and contingencies Stockholders? equity: Series A convertible preferred stock, $0.0001par value; 10,000,000 shares authorized;650,000 65.0 65.0 shares issued with liquidation preference of$65.0 at September 30, 2020 and December 31,2019Common stock, par value $0.0001 per share;250,000,000 shares authorized, 65,018,760 and64,589,075 shares issued and outstanding at ? ? September 30, 2020 and December 31, 2019,respectivelyAdditional paid-in-capital 440.4 437.5 Accumulated deficit (368.2 ) (363.4 )Accumulated other comprehensive loss (0.5 ) (0.4 )Total stockholders? equity 136.7 138.7 Total liabilities and stockholders? equity $ 1,175.6 $ 1,140.6

Daseke, Inc. and SubsidiariesConsolidated Statements of Operations and Comprehensive Income (Loss)(Unaudited)(In millions, except share and per share data) Three Months Ended Nine Months Ended September30, September30, 2020 2019 2020 2019Revenues: Company freight $ 174.8 $ 205.2 $ 522.7 $ 618.2 Owner operator 103.3 118.3 307.1 351.1 freightBrokerage 65.2 78.6 184.8 222.8 Logistics 9.9 13.5 28.8 39.0 Fuel surcharge 22.6 34.8 75.1 102.9 Total revenue 375.8 450.4 1,118.5 1,334.0 Operating expenses:Salaries, wagesand employee 95.8 127.7 305.6 371.1 benefitsFuel 20.2 34.1 67.1 105.3 Operations and 45.5 56.8 136.4 164.7 maintenanceCommunications 0.9 1.0 2.8 3.2 Purchased 127.9 155.5 374.3 458.5 freightAdministrative 12.6 21.4 50.0 54.7 expensesSales and 0.3 1.3 1.3 3.8 marketingTaxes and 3.9 4.8 12.4 14.7 licensesInsurance and 16.3 13.4 46.9 38.1 claimsDepreciation and 22.3 38.3 71.4 119.5 amortizationGain ondisposition of (3.1 ) (1.0 ) (3.9 ) (2.1 )property andequipmentImpairment ? 306.8 13.4 306.8 Restructuring 5.1 6.9 8.6 6.9 chargesTotal operating 347.7 767.0 1,086.3 1,645.2 expensesIncome (loss) 28.1 (316.6 ) 32.2 (311.2 )from operationsOther expense (income):Interest income (0.1 ) (0.3 ) (0.5 ) (0.7 )Interest expense 11.1 12.8 34.1 38.2 Write-off ofdeferred ? 2.0 ? 2.0 financing feesOther (0.6 ) ? (0.5 ) (1.3 )Total other 10.4 14.5 33.1 38.2 expenseIncome (loss)before income 17.7 (331.1 ) (0.9 ) (349.4 )taxesIncome taxexpense 2.0 (57.8 ) 0.2 (60.4 )(benefit)Net income 15.7 (273.3 ) (1.1 ) (289.0 )(loss)Othercomprehensive income (loss):Foreign currencytranslation 0.2 (0.2 ) (0.1 ) 0.3 adjustments, netof taxComprehensive $ 15.9 $ (273.5 ) $ (1.2 ) $ (288.7 )income (loss) Net income $ 15.7 $ (273.3 ) $ (1.1 ) $ (289.0 )(loss)Less dividendsto Series Aconvertible (1.2 ) (1.2 ) (3.7 ) (3.7 )preferredstockholdersNet income(loss)attributable to $ 14.5 $ (274.5 ) $ (4.8 ) $ (292.7 )commonstockholdersNet income(loss) per common share:Basic $ 0.22 $ (4.25 ) $ (0.07 ) $ (4.54 )Diluted $ 0.22 $ (4.25 ) $ (0.07 ) $ (4.54 )Weighted-averagecommon shares outstanding:Basic 64,823,973 64,583,275 64,692,039 64,525,777 Diluted 71,700,156 64,583,275 64,692,039 64,525,777 Dividendsdeclared perSeries A $ 1.91 $ 1.91 $ 5.72 $ 5.72 convertiblepreferred share

Daseke, Inc. and SubsidiariesConsolidated Statements of Cash Flow(Unaudited)(In millions) Nine Months Ended September30, 2020 2019Cash flows from operating activities Net loss $ (1.1 ) $ (289.0 )Adjustments to reconcile net loss to net cash provided by operating activitiesDepreciation 65.9 107.1 Amortization of intangible assets 5.5 12.4 Amortization of deferred financing fees 3.2 2.4 Non-cash operating lease expense 0.2 19.7 Write-off of deferred financing fees ? 2.0 Stock-based compensation expense 4.9 2.9 Deferred taxes 0.2 (60.4 )Bad debt expense 1.2 2.7 Gain on disposition of property and equipment (3.9 ) (2.1 )Impairment 13.4 306.8 Restructuring charges ? 6.9 Changes in operating assets and liabilities Accounts receivable 23.8 (23.5 )Drivers? advances and other receivables (0.7 ) (2.4 )Prepaid and other current assets (8.9 ) (2.3 )Accounts payable (5.1 ) 1.8 Accrued expenses and other liabilities 23.8 4.4 Net cash provided by operating activities 122.4 89.4 Cash flows from investing activities Purchases of property and equipment (18.0 ) (17.4 )Proceeds from sale of property and equipment 52.0 23.8 Net cash provided by investing activities 34.0 6.4 Cash flows from financing activities: Advances on line of credit 1,111.2 980.8 Repayments on line of credit (1,112.9 ) (980.8 )Principal payments on long-term debt (57.3 ) (57.8 )Deferred financing fees ? (0.4 )Series A convertible preferred stock dividends (3.7 ) (3.7 )Net cash used in financing activities (62.7 ) (61.9 ) Effect of exchange rates on cash and cash equivalents 0.4 (0.3 ) Net increase in cash and cash equivalents 94.1 33.6 Cash and cash equivalents ? beginning of period 95.7 46.0 Cash and cash equivalents ? end of period $ 189.8 $ 79.6

Daseke, Inc. and SubsidiariesConsolidated Statements of Cash Flow - (Continued)(Unaudited)(In millions) Nine Months Ended September30, 2020 2019Supplemental disclosure of cash flow information Cash paid for interest $ 30.8 $ 35.6Cash paid for income taxes $ 3.0 $ 1.6 Noncash investing and financing activities Property and equipment acquired with debt or finance $ 45.4 $ 65.6lease obligationsProperty and equipment sold for notes receivable $ 0.3 $ 0.4Right-of-use assets acquired $ 53.5 $ 33.5

Daseke, Inc. and SubsidiariesSupplemental Information: Specialized Solutions(Unaudited) Three Months Ended September30, 2020 2019 Increase(Decrease)(Dollars in $ % $ % $ %millions) REVENUE^(1): Company freight $ 129.7 55.1 $ 155.4 54.0 $ (25.7 ) (16.5 )Owner operator 37.7 16.0 49.1 17.0 (11.4 ) (23.2 )freightBrokerage 47.8 20.3 54.5 18.9 (6.7 ) (12.3 )Logistics 9.1 3.9 12.9 4.5 (3.8 ) (29.5 )Fuel surcharge 10.9 4.7 16.1 5.6 (5.2 ) (32.3 )Total revenue 235.2 100.0 288.0 100.0 (52.8 ) (18.3 ) OPERATING EXPENSES^(1):Total operating 204.1 86.8 475.6 165.1 (271.5 ) (57.1 )expensesOperating ratio 86.8 % 165.1 % Adjusted 85.2 % 93.9 % operating ratioINCOME (LOSS) $ 31.1 13.2 $ (187.6 ) (65.1 ) $ 218.7 (116.6 )FROM OPERATIONS OPERATING STATISTICS:Company miles 38.9 43.2 (4.3 ) (10.0 )Owner operator 12.1 14.6 (2.5 ) (17.1 )milesTotal miles (in 51.0 57.8 (6.8 ) (11.8 )millions)^(2) Company-operatedtractors, at 1,960 2,472 (512 ) (20.7 )quarter-endOwner-operatedtractors, at 510 699 (189 ) (27.0 )quarter-endNumber oftrailers, at 7,278 8,280 (1,002 ) (12.1 )quarter-end Company-operatedtractors, 1,958 2,479 (521 ) (21.0 )average for thequarterOwner-operatedtractors, 523 694 (171 ) (24.6 )average for thequarterTotal tractors,average for the 2,481 3,173 (692 ) (21.8 )quarter (1) Includes intersegment revenues and expenses, as applicable, which areeliminated in the Company?s consolidated results.(2) Miles are estimated based on information received as the date of filing.Miles may change quarter to quarter when final information is received fromeach operating segment.

Daseke, Inc. and SubsidiariesSupplemental Information: Specialized Solutions(Unaudited) Nine Months Ended September30, 2020 2019 Increase(Decrease)(Dollars in $ % $ % $ %millions) REVENUE^(1): Company freight $ 383.5 55.0 $ 463.8 55.3 $ (80.3 ) (17.3 )Owner operator 118.7 17.0 142.4 17.0 (23.7 ) (16.6 )freightBrokerage 133.7 19.2 148.3 17.7 (14.6 ) (9.8 )Logistics 26.4 3.8 37.1 4.4 (10.7 ) (28.8 )Fuel surcharge 34.9 5.0 46.7 5.6 (11.8 ) (25.3 )Total revenue 697.2 100.0 838.3 100.0 (141.1 ) (16.8 ) OPERATING EXPENSES^(1):Total operating 658.1 94.4 1,007.1 120.1 (349.0 ) (34.7 )expensesOperating ratio 94.4 % 120.1 % Adjusted 90.9 % 93.6 % operating ratioINCOME (LOSS) $ 39.1 5.6 $ (168.8 ) (20.1 ) $ 207.9 (123.2 )FROM OPERATIONS OPERATING STATISTICS:Company miles 117.4 128.4 (11.0 ) (8.6 )Owner operator 38.2 40.7 (2.5 ) (6.1 )milesTotal miles (in 155.6 169.1 (13.5 ) (8.0 )millions)^(2) Company-operatedtractors, at 1,960 2,472 (512 ) (20.7 )period-endOwner-operatedtractors, at 510 699 (189 ) (27.0 )period-endNumber oftrailers, at 7,278 8,280 (1,002 ) (12.1 )period-end Company-operatedtractors, 2,263 2,492 (229 ) (9.2 )average for theperiodOwner-operatedtractors, 646 674 (28 ) (4.2 )average for theperiodTotal tractors,average for the 2,909 3,166 (257 ) (8.1 )period (1) Includes intersegment revenues and expenses, as applicable, which areeliminated in the Company?s consolidated results.(2) Miles are estimated based on information received as the date of filing.Miles may change quarter to quarter when final information is received fromeach operating segment.

Daseke, Inc. and SubsidiariesSupplemental Information: Flatbed Solutions(Unaudited) Three Months Ended September30, 2020 2019 Increase(Decrease)(Dollars in $ % $ % $ %millions) REVENUE^(1): Company freight $ 47.1 32.6 $ 55.2 32.5 $ (8.1 ) (14.7 )Owner operator 67.2 46.5 71.1 41.9 (3.9 ) (5.5 )freightBrokerage 17.6 12.2 23.6 13.9 (6.0 ) (25.4 )Logistics 0.7 0.5 0.7 0.4 ? - Fuel surcharge 11.9 8.2 19.2 11.3 (7.3 ) (38.0 )Total revenue 144.5 100.0 169.8 100.0 (25.3 ) (14.9 ) OPERATING EXPENSES^(1):Total operating 135.2 93.6 277.7 163.5 (142.5 ) (51.3 )expensesOperating ratio 93.6 % 163.5 % Adjusted 92.8 % 95.0 % operating ratioINCOME (LOSS) $ 9.3 6.4 $ (107.9 ) (63.5 ) $ 117.2 (108.6 )FROM OPERATIONS OPERATING STATISTICS:Company miles 23.1 27.8 (4.7 ) (16.9 )Owner operator 35.7 38.6 (2.9 ) (7.5 )milesTotal miles (in 58.8 66.4 (7.6 ) (11.4 )millions)^(2) Company-operatedtractors, at 1,019 1,264 (245 ) (19.4 )quarter-endOwner-operatedtractors, at 1,590 1,714 (124 ) (7.2 )quarter-endNumber oftrailers, at 4,329 4,928 (599 ) (12.2 )quarter-end Company-operatedtractors, 1,077 1,265 (188 ) (14.9 )average for thequarterOwner-operatedtractors, 1,581 1,701 (120 ) (7.1 )average for thequarterTotal tractors,average for the 2,658 2,966 (308 ) (10.4 )quarter (1) Includes intersegment revenues and expenses, as applicable, which areeliminated in the Company?s consolidated results.(2) Miles are estimated based on information received as the date of filing.Miles may change quarter to quarter when final information is received fromeach operating segment.

Daseke, Inc. and SubsidiariesSupplemental Information: Flatbed Solutions(Unaudited) Nine Months Ended September30, 2020 2019 Increase(Decrease)(Dollars in $ % $ % $ %millions) REVENUE^(1): Company freight $ 147.3 33.7 $ 165.3 32.2 $ (18.0 ) (10.9 )Owner operator 193.5 44.3 213.1 41.6 (19.6 ) (9.2 )freightBrokerage 52.6 12.0 74.7 14.6 (22.1 ) (29.6 )Logistics 2.2 0.5 2.0 0.4 0.2 10.0 Fuel surcharge 41.2 9.5 57.6 11.2 (16.4 ) (28.5 )Total revenue 436.8 100.0 512.7 100.0 (75.9 ) (14.8 ) OPERATING EXPENSES^(1):Total operating 408.2 93.5 611.2 119.2 (203.0 ) (33.2 )expensesOperating ratio 93.5 % 119.2 % Adjusted 92.8 % 95.7 % operating ratioINCOME (LOSS) $ 28.6 6.5 $ (98.5 ) (19.2 ) $ 127.1 (129.0 )FROM OPERATIONS OPERATING STATISTICS:Company miles 75.4 83.0 (7.6 ) (9.2 )Owner operator 107.1 113.0 (5.9 ) (5.2 )milesTotal miles (in 182.5 196.0 (13.5 ) (6.9 )millions)^(2) Company-operatedtractors, at 1,019 1,264 (245 ) (19.4 )period-endOwner-operatedtractors, at 1,590 1,714 (124 ) (7.2 )period-endNumber oftrailers, at 4,329 4,928 (599 ) (12.2 )period-end Company-operatedtractors, 1,154 1,324 (170 ) (12.8 )average for theperiodOwner-operatedtractors, 1,564 1,665 (101 ) (6.1 )average for theperiodTotal tractors,average for the 2,718 2,989 (271 ) (9.1 )period (1) Includes intersegment revenues and expenses, as applicable, which areeliminated in the Company?s consolidated results.(2) Miles are estimated based on information received as the date of filing.Miles may change quarter to quarter when final information is received fromeach operating segment.

Daseke, Inc. and SubsidiariesReconciliation of Adjusted Operating Ratio to Operating Ratio(Unaudited)(In millions) Three Months Ended September30,(Dollars in 2020 2019 2020 2019 2020 2019millions) Consolidated Flatbed SpecializedRevenue $ 375.8 $ 450.4 $ 144.5 $ 169.8 $ 235.2 $ 288.0 Salaries, wagesand employee 95.8 127.7 29.9 35.0 60.3 82.6 benefitsFuel 20.2 34.1 7.2 12.5 13.0 21.7 Operations and 45.5 56.8 11.0 13.2 34.4 43.3 maintenancePurchased freight 127.9 155.5 67.3 77.8 64.6 85.2 Depreciation and 22.3 38.3 9.3 14.2 12.8 23.8 amortizationImpairment ? 306.8 ? 113.2 ? 193.6 Restructuring 5.1 6.9 0.2 0.9 4.9 3.5 Other operating 30.9 40.9 10.3 10.9 14.1 21.9 expensesOperating 347.7 767.0 135.2 277.7 204.1 475.6 expensesOperating income 28.1 ) 9.3 ) 31.1 )(loss) (316.6 (107.9 (187.6Operating ratio 92.5 % 170.3 % 93.6 % 163.5 % 86.8 % 165.1 %Businesstransformation 1.6 6.8 ? 0.1 0.1 0.7 costsImpairment ? 306.8 ? 113.2 ? 193.6 Restructuring 5.1 6.9 0.2 0.9 4.9 3.5 Amortization of 1.9 4.2 0.9 1.5 1.0 2.7 intangible assetsImpaired lease (2.4 ) ? ? ? (2.4 ) ? terminationNet impact ofstep-up in basis ? 5.5 ? 0.7 ? 4.8 of acquiredassetsAdjustedoperating 341.5 436.8 134.1 161.3 200.5 270.3 expensesAdjusted $ 34.3 $ 13.6 $ 10.4 $ 8.5 $ 34.7 $ 17.7 operating incomeAdjusted 90.9 % 97.0 % 92.8 % 95.0 % 85.2 % 93.9 %operating ratio

Daseke, Inc. and SubsidiariesReconciliation of Adjusted Operating Ratio to Operating Ratio(Unaudited)(In millions) Nine Months Ended September30,(Dollars in 2020 2019 2020 2019 2020 2019millions) Consolidated Flatbed SpecializedRevenue $ 1,118.5 $ 1,334.0 $ 436.8 $ 512.7 $ 697.2 $ 838.3 Salaries, wagesand employee 305.6 371.1 94.0 104.4 198.2 246.4 benefitsFuel 67.1 105.3 24.4 37.8 42.8 67.5 Operations and 136.4 164.7 32.0 40.5 104.2 123.6 maintenancePurchased 374.3 458.5 197.0 237.8 193.2 237.8 freightDepreciationand 71.4 119.5 27.8 42.6 42.9 76.4 amortizationImpairment 13.4 306.8 ? 113.2 13.4 193.6 Restructuring 8.6 6.9 0.3 0.9 8.3 3.5 Other operating 109.5 112.4 32.7 34.0 55.1 58.3 expensesOperating 1,086.3 1,645.2 408.2 611.2 658.1 1,007.1 expensesOperating 32.2 (311.2 ) 28.6 (98.5 ) 39.1 (168.8 )income (loss)Operating ratio 97.1 % 123.3 % 93.5 % 119.2 % 94.4 % 120.1 %Businesstransformation 7.7 6.8 0.1 0.1 2.1 0.7 costsImpairment 13.4 306.8 ? 113.2 13.4 193.6 Restructuring 8.6 6.9 0.3 0.9 8.3 3.5 Amortization ofintangible 5.5 12.4 2.5 4.5 3.0 7.9 assetsImpaired lease (2.4 ) ? ? ? (2.4 ) ? terminationNet impact ofstep-up in ? 18.2 ? 1.6 ? 16.6 basis ofacquired assetsAdjustedoperating 1,053.5 1,294.1 405.3 490.9 633.7 784.8 expensesAdjustedoperating $ 65.0 $ 39.9 $ 31.5 $ 21.8 $ 63.5 $ 53.5 incomeAdjusted 94.2 % 97.0 % 92.8 % 95.7 % 90.9 % 93.6 %operating ratio

Daseke, Inc. and SubsidiariesReconciliation of Net Income (Loss) to Adjusted EBITDA by Segment(Unaudited)(In millions) Three Months Ended Nine Months Ended September30,2020 September30,2020(Dollars in Flatbed Specialized Corporate Consolidated Flatbed Specialized Corporate Consolidatedmillions)Net income $ 4.6 $ 20.4 $ (9.3 ) $ 15.7 $ 14.9 $ 16.5 $ (32.5 ) $ (1.1 )(loss)Depreciationand 9.3 12.8 0.2 22.3 27.8 42.9 0.7 71.4 amortizationInterest (0.1 ) ? ? (0.1 ) (0.2 ) ? (0.3 ) (0.5 )incomeInterest 2.3 2.9 5.9 11.1 7.2 8.7 18.2 34.1 expenseIncome taxexpense 2.4 8.4 (8.8 ) 2.0 6.8 14.1 (20.7 ) 0.2 (benefit)Businesstransformation ? 0.1 1.5 1.6 0.1 2.1 5.5 7.7 costsImpairment ? ? ? ? ? 13.4 ? 13.4 Impaired lease ? (2.4 ) ? (2.4 ) ? (2.4 ) ? (2.4 )terminationRestructuring 0.2 4.9 ? 5.1 0.3 8.3 ? 8.6 Stock based 0.3 0.3 1.7 2.3 0.5 1.1 3.3 4.9 compensationAdjusted $ 19.0 $ 47.4 $ (8.8 ) $ 57.6 $ 57.4 $ 104.7 $ ) $ 136.3 EBITDA (25.8Less AvedaAdjusted ? 1.4 ? 1.4 ? (3.0 ) ? (3.0 )EBITDAAdjusted EBITDA $ 19.0 $ 46.0 $ (8.8 ) $ 56.2 $ 57.4 $ 107.7 $ (25.8 ) $ 139.3 ex-Aveda Three Months Ended Nine Months Ended September30,2019 September30,2019 Flatbed Specialized Corporate Consolidated Flatbed Specialized Corporate ConsolidatedNet loss $ (96.3 ) $ (162.0 ) $ (15.0 ) $ (273.3 ) $ (93.6 ) $ (152.1 ) $ (43.3 ) $ (289.0 )Depreciationand 14.2 23.8 0.3 38.3 42.6 76.4 0.5 119.5 amortizationInterest (0.1 ) ? (0.2 ) (0.3 ) (0.2 ) ? (0.5 ) (0.7 )incomeInterest 2.8 3.3 6.7 12.8 8.2 9.8 20.2 38.2 expenseWrite-off ofunamortized ? ? 2.0 2.0 ? ? 2.0 2.0 deferredfinancing feesIncome taxexpense (14.2 ) (29.1 ) (14.5 ) (57.8 ) (12.6 ) (25.8 ) (22.0 ) (60.4 )(benefit)Businesstransformation 0.1 0.7 6.0 6.8 0.1 0.7 6.0 6.8 costsImpairment 113.2 193.6 ? 306.8 113.2 193.6 ? 306.8 Restructuring 0.9 3.5 2.5 6.9 0.9 3.5 2.5 6.9 Stock based 0.2 0.4 0.4 1.0 0.5 1.3 1.1 2.9 compensationAdjusted $ 20.8 $ 34.2 $ ) $ 43.2 $ 59.1 $ 107.4 $ ) $ 133.0 EBITDA (11.8 (33.5Less AvedaAdjusted ? 2.3 ? 2.3 ? 14.6 ? 14.6 EBITDAAdjusted EBITDA $ 20.8 $ 31.9 $ (11.8 ) $ 40.9 $ 59.1 $ 92.8 $ (33.5 ) $ 118.4 ex-Aveda

Daseke, Inc. and SubsidiariesReconciliation of Net Income (Loss) to Adjusted Net Income(Unaudited)(In millions) Three Months Ended Nine Months Ended September30, September30,(Dollars in millions, except 2020 2019 2020 2019share and per share data)Net income (loss) $ 15.7 $ (273.3 ) $ (1.1 ) $ (289.0 )Add: Business transformation costs 1.6 6.8 7.7 6.8 Impairment ? 306.8 13.4 306.8 Restructuring 5.1 6.9 8.6 6.9 Amortization of intangible 1.9 4.2 5.5 12.4 assetsImpaired lease termination (2.4 ) ? (2.4 ) ? Net impact of step-up in basis ? 5.5 ? 18.2 of acquired assetsTax impact of impairments ? (52.2 ) (2.7 ) (52.2 )Adjusted Net Income $ 21.9 $ 4.7 $ 29.0 $ 9.9

Daseke, Inc. and SubsidiariesReconciliation of cash flows from operating activities to Free Cash Flow(Unaudited)(In millions) Three Months Ended Nine Months Ended September30, September30,(Dollars in 2020 2019 2020 2019millions)Net cashprovided by $ 39.5 $ 34.5 $ 122.4 $ 89.4 operatingactivitiesPurchases ofproperty and (3.1 ) (5.3 ) (18.0 ) (17.4 )equipmentProceeds fromsale of 15.6 7.3 52.0 23.8 property andequipmentFree Cash Flow $ 52.0 $ 36.5 $ 156.4 $ 95.8

Daseke, Inc. and SubsidiariesReconciliation of total debt to net debt(Unaudited)(In millions) As of September30, 2020 2019Term Loan Facility $ 484.8 $ 489.7 Equipment term loans 174.1 197.5 Finance lease obligations 29.8 26.0 Total debt 688.7 713.2 Less: cash and cash equivalents (189.8 ) (79.6 )Net debt $ 498.9 $ 633.6