UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2021~~2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission File Number: 001-37509

DASEKE, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		~~001-37509~~ (Commission File Number)		47-3913221 (IRS Employer Identification No.)


15455 Dallas Parkway, Suite 550 Addison, Texas		75001
(Address of ~~Principal Executive Offices)~~principal executive offices)		(Zip Code)

~~Registrant’s Telephone Number, Including Area Code:~~ (972) 248-0412

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	DSKE	The NASDAQ Stock Market LLC
~~Warrants, each exercisable for one half of a share of Common Stock at an exercise price of $5.75 per half share~~	~~DSKEW~~	~~The~~ ~~NASDAQ~~ ~~Stock Market LLC~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


☐ Large accelerated filer				 Accelerated filer
☐ Non-accelerated filer				☐ Smaller reporting company
				☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No 

Common shares of the registrant outstanding at ~~October~~July 22, ~~2021~~2022 were ~~62,489,273~~63,505,194.

Table of Contents

DASEKE, INC.

FORM 10-Q

For the Quarterly Period Ended ~~September~~June 30, ~~2021~~2022

INDEX



		Page No.
Part I. Financial Information		1
Item 1. Financial Statements (Unaudited)		1
Consolidated Balance Sheets		1
Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~		2
Consolidated Statements of Changes in Stockholders' Equity		3
Consolidated Statements of Cash Flows		5
Notes to Consolidated Financial Statements		7
Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations		1918
Item 3. Quantitative and Qualitative Disclosures About Market Risk		33
Item 4. Controls and Procedures		33
Part II. Other Information		33
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		34
Item 6. Exhibits		35
~~Item 4. Controls and Procedures~~Signatures		35
~~Part II. Other Information~~		35
~~Item 1. Legal Proceedings~~		35
~~Item 1A. Risk Factors~~		35
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~		36
~~Item 6. Exhibits Index~~		37
~~Signatures~~		38

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this Report) of Daseke, Inc. (Daseke or the Company) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except as otherwise indicated by the context, references in this Report to “we,” “us” and “our” are to the consolidated business of the Company. All statements in this Report, ~~including those made by the management of the Company,~~ other than statements of historical fact, are forward-looking statements. ~~These forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof.~~ 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. Forward-looking statements may include statements about the Company’s goals; the Company’s business strategy and plans; 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 Report, ~~(or, in the case of forward-looking statements incorporated herein by reference, as of the date of the applicable filed document),~~ 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~~Readers are cautioned not to place undue reliance on the forward-looking statements.

Forward-looking statements are subject to risks and uncertainties (many of which are beyond the Company’s control) that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements 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; impact to the Company’s business~~markets, and ~~operations resulting from the COVID-19 pandemic;~~inflationary cost pressures; the Company’s ability to adequately address downward pricing and other competitive pressures; the Company’s insurance or claims expense; driver shortages and increases in driver compensation or owner operator contracted rates; the Company’s ability to execute and realize all of the expected benefits of its integration, business improvement and comprehensive restructuring plans; loss of key personnel; the Company’s ability to realize all of the intended benefits from recent or future acquisitions; the Company’s ability to complete recent or future divestitures successfully; 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; impact to the Company’s business and operations resulting from the COVID-19 pandemic; seasonality and the impact of weather and other catastrophic events; the Company’s ability to secure the services of third-party capacity providers on competitive terms; loss of key personnel; a failure of the Company’s information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data or other security breach, or cybersecurity incidents; 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 realize all of the intended benefits from acquisitions and investments; the Company’s ability to complete divestitures successfully; the Company’s ability to generate sufficient cash to service all of the Company’s indebtedness and the Company’s ability to finance its capital requirements; 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; ~~insurance and claims expenses;~~ and litigation and governmental proceedings. For additional information regarding known material factors that could cause the Company’s actual results to differ from its projected results, please see the Company’s filings with the Securities and Exchange Commission (the SEC), particularly the section titled “Part I. Item 1A. Risk Factors” in the Company’s Annual Report on Form ~~10-K/A,~~10-K, filed with the SEC on ~~May 6, 2021.~~February 23, 2022. Additional risks or uncertainties that are not currently known to us, that we currently deem to be immaterial, or that could apply to any company could also materially adversely affect our business, financial condition, or future results.

All forward-looking statements, expressed or implied, attributed to the Company or persons acting on its behalf are expressly qualified in their entirety by this cautionary statement. ~~This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on its behalf may issue.~~

Table of Contents

~~Part~~PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

DASEKE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions, except per share data)


	September 30,			December 31,			June 30,			December 31,
	2021			2020			2022			2021
ASSETS
Current assets:
Cash and cash equivalents	$	143.6		$	176.2		$	152.0		$	147.5
Accounts receivable, net of allowance of $2.1 at September 30, 2021 and $3.0 at December 31, 2020		189.1			154.4
Accounts receivable, net of allowance of $2.2 and $2.1 at June 30, 2022 and December 31, 2021, respectively								221.4			172.3
Drivers’ advances and other receivables		8.1			8.0			10.0			7.7
Other current assets		27.0			26.5			28.6			22.6
Total current assets		367.8			365.1			412.0			350.1

Property and equipment, net		394.2			402.7			421.0			397.7
Intangible assets, net		88.6			93.8			81.3			86.9
Goodwill		140.1			140.1			142.4			140.1
Right-of-use assets		114.5			121.1			109.3			108.3
Other non-current assets		4.5			4.1			3.6			4.3
Total assets	$	1,109.7		$	1,126.9		$	1,169.6		$	1,087.4

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16.1		$	16.5		$	17.9		$	14.7
Accrued expenses and other liabilities		52.2			35.7			61.1			43.9
Accrued payroll, benefits and related taxes		38.1			29.9			30.8			32.9
Accrued insurance and claims		21.3			23.7			38.5			26.8
Current portion of long-term debt		55.7			54.0			60.4			55.5
Warrant liability		7.5			—			0			4.7
Operating lease liabilities		33.6			30.9
Current operating lease liabilities								34.5			33.7
Total current liabilities		224.5			190.7			243.2			212.2

Line of credit								0			0
Long-term debt, net of current portion		536.2			618.6			536.9			531.4
Deferred tax liabilities		87.5			70.0			86.1			85.1
Non-current operating lease liabilities		87.7			96.0			81.0			81.1
Warrant liability		—			6.3
Other non-current liabilities		5.3			6.5			3.7			1.6
Total liabilities		941.2			988.1			950.9			911.4

Commitments and contingencies (Note 9)
Commitments and contingencies (Note 10)

Stockholders’ equity:
Series A convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized; 650,000 shares issued with liquidation preference of $65.0 at September 30, 2021 and December 31, 2020		65.0			65.0
Common stock, par value $0.0001 per share; 250,000,000 shares authorized, 62,485,747 and 65,023,174 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		0			0
Series A convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized; 650,000 shares issued with liquidation preference of $65.0 at June 30, 2022 and December 31, 2021								65.0			65.0
Common stock, par value $0.0001 per share; 250,000,000 shares authorized, 63,504,018 and 62,489,278 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively								0			0
Additional paid-in-capital		386.2			401.6			402.3			387.8
Accumulated deficit		(282.6	)		(327.8	)		(248.5	)		(276.8	)
Accumulated other comprehensive loss		(0.1	)		—			(0.1	)		0
Total stockholders’ equity		168.5			138.8			218.7			176.0
Total liabilities and stockholders’ equity	$	1,109.7		$	1,126.9		$	1,169.6		$	1,087.4

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

DASEKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited)

(Dollars in millions, except per share data)


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Revenues:
Company freight	$	166.6		$	174.8		$	475.3		$	522.7		$	167.8		$	163.6		$	323.8		$	308.7
Owner operator freight		131.1			103.3			365.3			307.1			137.9			129.1			267.7			234.2
Brokerage		81.9			65.2			197.1			184.8			91.9			66.7			170.1			115.2
Logistics		9.7			9.9			28.9			28.8			14.0			10.7			25.4			19.2
Fuel surcharge		35.3			22.6			95.9			75.1			69.7			33.9			115.3			60.6
Total revenue		424.6			375.8			1,162.5			1,118.5			481.3			404.0			902.3			737.9

Operating expenses:
Salaries, wages and employee benefits		96.6			95.8			280.7			305.6			97.2			93.4			194.7			184.1
Fuel		26.8			20.2			79.1			67.1			45.3			27.0			80.4			52.4
Operations and maintenance		40.5			45.5			108.1			136.4			40.1			37.3			74.5			67.6
Communications		0.9			0.9			3.1			2.8			1.0			1.1			1.9			2.2
Purchased freight		167.5			127.9			444.2			374.3			197.0			155.3			368.6			276.7
Administrative expenses		17.0			12.6			46.2			50.0
Administrative														17.1			12.7			34.0			29.2
Sales and marketing		0.5			0.3			1.5			1.3			0.6			0.5			1.0			1.1
Taxes and licenses		3.5			3.9			11.2			12.4			4.1			3.8			7.7			7.7
Insurance and claims		13.9			16.3			40.6			46.9			17.6			9.9			41.0			26.7
Acquisition-related transaction expenses														1.9			0			3.3			0
Depreciation and amortization		22.3			22.3			66.7			71.4			22.7			22.2			44.3			44.4
Gain on disposition of property and equipment		(5.4	)		(3.1	)		(13.1	)		(3.9	)		(4.5	)		(4.6	)		(9.1	)		(7.7	)
Impairment		0			0			0			13.4			7.8			0			7.8			0
Restructuring charges		0.1			5.1			0.2			8.6			0.6			0.1			1.2			0.1
Total operating expenses		384.2			347.7			1,068.5			1,086.3			448.5			358.7			851.3			684.5
Income from operations		40.4			28.1			94.0			32.2			32.8			45.3			51.0			53.4

Other expense (income):
Interest income		(0.1	)		(0.1	)		(0.2	)		(0.5	)		(0.7	)		(0.1	)		(0.8	)		(0.2	)
Interest expense		7.3			11.1			26.1			34.1			7.5			7.6			14.6			18.7
Change in fair value of warrant liability		3.4			3.0			1.2			0.9			0			(7.8	)		(4.7	)		(2.2	)
Other		0.2			(0.6	)		(0.6	)		(0.5	)		0.6			(0.4	)		0.1			(0.8	)
Total other expense		10.8			13.4			26.5			34.0
Total other expense (income)														7.4			(0.7	)		9.2			15.5

Income (loss) before income taxes		29.6			14.7			67.5			(1.8	)
Income before income taxes														25.4			46.0			41.8			37.9
Income tax expense		8.7			2.0			18.6			0.2			7.7			10.7			11.1			9.9
Net income (loss)		20.9			12.7			48.9			(2.0	)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $0.0, $0.1, $0.0 and $(0.1), respectively		(0.5	)		0.2			(0.1	)		(0.1	)
Comprehensive income (loss)	$	20.4		$	12.9		$	48.8		$	(2.1	)
Net income														17.7			35.3			30.7			28.0
Other comprehensive income:
Foreign currency translation adjustments														(1.2	)		0.2			(0.1	)		0.4
Comprehensive income													$	16.5		$	35.5		$	30.6		$	28.4

Net income (loss)	$	20.9		$	12.7		$	48.9		$	(2.0	)
Net income													$	17.7		$	35.3		$	30.7		$	28.0
Less dividends to Series A convertible preferred stockholders		(1.2	)		(1.2	)		(3.7	)		(3.7	)		(1.2	)		(1.3	)		(2.5	)		(2.5	)
Net income (loss) attributable to common stockholders	$	19.7		$	11.5		$	45.2		$	(5.7	)
Income (loss) per common share:
Net income attributable to common stockholders													$	16.5		$	34.0		$	28.2		$	25.5
Earnings per common share:
Basic	$	0.31		$	0.17		$	0.70		$	(0.09	)	$	0.26		$	0.52		$	0.44		$	0.39
Diluted	$	0.30		$	0.17		$	0.68		$	(0.09	)	$	0.24		$	0.49		$	0.43		$	0.38
Weighted-average common shares outstanding:
Basic		62,583,115			64,823,973			64,159,551			64,692,039			63,470,040			64,842,620			63,182,277			64,960,833
Diluted		70,000,603			71,700,156			71,207,581			64,692,039			71,555,039			71,866,303			71,319,113			66,154,571
Dividends declared per Series A convertible preferred share	$	1.91		$	1.91		$	5.72		$	5.72		$	1.91		$	1.91		$	3.81		$	3.81

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

DASEKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2021~~2022

(Unaudited)

(Dollars in millions)

Series A Convertible

Accumulated

Preferred Stock

Common Stock

Other

Par

Additional

Accumulated

Comprehensive

Shares

Amount

Shares

Value

Paid-In Capital

Deficit

Income (Loss)

Total

Balance at January 1, 2021

650,000

$
65.0

65,023,174

$
—

$
401.6

$
(327.8
)

$
—

$
138.8

Exercise of options

—

—

149,545

—

0.6

—

—

0.6

Vesting of restricted stock units

—

—

5,737

—

(0.8
)

—

—

(0.8
)
Series A convertible preferred stock dividend

—

—

—

—

—

(1.2
)

—

(1.2
)
Stock-based compensation expense

—

—

—

—

1.4

—

—

1.4

Foreign currency translation adjustments

—

—

—

—

—

—

0.2

0.2

Net loss

—

—

—

—

—

(7.3
)

—

(7.3
)
Balance at March 31, 2021

650,000

$
65.0

65,178,456

$
—

$
402.8

$
(336.3
)

$
0.2

$
131.7

Exercise of options

—

—

—

—

—

—

—

—

Vesting of restricted stock units

—

—

143,601

—

(0.3
)

—

—

(0.3
)
Series A convertible preferred stock dividend

—

—

—

—

—

(1.3
)

—

(1.3
)
Common stock repurchased and retired

—

—

(1,517,623
)

—

(10.5
)

—

—

(10.5
)
Stock-based compensation expense

—

—

—

—

2.9

—

—

2.9

Foreign currency translation adjustments

—

—

—

—

—

—

0.2

0.2

Net income

—

—

—

—

—

35.3

—

35.3

Balance at June 30, 2021

650,000

$
65.0

63,804,434

$
—

$
394.9

$
(302.3
)

$
0.4

$
158.0

Exercise of options

—

—

8,000

—

(0.1
)

—

—

(0.1
)
Vesting of restricted stock units

—

—

155,690

—

(0.9
)

—

—

(0.9
)
Series A convertible preferred stock dividend

—

—

—

—

—

(1.2
)

—

(1.2
)
Common stock repurchased and retired

—

—

(1,482,377
)

—

(9.8
)

—

—

(9.8
)
Stock-based compensation expense

—

—

—

—

2.1

—

—

2.1

Foreign currency translation adjustments

—

—

—

—

—

—

(0.5
)

(0.5
)
Net income

—

—

—

—

—

20.9

—

20.9

Balance at September 30, 2021

650,000

$
65.0

62,485,747

$
—

$
386.2

$
(282.6
)

$
(0.1
)

$
168.5


	Series A Convertible														Accumulated
	Preferred Stock				Common Stock										Other
							Par		Additional			Accumulated			Comprehensive
	Shares		Amount		Shares		Value		Paid-In Capital			Deficit			Loss			Total
Balance at January 1, 2022		650,000	$	65.0		62,489,278	$	—	$	387.8		$	(276.8	)	$	—		$	176.0
Exercise of options		—		—		91,425		—		0.8			—			—			0.8
Exercise of warrants		—		—		817,648		—		9.4			—			—			9.4
Vesting of restricted stock units		—		—		43,450		—		—			—			—			—
Series A convertible preferred stock dividend		—		—		—		—		—			(1.2	)		—			(1.2	)
Stock-based compensation expense		—		—		—		—		2.2			—			—			2.2
Net income		—		—		—		—		—			13.0			—			13.0
Balance at March 31, 2022		650,000	$	65.0		63,441,801	$	—	$	400.2		$	(265.0	)	$	—		$	200.2
Exercise of options		—		—		—		—		—			—			—			—
Vesting of restricted stock units		—		—		62,217		—		(0.2	)		—			—			(0.2	)
Series A convertible preferred stock dividend		—		—		—		—		—			(1.2	)		—			(1.2	)
Stock-based compensation expense		—		—		—		—		2.3			—			—			2.3
Foreign currency translation adjustments		—		—		—		—		—			—			(0.1	)		(0.1	)
Net income		—		—		—		—		—			17.7			—			17.7
Balance at June 30, 2022		650,000	$	65.0		63,504,018	$	—	$	402.3		$	(248.5	)	$	(0.1	)	$	218.7

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

DASEKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2020~~2021

(Unaudited)

(Dollars in millions)

Series A Convertible

Accumulated

Preferred Stock

Common Stock

Other

Par

Additional

Accumulated

Comprehensive

Shares

Amount

Shares

Value

Paid-In Capital

Deficit

Income (Loss)

Total

Balance at January 1, 2020

650,000

$
65.0

64,589,075

$
—

$
396.9

$
(327.0
)

$
(0.4
)

$
134.5

Vesting of restricted stock units

—

—

8,950

—

—

—

—

—

Series A convertible preferred stock dividend

—

—

—

—

—

(1.2
)

—

(1.2
)
Stock-based compensation expense

—

—

—

—

0.9

—

—

0.9

Foreign currency translation adjustments

—

—

—

—

—

—

(0.5
)

(0.5
)
Net loss

—

—

—

—

—

(16.3
)

—

(16.3
)
Balance at March 31, 2020

650,000

$
65.0

64,598,025

$
—

$
397.8

$
(344.5
)

$
(0.9
)

$
117.4

Vesting of restricted stock units

—

—

129,400

—

(0.1
)

—

—

(0.1
)
Series A convertible preferred stock dividend

—

—

—

—

—

(1.3
)

—

(1.3
)
Stock-based compensation expense

—

—

—

—

1.1

—

—

1.1

Foreign currency translation adjustments

—

—

—

—

—

—

0.2

0.2

Net income

—

—

—

—

—

1.6

—

1.6

Balance at June 30, 2020

650,000

$
65.0

64,727,425

$
—

$
398.8

$
(344.2
)

$
(0.7
)

$
118.9

Vesting of restricted stock units

—

—

291,334

—

—

—

—

—

Exercise of warrant

—

—

1

—

—

—

—

—

Series A convertible preferred stock dividend

—

—

—

—

—

(1.2
)

—

(1.2
)
Stock-based compensation expense

—

—

—

—

1.0

—

—

1.0

Foreign currency translation adjustments

—

—

—

—

—

—

0.2

0.2

Net income

—

—

—

—

—

12.7

—

12.7

Balance at September 30, 2020

650,000

$
65.0

65,018,760

$
—

$
399.8

$
(332.7
)

$
(0.5
)

$
131.6


	Series A Convertible															Accumulated
	Preferred Stock				Common Stock											Other
								Par		Additional			Accumulated			Comprehensive
	Shares		Amount		Shares			Value		Paid-In Capital			Deficit			Income		Total
Balance at January 1, 2021		650,000	$	65.0		65,023,174		$	—	$	401.6		$	(327.8	)	$	—	$	138.8
Exercise of options		—		—		149,545			—		0.6			—			—		0.6
Vesting of restricted stock units		—		—		5,737			—		(0.8	)		—			—		(0.8	)
Series A convertible preferred stock dividend		—		—		—			—		—			(1.2	)		—		(1.2	)
Stock-based compensation expense		—		—		—			—		1.4			—			—		1.4
Foreign currency translation adjustments		—		—		—			—		—			—			0.2		0.2
Net loss		—		—		—			—		—			(7.3	)		—		(7.3	)
Balance at March 31, 2021		650,000	$	65.0		65,178,456		$	—	$	402.8		$	(336.3	)	$	0.2	$	131.7
Vesting of restricted stock units		—		—		143,601			—		(0.3	)		—			—		(0.3	)
Series A convertible preferred stock dividend		—		—		—			—		—			(1.3	)		—		(1.3	)
Common stock repurchased and retired		—		—		(1,517,623	)		—		(10.5	)		—			—		(10.5	)
Stock-based compensation expense		—		—		—			—		2.9			—			—		2.9
Foreign currency translation adjustments		—		—		—			—		—			—			0.2		0.2
Net income		—		—		—			—		—			35.3			—		35.3
Balance at June 30, 2021		650,000	$	65.0		63,804,434		$	—	$	394.9		$	(302.3	)	$	0.4	$	158.0

The accompanying notes are an integral part of the consolidated financial statements.

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DASEKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)


	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2021			2020			2022			2021
Cash flows from operating activities
Net income (loss)	$	48.9		$	(2.0	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Net income							$	30.7		$	28.0
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		61.5			65.9			40.9			40.9
Amortization of intangible assets		5.2			5.5			3.4			3.5
Amortization of deferred financing fees		1.4			3.2			0.6			1.1
Non-cash operating lease expense		1.0			0.2			(0.1	)		(0.8	)
Change in fair value of warrant liability		1.2			0.9			(4.7	)		(2.2	)
Write-off of deferred financing fees		1.2			0			0			1.1
Stock-based compensation expense		5.3			4.9			6.4			3.2
Deferred taxes		17.5			0.2			1.1			9.8
Bad debt (recovery) expense		(0.3	)		1.2
Bad debt expense								0.3			(0.3	)
Gain on disposition of property and equipment		(13.1	)		(3.9	)		(9.1	)		(7.7	)
Impairment		0			13.4			7.8			0
Changes in operating assets and liabilities
Accounts receivable		(34.5	)		23.8			(46.1	)		(34.8	)
Drivers’ advances and other receivables		0.4			(0.7	)		(4.7	)		0.6
Other current assets		(0.7	)		(8.9	)		(3.9	)		1.1
Accounts payable		(0.4	)		(5.1	)		3.2			(0.3	)
Accrued expenses and other liabilities		21.1			23.8			26.1			14.9
Net cash provided by operating activities		115.7			122.4			51.9			58.1

Cash flows from investing activities
Purchases of property and equipment		(34.2	)		(18.0	)		(25.2	)		(18.0	)
Proceeds from sale of property and equipment		47.9			52.0			20.4			26.6
Net cash provided by investing activities		13.7			34.0
Cash paid for acquisitions, net of cash received								(19.3	)		0
Net cash (used in) provided by investing activities								(24.1	)		8.6

Cash flows from financing activities:
Advances on line of credit		1,202.1			1,111.2			876.6			747.2
Repayments on line of credit		(1,202.1	)		(1,112.9	)		(876.6	)		(747.2	)
Principal payments on long-term debt		(232.3	)		(57.3	)		(31.3	)		(212.4	)
Proceeds from long-term debt		97.5			0			0			97.5
Payments of deferred financing fees		(3.4	)		0			0			(3.4	)
Repurchases of common stock		(20.4	)		0
Exercise of options, net		0.4			0
Repurchase of common stock								0			(10.5	)
Exercise of stock options, net								0.8			0.4
Exercise of warrants								9.4			0
Series A convertible preferred stock dividends		(3.7	)		(3.7	)		(2.5	)		(2.5	)
Net cash used in financing activities		(161.9	)		(62.7	)		(23.6	)		(130.9	)

Effect of exchange rates on cash and cash equivalents		(0.1	)		0.4			0.3			(0.3	)

Net increase (decrease) in cash and cash equivalents		(32.6	)		94.1			4.5			(64.5	)
Cash and cash equivalents – beginning of period		176.2			95.7			147.5			176.2
Cash and cash equivalents – end of period	$	143.6		$	189.8		$	152.0		$	111.7

The accompanying notes are an integral part of the consolidated financial statements.

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DASEKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)

(Unaudited)

(Dollars in millions)


	Nine Months Ended				Six Months Ended
	September 30,				June 30,
	2021		2020		2022		2021
Supplemental disclosure of cash flow information
Cash paid for interest	$	22.4	$	30.8	$	14.3	$	15.1
Cash paid for income taxes	$	4.7	$	3.0	$	14.0	$	3.4

Noncash investing and financing activities
Property and equipment acquired with debt or finance lease obligations	$	55.0	$	45.4	$	41.3	$	29.2
Property and equipment sold for notes receivable	$	0.5	$	0.3
Right-of-use assets acquired	$	21.4	$	53.5	$	18.7	$	16.5

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Daseke ~~Inc.’s (the Company or Daseke) wholly-owned subsidiary Daseke Companies, Inc., was incorporated in December 2008 and began operations on January 1, 2009. Daseke~~ is ~~the~~a premier North American transportation solutions specialist dedicated to servicing challenging industrial end-markets through experienced people and a fleet of more than 4,500 tractors and 11,000 flatbed and specialized trailers, and has operations throughout the United States, Canada and Mexico. The Company also provides logistical planning and warehousing services to customers. The Company is subject to regulation by the Department of Transportation, the Department of Defense, the Department of Energy, and various state regulatory authorities in the United States. The Company is also subject to regulation by the Ministries of Transportation and Communications and various provincial regulatory authorities in Canada.

Basis of Presentation

These interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (US GAAP) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ended December 31, ~~2021.~~2022.

The consolidated balance sheet as of December 31, ~~2020~~2021 has been derived from the audited consolidated financial statements at that date. On May 6, 2021, the Company filed an Amended Annual Report on Form 10-K/A (Amended 10-K) in order to restate the financial statements to reflect warrants as a liability and changes in fair value recorded as non-cash income or expense. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes for the year ended December 31, ~~2020~~2021 as set forth in the Company’s ~~Amended 10-K.~~Annual Report on Form 10-K, filed with the SEC on February 23, 2022.

Fair Value Measurements

The Company follows the accounting guidance for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a framework for measuring fair value and expands disclosures about fair value measurements. The three levels of the fair value framework are as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities.

Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 – Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

A financial asset or liability’s classification within the framework is determined based on the lowest level of input that is significant to the fair value measurement.

The Company may be required, on a non-recurring basis, to adjust the carrying value of the Company’s property and equipment, intangible assets, goodwill and ~~goodwill.~~contingent consideration. When necessary, these valuations are determined by the Company using Level 3 inputs. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence that impairment may exist.

The Company’s warrant liabilities are included within the Level 1 and Level 3 fair value hierarchy. ~~The fair value~~There was 0 warrant liability as of the Public Warrants is determined using the closing price of the warrants on the NASDAQ market. The fair value of the Private Placement Warrants is determined using the Black-Scholes option pricing formula. The primary unobservable input utilized in determining the fair value of the Private Warrants is the expected volatility. The expected volatility was estimated considering observable Daseke public warrant pricing, Daseke’s own historical volatility and the volatility of guideline public companies.June 30, 2022.

The following table sets forth by level within the fair value hierarchy the Company’s ~~assets and liabilities~~warrant liability that were accounted for at fair value as of December 31, 2021 (in millions):

Fair value as of September 30, 2021

Liabilities:

Level 1

Level 2

Level 3

Total

Warrant liability

$
4.3

$
—

$
3.2

$
7.5

Total fair value

$
4.3

$
—

$
3.2

$
7.5

~~Table of Contents~~


	Fair value as of December 31, 2020								Fair value as of December 31, 2021
Liabilities:	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Warrant liability	$	3.6	$	—	$	2.7	$	6.3	$	2.7	$	0	$	2.0	$	4.7
Total fair value	$	3.6	$	—	$	2.7	$	6.3	$	2.7	$	0	$	2.0	$	4.7

The table below is a summary of the changes in the fair value of the warrant liability within the Level 3 fair value hierarchy for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 (in millions):


	Six Months Ended
	June 30, 2022
Balance at beginning of period	$	2.0
Change in fair value		(2.0	)
Balance at end of period	$	0

Nine Months Ended

September 30, 2021

Balance at beginning of period

$
2.7

Change in fair value

0.5

Balance at end of period

$
3.2

Table of Contents

Common Stock Purchase Warrants

The Company’s common stock purchase warrants expired in accordance with their terms on February 27, 2022 and are no longer exercisable. During 2022, prior to their expiration, there were 1,635,296 warrants exercised for 817,648 shares of the Company’s common stock in exchange for $9.4 million in proceeds to the Company.

Recently Issued Accounting Pronouncements

In August 2020, the ~~FASB~~Financial Accounting Standards Board (the FASB) issued ASU 2020-06 – Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The guidance simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The ~~amendments are effective for the~~ Company ~~for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The~~adopted this guidance ~~must be adopted~~ as of ~~the beginning of the fiscal year of adoption. ASU 2020-06~~ isJanuary 1, 2022. The adoption did not ~~expected to~~ have a material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04 – Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying ~~U.S.~~US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The ~~amendments~~provisions of this update are effective for all entities as of March 20, 2020 through December 31, 2022 and apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. In addition, in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) – Scope, to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2020-04 is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12 – Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The ~~amendments in ASU2019~~-12~~will become effective for the~~ Company onadopted this guidance as of January 1, 2022. ~~Early~~The adoption ~~is permitted, including adoption in any interim period.~~ ~~ASU 2019-12~~ isof this standard did not ~~expected to~~ have a material impact on the ~~Company’s~~Company's consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses (Topic 326). ASU 2016-13 requires the use of an “expected loss” model on certain types of financial instruments. The ASU sets forth a “current expected credit loss” ~~(CECL)~~ model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. In addition, in March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures to improve the decision usefulness of information provided to investors concerning certain loan refinancings, restructurings and writeoffs. The new standard will become effective for the Company beginning with the first quarter of 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.

Table of Contents

Lease Income

The Company leases tractors and trailers to certain of its owner \ operators and accounts for these transactions as operating leases. These leases typically have terms of 30 to 72 months and are collateralized by a security interest in the related revenue equipment. The Company recognizes income for these leases as payments are received over the lease term, which are reported in purchased freight on the consolidated statements of operations and comprehensive ~~income (loss).~~income. The Company's equipment leases may include options for the lessee to purchase the equipment at the end of the lease term or terminate the lease prior to the end of the lease term. When an asset reaches the end of its useful economic life, the Company disposes of the asset.

~~Table of Contents~~

Lease income from lease payments related to these operating leases for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was $~~7.6~~8.1 million and $~~20.7~~15.7 million, respectively. Lease income from lease payments related to these operating leases for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was $~~6.1~~7.0 million and $~~18.5~~13.0 million, respectively.

NOTE 2 – ACQUISITIONS

On March 3, 2022, the Company acquired 100% of the outstanding stock of SJ Transportation Co., Inc. (SJ Transportation) for consideration net of cash acquired of $19.3 million, which was funded with cash on hand. The acquisition was a stock purchase under US GAAP. A Section 338(h)(10) election is being filed for the entity acquired which will deem the acquisition as an asset purchase for tax purposes; therefore approximately $8.1 million of the values assigned to goodwill are expected to be deductible for tax purposes. Approximately $0.2 million of transaction expenses were incurred in the acquisition, which are not deductible for tax purposes.

The following is a summary of the preliminary allocation of the purchase price paid to the fair values of the net assets, net of cash acquired (in millions):


	SJ Transportation
Accounts receivable	$	3.4
Other current assets		1.8
Property and equipment		10.0
Goodwill		8.1
Accounts payable and other liabilities		(4.0	)
Total	$	19.3

The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed at estimated fair values as of the acquisition date, which were based, in part, upon outside preliminary appraisals for certain assets and subject to change when additional information concerning final asset and liability values is obtained.

The Company has not completed its assessments of the fair value of purchased intangible assets and no value has been allocated to them at this time. The final purchase price allocations may result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.

For the three months ended June 30, 2022, revenue and net income of the acquired company, post-acquisition date, was $6.8 million and $0.6 million, respectively, and for the six months ended June 30, 2022, $8.7 million and $0.7 million, respectively.

Supplemental Pro Forma Information (Unaudited)

The following supplemental pro forma financial information reflects the SJ Transportation acquisition as if it occurred on January 1, 2021 (in millions). This pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the pro forma events taken place on January 1, 2021. Further, the pro forma financial information does not purport to project the future operating results of the consolidated company.


	Three Months Ended June 30,					Six Months Ended June 30,
(in millions, except per share amounts)		2022		2021			2022		2021
Pro forma revenue		$	481.3	$	409.9		$	906.2	$	749.9
Pro forma net income		$	17.7	$	36.0		$	30.9	$	29.4
Pro forma earnings per common share:
Basic		$	0.26	$	0.53		$	0.44	$	0.41
Diluted		$	0.24	$	0.50		$	0.43	$	0.40

Table of Contents

NOTE 3 – OTHER CURRENT ASSETS

The components of other current assets are as follows as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 (in millions):

September 30,

December 31,

2021

2020

Insurance

$
7.9

$
12.0

Licensing, permits and tolls

4.7

4.9

Parts supplies

3.5

3.1

Highway and fuel taxes

5.7

1.1

Other prepaids

1.9

3.2

Other assets

1.7

0.6

Income tax receivable

1.6

1.6

$
27.0

$
26.5


	June 30,		December 31,
	2022		2021
Prepaid insurance	$	7.7	$	7.5
Prepaid licensing, permits and tolls		7.3		4.8
Prepaid income taxes		2.8		0.1
Parts supplies		4.7		3.5
Other prepaids		2.3		2.6
Income tax receivable		1.9		1.9
Prepaid software		1.7		1.1
Prepaid highway and fuel taxes		0.2		1.1
Total	$	28.6	$	22.6

NOTE 34 – INTEGRATION AND RESTRUCTURING

~~On July 30, 2019,~~During the first quarter of 2022, the Company internally announced a phased integration and restructuring plan ~~to integrate~~(Transformation Plan or the Plan), with the first phase integrating 35 operating segments ~~with~~into 3 other operating segments, ~~(Project Synchronize or the Plan),~~ which ~~reduced~~will reduce the number of overall operating segments from 1611 to ~~13. On September 4, 2019,~~6. The second phase of the ~~Company announced a comprehensive restructuring plan (Project Pivot)~~Plan will integrate those 6 operating segments into 4 or 5 operating segments. As of June 30, 2022, we had 10 operating segments. The Transformation Plan is intended to reduce ~~its~~the Company’s cost base, right size its organization and management team and increase and accelerate its previously announced operational improvement goals. In addition, the Company anticipates additional revenue opportunities driven by synergies from optimizing a consolidated operation, including empty mile reduction, pricing improvements, and additional seated truck contribution. The integration and restructuring costs consist of ~~asset impairments,~~ employee-related costs and other transition and termination costs related to restructuring activities. Employee-related costs include severance, tax preparation, and relocation costs, which are accounted for in accordance with ASC 420 Exit or Disposal Cost Obligations. Other transition and termination costs include fixed asset-related charges, contract and lease termination costs, professional fees, and other miscellaneous expenditures associated with the integration or restructuring activities, which are expensed as incurred. Costs are reported in restructuring charges in the consolidated statements of operations and comprehensive ~~income (loss).~~income. The obligation related to employee separation costs is included in other current liabilities in the consolidated balance sheets.

During the first quarter of 2020, the Company made the decision to close certain of the Aveda terminals and wind down those operations, which was completed during the fourth quarter of 2020. As a result of the planned divestiture of Aveda, impairment charges of $~~13.4~~ ~~million were recorded for the three months ended March 31, 2020 consisting of property and equipment of $4.0~~ ~~million, right-of-use assets of $3.2~~ ~~million and tradename intangible assets of $6.2~~ ~~million.~~

~~On March 10, 2020, the Company announced a plan to integrate~~ 3 ~~operating segments with~~ 3 other operating segments (Phase II of the Plan). Phase II of the Plan was initially expected to be significantly completed by June 30, 2020, however, due to uncertainties and changes in focus caused by the COVID-19 pandemic, the Company delayed and reevaluated Phase II of the Plan and reduced the planned number of integrations from 3 to 2 ~~operating segments. As of~~ ~~September 30, 2021~~, 1 ~~of these integrations had been completed, and the Company expects to complete the remaining integration in 2022.~~

The Company recorded $~~0.1~~0.6 million and $~~5.1~~1.2 million of integration and restructuring expenses in connection with ~~Phase II of~~ the Plan ~~and Project Pivot~~ in the three and six months ended ~~September~~June 30, ~~2021 and 2020, respectively. The Company recorded $~~2022, respectively~~0.2~~ ~~million and $8.6~~ ~~million of integration and restructuring expenses in connection with Phase II of the Plan and Project Pivot in the nine months ended September 30, 2021 and 2020, respectively.~~. As of ~~September~~June 30, ~~2021,~~2022, we have incurred a cumulative total of $~~9.9~~1.2 million in integration and restructuring costs since inception of the Plan.

9The Company completed the previously announced internal restructuring (Project Pivot) and integration (Project Synchronize) plans as of December 31, 2021 and does not expect any future material restructuring costs associated with those prior plans. As of December 31, 2021, the Company had incurred a cumulative total of $9.9 million in integration and restructuring costs related to Project Pivot and Project Synchronize.

Table of Contents

The following table summarizes the integration and restructuring costs as of ~~September~~June 30, ~~2021~~2022 (in millions):

Severance

Operating

and

Lease

Other Payroll

Termination

Other

Total

Balance at December 31, 2020

$
0.1

$
—

$
—

$
0.1

Specialized Solution

Costs accrued

—

—

0.2

0.2

Amounts paid or charged

—

—

(0.2
)

(0.2
)
Specialized Solution balance at September 30, 2021

—

—

—

—

Flatbed Solution

Costs accrued

—

—

—

—

Amounts paid or charged

—

—

—

—

Flatbed Solution balance at September 30, 2021

—

—

—

—

Corporate

Costs accrued

—

—

—

—

Amounts paid or charged

—

—

—

—

Adjustments

(0.1
)

—

(0.1
)
Corporate balance at September 30, 2021

(0.1
)

—

—

(0.1
)
Consolidated

Costs accrued

—

—

0.2

0.2

Amounts paid or charged

—

—

(0.2
)

(0.2
)
Adjustments

(0.1
)

—

—

(0.1
)
Consolidated balance at September 30, 2021

$
—

$
—

$
—

$
—


	Severance			Operating
	and			Lease
	Other Payroll			Termination		Other			Total
Balance at December 31, 2021	$	—		$	—	$	—		$	—
Specialized Solution
Costs accrued		0.2			—		0.3			0.5
Amounts paid or charged		(0.2	)		—		(0.3	)		(0.5	)
Specialized Solution balance at June 30, 2022		—			—		—			—
Flatbed Solution
Costs accrued		—			—		—			—
Amounts paid or charged		—			—		—			—
Flatbed Solution balance at June 30, 2022		—			—		—			—
Corporate
Costs accrued		—			—		0.7			0.7
Amounts paid or charged		—			—		(0.7	)		(0.7	)
Corporate balance at June 30, 2022		—			—		—			—
Consolidated
Costs accrued		0.2			—		1.0			1.2
Amounts paid or charged		(0.2	)		—		(1.0	)		(1.2	)
Consolidated balance at June 30, 2022	$	—		$	—	$	—		$	—

Impairments

During the three months ended June 30, 2022, the Company made a decision to no longer use the trade name of an operating segment within the Specialized Solutions segment that had been integrated into another operating segment as part of the Plan. In addition, as of June 30, 2022, there were no remaining customer relationships associated with this integrated operating segment. As such, the Company determined there were indicators of impairment regarding this operating segment’s trade name intangibles, customer relationships intangibles, and goodwill. The Company determined there was no fair value associated with this integrated operating segment’s intangibles. As such, the Company recorded an impairment charge of $7.8 million in the Specialized Solutions segment during the three months ended June 30, 2022, consisting of $1.9 million of trade name intangibles, $0.2 million of customer relationships, and $5.7 million of goodwill. The impairment charge is included in impairment in the consolidated statements of operations and comprehensive income.

NOTE 45 – PROPERTY AND EQUIPMENT

The components of property and equipment are as follows (in millions):


	September 30,			December 31,			June 30,			December 31,
	2021			2020			2022			2021
Revenue equipment	$	513.4		$	546.7		$	546.9		$	520.5
Assets leased and available for lease to owner operators		119.4			87.1
Revenue equipment leased and available for lease to owner operators								141.3			123.4
Buildings and improvements		56.9			57.0			58.7			58.0
Furniture and fixtures, office and computer equipment and vehicles		34.0			31.9
Furniture and fixtures, office and computer equipment, vehicles and capitalized software development								35.0			33.3
		723.7			722.7			781.9			735.2
Accumulated depreciation		(329.5	)		(320.0	)		(360.9	)		(337.5	)
Property and equipment, net	$	394.2		$	402.7		$	421.0		$	397.7

Depreciation expense on property and equipment was $~~20.6~~21.0 million and $20.4 million for ~~both~~ the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020.~~respectively. Depreciation expense on property and equipment was $~~61.5~~40.9 million and $~~66.0~~40.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Table of Contents

NOTE 56 – ACCRUED EXPENSES AND OTHER LIABILITIES

The components of accrued expenses and other liabilities are as follows as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 (in millions):


	September 30,		December 31,		June 30,		December 31,
	2021		2020		2022		2021
Brokerage and escorts	$	20.5	$	11.9	$	22.8	$	15.6
Unvouchered payables						11.2		8.7
Owner operator deposits		11.2		7.8		11.2		11.3
Unvouchered payables		7.6		6.1
Fuel and fuel taxes						7.0		1.2
Other accrued expenses		4.9		6.8		6.4		3.7
Fuel and fuel taxes		4.9		1.1
Accrued property taxes and sales taxes payable		1.9		1.5		1.7		2.3
Interest		1.2		0.5		0.8		1.1
	$	52.2	$	35.7	$	61.1	$	43.9

~~Table of Contents~~

NOTE 67 – LONG-TERM DEBT

Long-term debt consists of the following as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 (in millions):

September 30,

December 31,

2021

2020

Term loan facility

$
398.0

$
483.5

Equipment term loans

171.1

164.9

Finance leases

30.6

31.3

599.7

679.7

Less current portion

(55.7
)

(54.0
)
Less unamortized debt issuance costs

(7.8
)

(7.1
)
Total long-term debt

$
536.2

$
618.6


	June 30,			December 31,
	2022			2021
Term Loan Facility	$	395.0		$	397.0
ABL Facility		0			0
Equipment and real estate term loans		182.6			169.0
Finance lease liabilities		26.7			28.5
Total debt and finance lease liabilities		604.3			594.5
Less current portion		(60.4	)		(55.5	)
Less unamortized deferred financing fees		(7.0	)		(7.6	)
Long-term debt and finance lease liabilities, less current portion and unamortized deferred financing fees	$	536.9		$	531.4

Term Loan Facility

On March 9, 2021, the Company and Daseke Companies, Inc., a wholly-owned subsidiary of the Company (the Term Loan Borrower), entered into a Refinancing Amendment (Amendment No. 3 to Term Loan Agreement) (the Term Loan Amendment) with JPMorgan Chase Bank, N.A., as successor administrative agent and collateral agent and a replacement lender, Credit Suisse AG, Cayman Islands Branch, as predecessor administrative agent and collateral agent, the other loan parties party thereto and the other financial institutions party thereto. Pursuant to the Term Loan Amendment, the Company prepaid, refinanced and replaced all of ~~its issued~~the then-issued and outstanding term loans, ~~under its Term Loan Facility (as defined below)~~which had an aggregate principal amount of $484 million, with cash on hand and new replacement terms loans in an aggregate principal amount of ~~approximately~~ $~~483.5~~ ~~million utilizing proceeds from (i) replacement term loans in aggregate principal amount of $400.0~~400 million (the Replacement Term Loans) ~~and (ii) approximately $83.5~~ ~~million from its cash balance.~~

. The ~~terms of the~~ Replacement Term Loans ~~are governed by a $400.0~~ million term loan facility (the Term Loan Facility) evidenced by a Term Loan Agreement dated as of February 27, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the Term Loan Agreement), among the Company, the Term Loan Borrower, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the Term Loan Agent), and the other lenders from time to time party thereto withhave a scheduled maturity date of March 9, ~~2028. The Replacement Term Loans are, at~~2028. At June 30, 2022 and December 31, 2021, the Company’s election from time to time, comprised of alternate base rate loans (an ABR Borrowing) or adjusted LIBOR loans (a Eurodollar Rate Borrowing), with the applicable margins of interest being an alternate base rate (subject to a ~~1.75% floor) plus~~ ~~3.00% per annum and LIBOR (subject to a~~ ~~0.75% floor) plus~~ ~~4.00% per annum. During the three months ended September 30, 2021 and 2020, the weighted average~~ interest rate on the Replacement Term ~~Loan Facility~~Loans was ~~4.1~~5.6% and ~~6.0~~4.75%, respectively. ~~During the nine months ended September 30, 2021 and 2020, the weighted average interest rate on the Term Loan Facility was~~ ~~5.0% and~~ ~~6.2%, respectively.~~

~~The Term Loan Facility is secured by substantially all assets of the Company, excluding those assets collateralizing certain equipment and real estate debt and other customary exceptions.~~

The Term Loan Facility permits voluntary prepayments of borrowings. In certain circumstances (subject to exceptions, exclusions and, in the case of excess cash flow, step-downs described below), the Company may also be required to make an offer to prepay the Replacement Term Loans if it receives proceeds as a result of certain asset sales, debt issuances, casualty or similar events of loss, or if it has excess cash flow (defined as an annual amount calculated using a customary formula based on consolidated Adjusted EBITDA, including, among other things, deductions for (i) the amount of certain voluntary prepayments of the Replacement Term Loans and (ii) the amount of certain capital expenditures, acquisitions, investments and restricted payments). The percentage of excess cash flow that must be applied as a mandatory prepayment is 50%, 25~~% or~~ 0~~% for excess cash flow periods for the year ending December 31, 2018 and beyond, depending upon the first lien leverage ratio.~~

The Term Loan Facility contains (i) certain customary affirmative covenants that, among other things, require compliance with applicable laws, periodic financial reporting and notices of material events, payment of taxes and other obligations, maintenance of property and insurance, and provision of additional guarantees and collateral, and (ii) certain customary negative covenants that, among other things, restrict the incurrence of additional indebtedness, liens on property, sale and leaseback transactions, investments, mergers, consolidations, liquidations and dissolutions, asset sales, acquisitions, the payment of distributions, dividends, redemptions and repurchases of equity interests, transactions with affiliates, prepayments and redemptions of certain other indebtedness, burdensome agreements, holding company limitations, changes in fiscal year and modifications of organizational documents. As of ~~September~~June 30, ~~2021,~~2022, the Company was in compliance with all covenants contained in the agreement governing the Replacement Term ~~Loan Facility.~~Loans.

ABL Facility

The Company has a senior secured asset-based revolving line of credit (the ABL Facility) under a credit agreement (as amended, restated, supplemented or otherwise modified from time to time, the ABL Credit Agreement) with PNC Bank, National Association, as administrative agent and the lenders party ~~thereto (the ABL Agent).~~thereto.

~~Table of Contents~~

On April 29, 2021, the Company, Daseke Companies, Inc., a wholly-owned subsidiary of the Company, and the Company’s other domestic subsidiaries party thereto (together with Daseke Companies, Inc., the ABL Borrowers) entered into the Fifth Amendment to the Fifth Amended and Restated Revolving Credit and Security Agreement (the ABL Amendment) with the financial institutions party thereto as lenders and the ABL Agent, which amends certain terms of the ABL Credit Agreement.

Principally, the ABL Amendment extended the scheduled maturity date of the ABL Facility from February 27, 2025 to April 29, 2026. The ABL Amendment also, among other things, (a) increased the Maximum Revolving Advance Amount (as defined therein) from $~~100~~ ~~million to $150~~ ~~million, (b) provides that the Maximum Revolving Advance Amount may be increased further from $150~~ ~~million to $200~~ million (the ABL Amendment did not result in such an increase), (c) removed the ABL Borrowers’ total leverage financial covenant, which had been tested on a quarterly basis and (d) provided additional covenant flexibility in the form of increased debt, lien, investment, disposition and restricted payment baskets.

~~The ABL Facility also provides for the issuance of letters of credit subject to certain restrictions and a sublimit of $~~40 ~~million.~~ As of ~~September~~June 30, ~~2021,~~2022, the Company had 0 borrowings, $23.3 million in letters of credit outstanding, and could incur approximately $~~117.7~~125.3 million of additional indebtedness under the ABL Facility, based on current qualified collateral.

~~At September~~ As of June 30, ~~2021,~~2022, the interest rate on the ABL Facility was ~~3.75~~5.25%. ~~Margins on the ABL Facility are adjusted, if necessary, to the applicable rates set forth in the following table corresponding to the average RLOC Utilization for the trailing~~ ~~12 month~~ period on the last day of the most recently completed fiscal quarter. RLOC Utilization at a particular date shall mean an amount equal to (a)(i) outstanding amount of Revolving Advances plus (ii) the outstanding amount of the Swing Loans plus (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, divided by (b) Maximum Revolving Advance Amount.

RLOC Utilization

Base Rate Margins

LIBOR Rate Margins

Less than 33.3%

0.50
%

1.50
%
Greater than or equal to 33.3%, but less than 66.6%

0.75
%

1.75
%
Greater than or equal to 66.6%

1.00
%

2.00
%

The ABL Facility is secured by all of the Company’s U.S.-based accounts receivable, parts supplies, cash and cash equivalents excluding proceeds of Term Loan Facility, securities and deposit accounts and other general assets not included in the Term Loan Facility collateral.

The ABL Facility contains a financial covenant such that during any period after a default or event of default or after excess availability falling below 17.5% of the maximum credit amount, continuing until such time as no default or event of default has existed and excess availability has exceeded such amounts for a period of 60 ~~consecutive days, a financial covenant requiring the Company to maintain a minimum consolidated fixed charge coverage ratio of~~ ~~1.00~~x, tested on a quarterly basis. The Company’s fixed charge coverage ratio is defined as the ratio of (1) consolidated Adjusted EBITDA minus unfinanced capital expenditures, cash taxes and cash dividends or distributions, to (2) the sum of all funded debt payments for the four-quarter period then ending (with customary add-backs permitted to consolidated Adjusted EBITDA).

The ABL Facility contains affirmative and negative covenants similar to those in the Term Loan Facility, together with such additional terms as are customary for a senior secured asset-based revolving credit facility.

As of ~~September~~June 30, ~~2021,~~2022, the Company was in compliance with all covenants contained in the ABL ~~Facility.~~Credit Agreement.

Equipment and Real Estate Term Loans ~~and Mortgages~~

As of ~~September~~June 30, ~~2021,~~2022, the Company had term loans collateralized by equipment in the aggregate amount of $~~168.8~~180.3 million with 16 lenders (Equipment Term Loans). The Equipment Term Loans bear interest at rates ranging from 2.6% to 5.9%, require monthly payments of principal and interest and mature at various dates through July ~~2027. The~~2029. As of June 30, 2022, the weighted average interest rate ~~for the three months ended September 30, 2021 and 2020~~ was ~~3.8~~4.1% ~~and~~ .~~3.9~~

~~%, respectively. The weighted average interest rate for the nine months ended September 30, 2021 and 2020 was~~ ~~3.9% and~~ ~~4.3~~%, respectively. Certain of the Equipment Term Loans contain conditions, covenants, representations and warranties, events of default, and indemnification provisions applicable to the Company and certain of its subsidiaries that are customary for equipment financings, including, but not limited to, limitations on the incurrence of additional debt and the prepayment of existing indebtedness, certain payments (including dividends and other distributions to persons not party to its credit facility) and transfers of assets.

As of ~~September~~June 30, ~~2021,~~2022, the Company has a bank mortgage loan with a balance of $2.3 million incurred to finance the construction of the headquarters and terminal in Redmond, Oregon. ~~The mortgage loan is collateralized by such property and buildings. The mortgage is payable in monthly installments of approximately $15,000, including interest at~~ ~~3.7%, and a balloon payment of approximately $2.1~~ ~~million at maturity date. The bank mortgage loan matures November 1, 2023.~~

Table of Contents

NOTE 78 – INCOME TAXES

The effective tax rates for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were ~~29.4~~30.3% and ~~13.6~~23.3%, respectively. The effective tax rates for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were ~~27.6~~26.6% and ~~11.1~~26.1%, respectively. The difference between the Company’s effective tax rate and the federal statutory rate primarily results from the mix of earnings with state jurisdictions, combined with the ~~unfavorable~~ impact of nontaxable income, primarily related to the change in fair value of the warrant liability, and nondeductible expenses, ~~including the effect of the per diem pay structure for drivers~~primarily related to executive compensation and ~~nondeductible executive compensation.~~goodwill impairment. State tax rates vary among states and typically range from 1% to 6%, although some state rates are higher and a small number of states do not impose an income tax. The effective tax rate for the three months ended ~~September~~June 30, ~~2021~~2022 differs from the effective tax rate for the same period in ~~2020~~2021 primarily due to the ~~impact~~permanent disallowance of goodwill impairment in ~~2020~~the second quarter of ~~nontaxable income and permanent differences in relation to forecasted pretax book income.~~2022. The effective tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2021 differs from the effective tax rate for~~2022 is relatively consistent with the same period in ~~2020 primarily due to the impact of permanent differences in relation to forecasted earnings before income taxes each period.~~2021.

There were no0 changes in uncertain tax positions during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

NOTE 89 – STOCK-BASED COMPENSATION

Under the 2017 Omnibus Incentive Plan (as amended from time to time, the Incentive Plan), the Company may grant awards of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance awards. On June 18, 2021, at the Company's 2021 annual meeting of stockholders, the Company’s stockholders approved an amendment and restatement (the Restatement) of the Incentive Plan. The Restatement increased the number of shares that may be granted as awards thereunder by ~~4.0~~ ~~million and extended the scheduled expiration date of the Incentive Plan from February 27, 2027 to June 18, 2031.~~

As of ~~September~~June 30, ~~2021,~~2022, the Company has ~~2.5~~0.7 million shares of common stock available for issuance under the Incentive ~~Plan. Equity awards to non-directors under~~Plan, assuming the ~~Incentive Plan generally vest annually on a pro-rata basis over a~~ ~~three~~ to ~~five-year~~ ~~period on the anniversary~~maximum potential number of ~~each grant date. The Company also grants equity awards to our directors under the Incentive Plan. The awards granted to directors vest ratably over periods of~~ ~~one~~ to ~~five years~~ ~~annually on the anniversary of each grant date.~~shares that may be issued from outstanding awards.

Aggregate stock-based compensation charges, net of forfeitures, were $~~2.1~~2.2 million and $~~2.3~~0.8 million for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and $~~5.3~~6.4 million and $~~4.9~~3.2 million for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~These expenses are included as a component of salaries, wages and employee benefits on the accompanying consolidated statements of operations and comprehensive income (loss).~~

Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized on a straight-line basis over the employees’ requisite service period. Forfeitures are recorded as a cumulative adjustment to stock-based compensation expense in the period forfeitures occur. As of ~~September~~June 30, ~~2021,~~2022, there was $~~2.7~~1.2 million, $~~2.7~~5.1 million, and $~~7.6~~10.0 million of unrecognized stock-based compensation expense related to stock options, restricted stock units (RSUs) and performance stock units (PSUs) (both equity and liability awards), respectively. This expense will be recognized over the weighted average periods of ~~1.4~~0.8 years for stock options, ~~1.8~~1.6 years for ~~restricted stock units~~RSUs and ~~1.9~~1.3 years for PSUs.

During the six months ended June 30, 2022, there were 203,821 RSUs awarded to participants that are classified as equity. In addition, during the six months ended June 30, 2022, there were 235,393 PSUs awarded to participants that are classified as liabilities. During the six months ended June 30, 2022, there were no stock options granted.

Restricted Stock ~~Options~~Units

The following table summarizes ~~stock option grants:~~RSU grants under the Incentive Plan:


Grantee Type	# of Options Granted		Issued and Outstanding		Vesting Period	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value (Per Option)		# of RSUs Granted		Issued and Outstanding		Vesting Period	Weighted Average Grant Date Fair Value (Per Unit)
Director Group		150,000		75,000	5 years	$	9.98	$	4.36		830,978		71,771	1-2 years	$	11.21
Employee Group		4,682,630		2,541,622	3-5 years	$	5.60	$	3.08		2,393,066		656,392	3-5 years	$	9.36
Total				2,616,622									728,163

A summary of RSU awards activity under the Incentive Plan as of June 30, 2022, and the changes during the six months ended June 30, 2022 are as follows:


	Units			Weighted Average Grant Date Fair Value (Per Unit)
Non-vested as of January 1, 2022		673,830		$	8.56
Granted		203,821			12.16
Vested		(137,640	)		8.60
Forfeited		(11,848	)		9.76
Non-vested as of June 30, 2022		728,163		$	9.54

The ~~Company’s calculations of the~~weighted average grant date fair value of ~~stock options~~RSUs granted ~~as equity classification~~ during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~were made using the Black-Scholes option-pricing model.~~ was $12.16 and $6.92, respectively. The total fair value of RSUs vested during the ~~Company’s stock option grants~~six months ended June 30, 2022 and 2021 was ~~estimated utilizing the following assumptions:~~$1.2 million and $1.4 million, respectively.


~~Weighted average expected life~~		~~6.5~~ ~~years~~
~~Risk-free interest rates~~		~~1.56~~%
~~Expected volatility~~		~~38.1~~%
~~Expected dividend yield~~		~~0.00~~%

Table of Contents

~~A summary of option activity as of September 30, 2021 and changes during the~~ ~~nine months ended September 30, 2021~~ ~~are as follows:~~

Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Terms (Years)

Aggregate
Intrinsic
Value (in
millions)

Outstanding as of January 1, 2021

3,114,931

$
6.19

7.9

$
5.9

Granted

20,000

2.39

Exercised

(157,545
)

3.00

Forfeited or expired

(360,764
)

7.11

Outstanding as of September 30, 2021

2,616,622

$
6.23

7.1

$
9.4

Exercisable as of September 30, 2021

1,507,483

$
7.85

6.5

$
3.2

Vested and expected to vest as of September 30, 2021

2,616,622

$
6.23

7.1

$
9.4

~~The stock options’ maximum contract term is~~ ~~ten years~~. ~~The total weighted average fair value of options granted during the nine months ended September 30, 2021 and 2020 was~~ $~~0.0~~ ~~million~~ ~~and $1.5~~ ~~million, respectively.~~

~~Restricted Stock Units~~

RSUs are nontransferable until vested. The Plan Committee (as defined in the Incentive Plan) may, in its sole discretion, grant dividend or dividend equivalents with respect to non-vested units. Prior to vesting, the grantees of RSUs are not entitled to vote the shares. RSUs typically vest in equal annual increments over the vesting period.

~~The following table summarizes RSUs granted under the Incentive Plan:~~

Grantee Type

# of
Restricted Stock
Units Granted

Issued and Outstanding

Vesting
Period

Weighted Average Grant Date Fair Value (Per Unit)

Director Group

933,237

39,241

1-2 years

$
2.96

Employee Group

1,832,106

389,708

3-5 years

$
10.07

Total

428,949

~~A summary of RSUs activity under the Incentive Plan as of September 30, 2021 and changes during the nine months ended September 30, 2021 are as follows:~~

Units

Weighted
Average Grant
Date Fair Value
(Per Unit)

Non-vested as of January 1, 2021

594,801

$
5.72

Granted

302,692

7.04

Vested

(433,117
)

3.98

Forfeited

(35,427
)

10.14

Non-vested as of September 30, 2021

428,949

$
8.05

Performance Stock Units

As of June 30, 2022, the Company had 3,100,571 PSUs outstanding, of which 1,355,571 were classified as liabilities.

As of June 30, 2022, there were 630,571 PSUs ~~become eligible for~~classified as liabilities in which the vesting ~~in shares~~occurs upon the achievement of specific performance-based conditions related to the Company’s financial performance ~~and market-based conditions~~over a three-year period, modified based on the Company’s Relative Total Shareholder Return (TSR) and subject to final vesting based on the participant’s continued employment through the end of the requisite service periods. The ~~grant date fair value of PSUs was determined using a Monte Carlo probability model and compensation cost is recognized ratably over~~ultimate amount to vest may be downwardly adjusted by the ~~requisite service period.~~

~~As of September 30, 2021, the Company had~~ ~~1,890,178~~ ~~total PSUs outstanding. There are~~ ~~1,495,000~~ ~~PSUs in which the vesting occurs upon the achievement of specific market-based conditions based on the performance of per share price~~Compensation Committee of the Company’s ~~common stock and subject to final vesting based on~~Board of Directors if the ~~participant’s continued employment through the end of the requisite service periods.~~

~~In addition, there are 395,178 PSUs in which the vestin~~g occurs upon the achievement of specific performance-based conditions related to the Company's financial performance over a three year period, modified based on the Company's Relative Total Shareholder Return and

~~Table of Contents~~

~~subject to final vesting based on the participant’s continued employment through the end of the requisite service periods.~~ TSR is negative. The amount of awards that will ultimately vest for these ~~395,178~~ PSUs can range from 0% to 200% based on the ~~Company’s Relative Total Shareholder Return~~TSR calculated over a ~~three year~~three-year period beginning January 1 of the year each grant was made. The Company currently expects that these PSUs will vest between 95% and 128%. The fair value of these PSUs will be remeasured at ~~133%~~.

each period-end until the earlier of the date they are reclassified to equity or the vesting date. The ~~following~~ inputs and assumptions ~~were~~ used to calculate the fair value ranged from a remaining term of 1.50 to 2.50 years, risk-free interest rate of 2.11% to 2.39%, the ~~PSUs for~~expected volatility of 58.2% to 89.3%, and the ~~shares granted during the nine months ended September 30, 2021:~~expected dividend yield of

0.0


~~Weighted average expected life~~		~~2.5~~%. ~~years~~
~~Risk-free interest rate~~		~~0.38~~%
~~Expected volatility~~		~~93.80~~%
~~Expected dividend yield~~		~~0.00~~%

~~A summary~~

In addition, there are 725,000 PSUs classified as liabilities in which the vesting occurs upon the achievement of specific performance-based conditions related to the Company’s financial performance over a two-year period, subject to various subjective individual performance goals and subject to final vesting based on the participant’s continued employment through the end of the requisite service periods. The fair value of these PSUs will be remeasured at each period-end until the earlier of the date they are reclassified to equity or the vesting date. The Company currently expects that these PSUs will vest at 100%. The fair value is equal to the market value of the common stock ~~unit awards activity as of September 30, 2021 and changes during the nine months ended September 30, 2021 are as follows:~~at each period-end.

Units

Weighted
Average Grant
Date Fair
Value
(Per Unit)

Non-vested as of January 1, 2021

1,716,100

$
1.38

Granted

395,178

7.84

Forfeited

(221,100
)

6.30

Non-vested as of September 30, 2021

1,890,178

$
5.44

As of June 30, 2022, the total fair value of liability-classified awards was approximately $9.8 million, of which $3.3 million was recorded as a liability within other non-current liabilities on the consolidated balance sheet.

NOTE 910 – COMMITMENTS AND CONTINGENCIES

Letters of Credit

The Company had outstanding letters of credit as of ~~September~~June 30, 2022 and December 31, 2021 totaling approximately $25.7 million, including those disclosed in Note 6.7. These letters of credit are related to liability and ~~workers~~workers’ compensation insurance claims.

Contingencies

The Company is involved in certain claims and pending litigation arising in the normal course of business. These proceedings primarily involve claims for personal injury or property damage incurred in the transportation of freight or for personnel matters. The Company maintains liability insurance to cover liabilities arising from these matters but is responsible to pay self-insurance and deductibles on such matters up to a certain threshold before the insurance is applied.

~~NOTE 10 – COMMON STOCK REPURCHASE PROGRAM~~14

~~On March 22, 2021, the Company’s Board~~Table of ~~Directors authorized the repurchase of up to~~ Contents~~3,000,000~~ ~~shares of the Company’s common stock. Shares are effectively retired at the time of purchase. As of July 31, 2021, the Company had repurchased and retired all~~ ~~3,000,000~~ ~~shares, at an aggregate cost of $20.4~~ ~~million,~~ ~~and accordingly, no additional shares may be repurchased under this Stock Repurchase Program.~~

NOTE 11 – REPORTABLE SEGMENTS

The Company evaluates the performance of the ~~reportable~~ segments primarily based on their respective revenues and operating income. Accordingly, ~~certain~~interest expense and other non-operating items are not reported in segment results. ~~In addition, the~~The Company has disclosed a corporate segment, which is not an operating segment and includes acquisition transaction expenses, corporate salaries, interest expense and other corporate administrative expenses and intersegment eliminations. In addition, the corporate segment, from time to time when advantageous to do so, purchases and resells certain revenue equipment. During the three months ended June 30, 2022, the corporate segment purchased $2.1 million in revenue equipment, which it resold for $2.2 million. During the six months ended June 30, 2022, the corporate segment purchased $6.7 million in revenue equipment, which it resold for $7.1 million. This resulted in gains of $0.1 million and $0.4 million for the three and six months ended June 30, 2022 and was recognized within Gain on disposition of property and equipment on the consolidated statements of operations. During the three and six months ended June 30, 2021, the corporate segment did 0t purchase or resell any revenue equipment.

The corporate segment also leases certain revenue equipment to the Company’s operating segments. Such leases are generally billed at estimated market rates, and the intersegment expenses included within operating income (loss) are eliminated in the Company’s consolidated results. Intersegment lease expenses for the Specialized Solutions segment totaled $0.1 million for the three and six months ended June 30, 2022. There were 0 intersegment lease expenses for the Flatbed Solutions segment for the three and six months ended June 30, 2022. There were 0 intersegment lease expenses in any reportable segments for the three and six months ended June 30, 2021.

The Company’s operating segments also provide transportation and related services for one another. Such services are generally billed at cost, and no profit is earned. Such intersegment revenues and expenses are eliminated in the Company’s consolidated results. Intersegment transportation and related services revenues and expenses for the Flatbed Solutions segment totaled $~~1.5~~ ~~million, $3.3~~ ~~million, $1.4~~1.0 million and $~~4.9~~1.8 million for the three and ~~nine~~six months ended ~~September~~June 30, 2022, respectively. Intersegment transportation and related services revenues and expenses for the Flatbed Solutions segment totaled $0.9 million and $1.8 million for the three and six months ended June 30, 2021, ~~and 2020,~~ respectively. Intersegment transportation and related services revenues and expenses for the Specialized Solutions segment totaled $~~1.7~~2.6 million $~~6.0~~ ~~million, $2.4~~ ~~million and $9.9~~4.5 million for the three and ~~nine~~six months ended ~~September~~June 30, 2022, respectively. Intersegment transportation and related services revenues and expenses for the Specialized Solutions segment totaled $2.0 million and $4.3 million for the three and six months ended June 30, 2021, ~~and 2020,~~ respectively.

~~Table of Contents~~

The following tables reflect certain financial data of the Company’s reportable segments for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (in millions):


	Flatbed		Specialized									Flatbed			Specialized			Corporate/			Consolidated
	Solutions		Solutions			Corporate/			Consolidated			Solutions Segment			Solutions Segment			Eliminations			Total
	Segment		Segment			Eliminations			Total
Three Months Ended September 30, 2021
Three Months Ended June 30, 2022
Total revenue	$	184.0	$	244.0		$	(3.4	)	$	424.6		$	216.0		$	268.6		$	(3.3	)	$	481.3
Company freight		45.1		123.9			(2.4	)		166.6			42.9			127.5			(2.6	)		167.8
Owner operator freight		89.2		42.6			(0.7	)		131.1			90.2			48.2			(0.5	)		137.9
Brokerage		30.4		51.5			0			81.9			47.6			44.2			0.1			91.9
Logistics		1.1		8.6			0			9.7			1.1			12.9			0			14.0
Fuel surcharge		18.2		17.4			(0.3	)		35.3			34.2			35.8			(0.3	)		69.7
Operating income (loss)		21.1		29.5			(10.2	)		40.4			24.6			22.7			(14.5	)		32.8
Depreciation		7.9		12.3			0.4			20.6			8.6			11.9			0.5			21.0
Amortization of intangible assets		0.8		1.0			(0.1	)		1.7			0.8			0.9			0			1.7
Restructuring		0		0.1			0			0.1			0			0.4			0.2			0.6
Non-cash operating lease expense		1.1		0.7			0			1.8			(0.1	)		0			0			(0.1	)
Interest expense		0.9		1.2			5.2			7.3			0.8			1.3			5.4			7.5
Income (loss) before income tax		20.3		28.2			(18.9	)		29.6
Capital expenditures		4.7		25.8			11.5			42.0			17.1			20.0			13.3			50.4

Three Months Ended September 30, 2020
Three Months Ended June 30, 2021
Total revenue	$	144.5	$	235.2		$	(3.9	)	$	375.8		$	180.9		$	226.1		$	(3.0	)	$	404.0
Company freight		47.1		129.7			(2.0	)		174.8			47.7			118.3			(2.4	)		163.6
Owner operator freight		67.2		37.7			(1.6	)		103.3			88.9			40.7			(0.5	)		129.1
Brokerage		17.6		47.8			(0.2	)		65.2			25.3			41.5			(0.1	)		66.7
Logistics		0.7		9.1			0.1			9.9			1.3			9.3			0			10.7
Fuel surcharge		11.9		10.9			(0.2	)		22.6			17.7			16.3			(0.1	)		33.9
Operating income (loss)		9.3		31.1			(12.3	)		28.1			22.9			29.0			(6.6	)		45.3
Depreciation		8.4		11.8			0.2			20.4			8.1			12.1			0.2			20.4
Amortization of intangible assets		0.9		1.0			0			1.9			0.8			1.0			0			1.8
Restructuring		0.2		4.9			0			5.1			0			0.1			0			0.1
Non-cash operating lease expense		2.2		(4.7	)		0			(2.5	)		(0.1	)		(0.3	)		0			(0.4	)
Interest expense		2.3		2.9			5.9			11.1			0.9			1.3			5.4			7.6
Income (loss) before income tax		7.0		28.8			(21.1	)		14.7
Capital expenditures		7.2		11.3			0			18.5			7.7			13.5			6.4			27.6

1615

Table of Contents

Flatbed

Specialized

Solutions

Solutions

Corporate/

Consolidated

Segment

Segment

Eliminations

Total

Nine Months Ended September 30, 2021

Total revenue

$
518.3

$
653.8

$
(9.6
)

$
1,162.5

Company freight

137.5

345.1

(7.3
)

475.3

Owner operator freight

249.1

117.9

(1.7
)

365.3

Brokerage

77.8

119.6

(0.3
)

197.1

Logistics

3.6

25.0

0.3

28.9

Fuel surcharge

50.3

46.2

(0.6
)

95.9

Operating income (loss)

55.0

69.1

(30.1
)

94.0

Depreciation

24.2

36.5

0.8

61.5

Amortization of intangible assets

2.3

2.9

0

5.2

Restructuring

0

0.2

0

0.2

Non-cash operating lease expense

0.9

0.1

0

1.0

Interest expense

3.5

4.6

18.0

26.1

Income (loss) before income tax

51.8

65.0

(49.3
)

67.5

Capital expenditures

21.4

49.9

17.9

89.2

Nine Months Ended September 30, 2020

Total revenue

$
436.8

$
697.2

$
(15.5
)

$
1,118.5

Company freight

147.3

383.5

(8.1
)

522.7

Owner operator freight

193.5

118.7

(5.1
)

307.1

Brokerage

52.6

133.7

(1.5
)

184.8

Logistics

2.2

26.4

0.2

28.8

Fuel surcharge

41.2

34.9

(1.0
)

75.1

Operating income (loss)

28.6

39.1

(35.5
)

32.2

Depreciation

25.3

39.9

0.7

65.9

Amortization of intangible assets

2.5

3.0

0

5.5

Impairment

0

13.4

0

13.4

Restructuring

0.3

8.3

0

8.6

Non-cash operating lease expense

4.3

(4.1
)

0

0.2

Interest expense

7.2

8.7

18.2

34.1

Income (loss) before income tax

21.7

30.5

(54.0
)

(1.8
)
Capital expenditures

24.2

39.2

0

63.4


	Flatbed			Specialized			Corporate/			Consolidated
	Solutions Segment			Solutions Segment			Eliminations			Total
Six Months Ended June 30, 2022
Total revenue	$	411.1		$	497.1		$	(5.9	)	$	902.3
Company freight		84.4			244.0			(4.6	)		323.8
Owner operator freight		178.3			90.3			(0.9	)		267.7
Brokerage		88.8			81.3			0			170.1
Logistics		2.0			23.4			0			25.4
Fuel surcharge		57.6			58.1			(0.4	)		115.3
Operating income (loss)		40.5			40.3			(29.8	)		51.0
Depreciation		16.9			23.3			0.7			40.9
Amortization of intangible assets		1.5			1.9			0			3.4
Restructuring		0			0.5			0.7			1.2
Non-cash operating lease expense		(0.1	)		0			0			(0.1	)
Interest expense		1.6			2.5			10.5			14.6
Capital expenditures		20.4			27.9			18.2			66.5

Six Months Ended June 30, 2021
Total revenue	$	334.4		$	409.8		$	(6.3	)	$	737.9
Company freight		92.4			221.1			(4.8	)		308.7
Owner operator freight		159.9			75.3			(1.0	)		234.2
Brokerage		47.5			68.1			(0.4	)		115.2
Logistics		2.5			16.5			0.2			19.2
Fuel surcharge		32.1			28.8			(0.3	)		60.6
Operating income (loss)		33.9			39.5			(20.0	)		53.4
Depreciation		16.1			24.2			0.6			40.9
Amortization of intangible assets		1.5			2.0			0			3.5
Restructuring		0			0.1			0			0.1
Non-cash operating lease expense		(0.2	)		(0.6	)		0			(0.8	)
Interest expense		2.6			3.4			12.7			18.7
Capital expenditures		16.7			24.1			6.4			47.2

17A measure of assets is not applicable, as segment assets are not regularly reviewed by the chief operating decision maker for evaluating performance or allocating resources.

Table of Contents

NOTE 12 – EARNINGS (LOSS) PER SHARE

~~ASC Topic 260, “Earnings Per Share”, provides that unvested~~Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and ~~shall be~~are included in the computation of earnings per share pursuant to the two-class method. The Company’s outstanding non-vested ~~restricted stock units~~RSUs are participating securities unless there is a net loss attributable to common stockholders. Accordingly, earnings per common share are computed using the two-class method.

Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the Company’s earnings.

For the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, shares of the Company’s 7.625% Series A Convertible Cumulative Preferred Stock (Series A Preferred Stock) ~~and shares of the Company’s outstanding stock options and performance share units~~ were not included in the computation of diluted ~~loss~~earnings (loss) per share as their effects were anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share under the two-class method:

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions, except per share data)

2021

2020

2021

2020

Numerator:

Net income (loss)

$
20.9

$
12.7

$
48.9

$
(2.0
)
Less Series A preferred dividends

(1.2
)

(1.2
)

(3.7
)

(3.7
)
Net income (loss) attributable to common stockholders

19.7

11.5

45.2

(5.7
)
Allocation of earnings to non-vested participating restricted stock units

(0.2
)

(0.2
)

(0.4
)

0

Numerator for basic EPS - income (loss) available to common stockholders - two class method

$
19.5

$
11.3

$
44.8

$
(5.7
)

Effect of dilutive securities:

Add back Series A preferred dividends

$
1.2

$
0

$
3.7

$
0

Add back allocation earnings to participating securities

0.2

0.2

0.4

0

Reallocation of earnings to participating securities considering potentially dilutive securities

(0.2
)

(0.2
)

(0.4
)

0

Numerator for diluted EPS - income (loss) available to common shareholders - two class method

$
20.7

$
11.3

$
48.5

$
(5.7
)

Denominator:

Denominator for basic EPS - weighted-average shares

62.6

64.8

64.2

64.7

Effect of dilutive securities:

Stock options and performance share units

1.7

1.2

1.3

0

Convertible preferred stock

5.7

5.7

5.7

0

Denominator for diluted EPS - weighted-average shares

70.0

71.7

71.2

64.7

Basic earnings (loss) per share

$
0.31

$
0.17

$
0.70

$
(0.09
)
Diluted earnings (loss) per share

$
0.30

$
0.17

$
0.68

$
(0.09
)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except per share data)	2022			2021			2022			2021

Numerator:
Net income	$	17.7		$	35.3		$	30.7		$	28.0
Less Series A Preferred Stock dividends		(1.2	)		(1.3	)		(2.5	)		(2.5	)
Net income attributable to common stockholders		16.5			34.0			28.2			25.5
Allocation of earnings to non-vested participating RSUs		(0.2	)		(0.3	)		(0.3	)		(0.2	)
Numerator for basic EPS - income available to common stockholders - two class method	$	16.3		$	33.7		$	27.9		$	25.3

Effect of dilutive securities:
Add back Series A Preferred Stock dividends	$	1.2		$	1.3		$	2.5		$	0
Add back allocation earnings to participating securities		0.2			0.3			0.3			0.2
Reallocation of earnings to participating securities considering potentially dilutive securities		(0.2	)		(0.3	)		(0.3	)		(0.2	)
Numerator for diluted EPS - income available to common shareholders - two class method	$	17.5		$	35.0		$	30.4		$	25.3

Denominator:
Denominator for basic EPS - weighted-average shares		63,470,040			64,842,620			63,182,277			64,960,833

Effect of dilutive securities:
Stock options and PSUs		2,432,826			1,371,510			2,484,663			1,193,738
Series A Preferred Stock		5,652,173			5,652,173			5,652,173			0
Denominator for diluted EPS - weighted-average shares		71,555,039			71,866,303			71,319,113			66,154,571

Basic earnings per share	$	0.26		$	0.52		$	0.44		$	0.39
Diluted earnings per share	$	0.24		$	0.49		$	0.43		$	0.38

NOTE 13 – SUBSEQUENT EVENTS

18Subsequent to June 30, 2022, the Company completed one additional integration under the Transformation Plan, which reduced our operating segments from 10 to 9.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Daseke is ~~the~~a premier North American transportation solutions specialist dedicated to servicing challenging industrial end-markets through experienced people and a fleet of more than 4,500 tractors and 11,000 flatbed and specialized trailers, and has operations throughout the ~~continental~~ United States, Canada and Mexico. The Company also provides logistical planning and warehousing services to customers.

The Company believes it provides one of the most comprehensive transportation and logistics solutions offerings in the industry. The Company delivers its diverse offering of transportation and logistics solutions to ~~its approximately 6,700~~thousands of customers across the United States, Canada and Mexico through two reportable segments: Flatbed Solutions and Specialized Solutions. The Flatbed Solutions segment focuses on delivering transportation and logistics solutions that principally require the use of flatbed and retractable-sided transportation equipment, and the Specialized Solutions segment focuses on delivering transportation and logistics solutions that require the use of specialized trailering transportation equipment.

Both of the Company’s reportable segments operate highly flexible business models comprised of company-owned tractors and trailers and asset-light operations (which consist of owner operator transportation, freight brokerage and logistics). The Company’s asset-based operations have the benefit of providing ~~shippers with certainty of delivery~~committed capacity and continuity of ~~operations.~~operations to meet shippers needs. Alternatively, the Company’s asset-light operations offer flexibility and scalability to meet customers’ dynamic needs and have lower capital expenditure requirements and fixed costs.

Recent Developments

Thus far in 2022, like others in our industry, we have experienced inflationary cost headwinds in driver pay, operations and maintenance, and insurance expenses. The ~~levels~~U.S. inflation rate is the highest experienced in four decades. Inflation can have an impact on the Company’s operating costs. A prolonged period of ~~activity~~inflation could cause interest rates, fuel, wages and other costs to increase, which would adversely affect the Company’s results of operations unless freight rates correspondingly increase. We continue to see strong freight rates, which have been supported by our strategic alignment with niche end-markets in the ~~Company’s business~~industrial economy, as opposed to the commodity-oriented consumer retail markets. Strong freight rates, along with our increases in fuel surcharges, have ~~historically been positively correlated~~helped to ~~broad measures~~partially offset these inflationary cost headwinds.

In addition to inflation, like others in our industry, we have observed ongoing delays in receiving new equipment as the supply chain disruptions persisted throughout the first half of ~~economic activity~~2022. However, we are expecting to see an improvement in receiving new equipment during the second half of 2022.

During the first quarter of 2022, the Company internally announced a phased integration and restructuring plan, with the first phase integrating five operating segments into three other operating segments, which will reduce the number of overall operating segments from eleven to ~~measures of industrial production because many~~six. The second phase of the Plan will integrate those six operating segments into four or five operating segments. The Plan is intended to reduce the Company’s ~~customers are in the manufacturing~~cost base, right size its organization and ~~industrial segments.~~management team and increase and accelerate its previously announced operational improvement goals. In ~~the first nine months of 2021,~~addition, the Company ~~saw improvement in industrial demand,~~anticipates additional revenue opportunities driven by synergies from optimizing a consolidated operation, including empty mile reduction, pricing improvements, and additional seated truck contribution. The Company has completed two integrations under the Plan, which ~~had previously been pressured by the COVID-19 pandemic, and in~~has reduced our operating segments from eleven to nine. During the second and third quarters of 2021, the industrial end-market in various verticals (particularly in construction and steel and other metals) appeared to have returned to pre-pandemic levels. As a result, in the third quarter of ~~2021,~~2022, the ~~Flatbed Solutions segment experienced a significantly improved rate environment,~~Company determined there was no fair value associated with ~~rates 32.5% higher than the third quarter~~one of ~~2020. During the third quarter of 2021,~~these integrated operating segments goodwill and intangible assets, which was within the Specialized Solutions segment, ~~also benefitted from continued strong demand~~ and ~~freight rates, primarily serving construction, high security cargo and glass.~~recorded an impairment charge of $7.8 million in the Specialized Solutions segment.

As the coronavirus pandemic continues to evolve, we believe the extent of the impact to our business, operating results, cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the coronavirus pandemic, including as a result of the emergence of new variants of the coronavirus; the development, acceptance and efficacy of treatments and vaccines; the pandemic’s impact on the U.S. and global economies; and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic. Those primary drivers are beyond our knowledge and control, and there are no comparable recent events that provide guidance as to the effect the COVID-19 global pandemic may have. As a result, the ultimate impact of the pandemic is highly uncertain and subject to change. See “Item 1A. Risk Factors—Risks Relating to the COVID-19 Pandemic” in our Annual Report on Form 10-K/A, filed with the SEC on May 6, 2021, for more information regarding risks relating to the COVID-19 pandemic.

1918

Table of Contents

Results of Operations

The following table sets forth ~~certain~~revenue, operating ~~statistics for the three months ended September 30, 2021~~expenses and ~~2020~~income from operations (in dollars and as ~~well as items~~a percentage of total revenue), derived from the Company’s consolidated statements of operations, for the three months ended ~~September~~June 30, 2022 and 2021, as well as certain operating statistics for the same periods. In addition, the absolute and ~~2020.~~relative changes for each are presented. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Miles are estimated based on information received as of the filing date and may change quarter to quarter when final information is received from each operating segment. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.


	Three Months Ended June 30,
	2022							2021							Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	Amount			%				Amount			%				Absolute			Relative
REVENUE:
Company freight	$	167.8			34.9		%	$	163.6			40.5		%	$	4.2			2.6		%
Owner operator freight		137.9			28.7				129.1			32.0				8.8			6.8
Brokerage		91.9			19.1				66.7			16.5				25.2			37.8
Logistics		14.0			2.9				10.7			2.6				3.3			30.8
Fuel surcharge		69.7			14.4				33.9			8.5				35.8			105.6
Total revenue	$	481.3			100.0		%	$	404.0			100.0		%	$	77.3			19.1		%

OPERATING EXPENSES:
Salaries, wages and employee benefits	$	97.2			20.2		%	$	93.4			23.1		%	$	3.8			4.1		%
Fuel		45.3			9.4				27.0			6.7				18.3			67.8
Operations and maintenance		40.1			8.3				37.3			9.2				2.8			7.5
Communications		1.0			0.2				1.1			0.3				(0.1	)		(9.1	)
Purchased freight		197.0			40.9				155.3			38.4				41.7			26.9
Administrative		17.1			3.6				12.7			3.1				4.4			34.6
Sales and marketing		0.6			0.1				0.5			0.1				0.1			20.0
Taxes and licenses		4.1			0.9				3.8			0.9				0.3			7.9
Insurance and claims		17.6			3.7				9.9			2.5				7.7			77.8
Acquisition-related transaction expenses		1.9			0.4				—			—				1.9			100.0
Depreciation and amortization		22.7			4.7				22.2			5.5				0.5			2.3
Gain on disposition of revenue property and equipment		(4.5	)		(0.8	)			(4.6	)		(1.1	)			0.1			(2.2	)
Impairment		7.8			1.7				—			—				7.8			100.0
Restructuring charges		0.6			0.1				0.1			—				0.5			500.0
Total operating expenses	$	448.5			93.2		%	$	358.7			88.8		%	$	89.8			25.0		%

INCOME FROM OPERATIONS	$	32.8			6.8		%	$	45.3			11.2		%	$	(12.5	)		(27.6	)	%

Other expense (income):
Interest income	$	(0.7	)		(0.1	)	%	$	(0.1	)		—		%	$	(0.6	)		600.0		%
Interest expense		7.5			1.6				7.6			1.9				(0.1	)		(1.3	)
Change in fair value of warrant liability		—			—				(7.8	)		(1.9	)			7.8			(100.0	)
Other		0.6			0.1				(0.4	)		(0.1	)			1.0			(250.0	)
Total other expense (income)	$	7.4			1.5		%	$	(0.7	)		(0.2	)	%	$	8.1			(1,157.1	)	%

Income before income taxes	$	25.4			5.3		%	$	46.0			11.4		%	$	(20.6	)		(44.8	)	%
Income tax expense		7.7			1.6				10.7			2.6				(3.0	)		(28.0	)
Net income	$	17.7			3.7		%	$	35.3			8.7		%	$	(17.6	)		(49.9	)	%

OPERATING STATISTICS:
Company miles		53.6							57.7							(4.1	)		(7.1	)	%
Owner operator miles		43.8							47.9							(4.1	)		(8.6	)
Total miles (in millions)		97.4							105.6							(8.2	)		(7.8	)	%

Rate per mile	$	3.14						$	2.77						$	0.37			13.4		%
Revenue per tractor	$	65,800						$	60,400						$	5,400			8.9		%

Company owned tractors, at quarter-end		2,652							2,715							(63	)		(2.3	)	%
Owner operator tractors, at quarter-end		2,038							2,112							(74	)		(3.5	)
Number of trailers, at quarter-end		11,050							11,266							(216	)		(1.9	)	%

Company owned tractors, average for the quarter		2,610							2,723							(113	)		(4.1	)	%
Owner operator tractors, average for the quarter		2,039							2,123							(84	)		(4.0	)
Total tractors, average for the quarter		4,649							4,846							(197	)		(4.1	)	%

Table of Contents

The following table sets forth revenue, operating expenses and income from operations (in dollars and as a percentage of total revenue) of the Company’s Specialized Solutions segment for the three months ended June 30, 2022 and 2021, as well as certain operating statistics for the same periods. In addition, the absolute and relative changes for each are presented. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Miles are estimated based on information received as of the filing date and may change quarter to quarter when final information is received from each operating segment. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.

Three Months Ended September 30,

2021

2020

Increase (Decrease)

(Dollars in millions, except Rate per mile and Revenue per tractor)

$

%

$

%

$

%

REVENUE:

Company freight

$
166.6

39.2

$
174.8

46.5

$
(8.2
)

(4.7
)
Owner operator freight

131.1

30.9

103.3

27.5

27.8

26.9

Brokerage

81.9

19.3

65.2

17.3

16.7

25.6

Logistics

9.7

2.3

9.9

2.6

(0.2
)

(2.0
)
Fuel surcharge

35.3

8.3

22.6

6.1

12.7

56.2

Total revenue

424.6

100.0

375.8

100.0

48.8

13.0

OPERATING EXPENSES:

Salaries, wages and employee benefits

96.6

22.8

95.8

25.5

0.8

0.8

Fuel

26.8

6.3

20.2

5.4

6.6

32.7

Operations and maintenance

40.5

9.5

45.5

12.1

(5.0
)

(11.0
)
Communications

0.9

0.2

0.9

0.2

—

—

Purchased freight

167.5

39.4

127.9

34.0

39.6

31.0

Administrative expenses

17.0

4.0

12.6

3.4

4.4

34.9

Sales and marketing

0.5

0.1

0.3

0.1

0.2

66.7

Taxes and licenses

3.5

0.8

3.9

1.0

(0.4
)

(10.3
)
Insurance and claims

13.9

3.3

16.3

4.3

(2.4
)

(14.7
)
Depreciation and amortization

22.3

5.3

22.3

5.9

—

—

Gain on disposition of revenue property and equipment

(5.4
)

(1.2
)

(3.1
)

(0.8
)

(2.3
)

74.2

Restructuring charges

0.1

—

5.1

1.4

(5.0
)

(98.0
)
Total operating expenses

384.2

90.5

347.7

92.5

36.5

10.5

INCOME FROM OPERATIONS

40.4

9.5

28.1

7.5

12.3

43.8

Other expense (income):

Interest income

(0.1
)

—

(0.1
)

—

—

—

Interest expense

7.3

1.7

11.1

3.0

(3.8
)

(34.2
)
Change in fair value of warrant liability

3.4

0.8

3.0

0.8

0.4

13.3

Other

0.2

—

(0.6
)

(0.2
)

0.8

(133.3
)
Total other expense

10.8

2.5

13.4

3.6

(2.6
)

(19.4
)

Income before income taxes

29.6

7.0

14.7

3.9

14.9

101.4

Income tax expense

8.7

2.0

2.0

0.5

6.7

335.0

Net income

$
20.9

4.9

$
12.7

3.4

$
8.2

64.6

OPERATING STATISTICS:

Company miles

54.4

62.0

(7.6
)

(12.3
)
Owner operator miles

46.7

47.8

(1.1
)

(2.3
)
Total miles (in millions)

101.1

109.8

(8.7
)

(7.9
)

Rate per mile

$
2.94

$
2.53

$
0.41

16.2

Revenue per tractor

$
62,500

$
54,100

$
8,400

15.5

Company-operated tractors, at period-end

2,641

2,979

(338
)

(11.3
)
Owner-operated tractors, at period-end

2,077

2,100

(23
)

(1.1
)
Number of trailers, at period-end

11,266

11,607

(341
)

(2.9
)

Company-operated tractors, average for the period

2,672

3,035

(363
)

(12.0
)
Owner-operated tractors, average for the period

2,095

2,104

(9
)

(0.4
)
Total tractors, average for the period

4,767

5,139

(372
)

(7.2
)


	Three Months Ended June 30,
	2022					2021					Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	Amount		%			Amount		%			Absolute			Relative
REVENUE(1):
Company freight	$	127.5		47.5	%	$	118.3		52.3	%	$	9.2			7.8		%
Owner operator freight		48.2		17.9			40.7		18.0			7.5			18.4
Brokerage		44.2		16.5			41.5		18.4			2.7			6.5
Logistics		12.9		4.8			9.3		4.1			3.6			38.7
Fuel surcharge		35.8		13.3			16.3		7.2			19.5			119.6
Total revenue	$	268.6		100.0	%	$	226.1		100.0	%	$	42.5			18.8		%

OPERATING EXPENSES(1):
Salaries, wages and employee benefits	$	63.9		23.8	%	$	58.6		25.9	%	$	5.3			9.0		%
Fuel		33.0		12.3			18.6		8.2			14.4			77.4
Operations and maintenance		29.1		10.8			26.9		11.9			2.2			8.2
Purchased freight		79.3		29.5			66.2		29.3			13.1			19.8
Depreciation and amortization		12.8		4.8			13.0		5.7			(0.2	)		(1.5	)
Impairment		7.8		2.9			—		—			7.8			100.0
Restructuring charges		0.4		0.1			0.1		—			0.3			300.0
Other operating expenses		19.6		7.3			13.7		6.1			5.9			43.1
Total operating expenses	$	245.9		91.5	%	$	197.1		87.2	%	$	48.8			24.8		%

INCOME FROM OPERATIONS	$	22.7		8.5	%	$	29.0		12.8	%	$	(6.3	)		(21.7	)	%

OPERATING STATISTICS:
Company miles		37.9					38.3					(0.4	)		(1.0	)	%
Owner operator miles		11.0					12.7					(1.7	)		(13.4	)
Total miles (in millions)		48.9					51.0					(2.1	)		(4.1	)	%

Rate per mile	$	3.59				$	3.12				$	0.47			15.1		%
Revenue per tractor	$	75,500				$	66,700				$	8,800			13.2		%

Company owned tractors, at quarter-end		1,871					1,878					(7	)		(0.4	)	%
Owner operator tractors, at quarter-end		460					511					(51	)		(10.0	)
Number of trailers, at quarter-end		7,171					7,059					112			1.6		%

Company owned tractors, average for the quarter		1,860					1,871					(11	)		(0.6	)	%
Owner operator tractors, average for the quarter		467					512					(45	)		(8.8	)
Total tractors, average for the quarter		2,327					2,383					(56	)		(2.3	)	%

Table of Contents

The following table sets forth ~~certain~~revenue, operating ~~statistics~~expenses and income from operations (in dollars and as a percentage of total revenue) of the Company’s ~~Specialized~~Flatbed Solutions segment for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, as well as ~~revenue,~~certain operating ~~expenses and income (loss) from operations~~statistics for the ~~three months ended September 30, 2021~~same periods. In addition, the absolute and ~~2020.~~ relative changes for each are presented. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Miles are estimated based on information received as of the filing date and may change quarter to quarter when final information is received from each operating segment. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.

~~SPECIALIZED SOLUTIONS~~


	Three Months Ended June 30,
	2022					2021					Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	Amount		%			Amount		%			Absolute			Relative
REVENUE(1):
Company freight	$	42.9		19.9	%	$	47.7		26.4	%	$	(4.8	)		(10.1	)	%
Owner operator freight		90.2		41.8			88.9		49.1			1.3			1.5
Brokerage		47.6		22.0			25.3		14.0			22.3			88.1
Logistics		1.1		0.5			1.3		0.7			(0.2	)		(15.4	)
Fuel surcharge		34.2		15.8			17.7		9.8			16.5			93.2
Total revenue	$	216.0		100.0	%	$	180.9		100.0	%	$	35.1			19.4		%

OPERATING EXPENSES(1):
Salaries, wages and employee benefits	$	26.6		12.3	%	$	29.1		16.1	%	$	(2.5	)		(8.6	)	%
Fuel		12.4		5.7			8.4		4.6			4.0			47.6
Operations and maintenance		11.1		5.1			10.5		5.8			0.6			5.7
Purchased freight		121.3		56.2			92.2		51.0			29.1			31.6
Depreciation and amortization		9.4		4.4			8.9		4.9			0.5			5.6
Other operating expenses		10.6		4.9			8.9		4.9			1.7			19.1
Total operating expenses	$	191.4		88.6	%	$	158.0		87.3	%	$	33.4			21.1		%

INCOME FROM OPERATIONS	$	24.6		11.4	%	$	22.9		12.7	%	$	1.7			7.4		%

OPERATING STATISTICS:
Company miles		15.7					19.4					(3.7	)		(19.1	)	%
Owner operator miles		32.9					35.2					(2.3	)		(6.5	)
Total miles (in millions)		48.6					54.6					(6.0	)		(11.0	)	%

Rate per mile	$	2.74				$	2.50				$	0.24			9.6		%
Revenue per tractor	$	57,300				$	55,500				$	1,800			3.2		%

Company owned tractors, at quarter-end		781					837					(56	)		(6.7	)	%
Owner operator tractors, at quarter-end		1,578					1,601					(23	)		(1.4	)
Number of trailers, at quarter-end		3,879					4,207					(328	)		(7.8	)	%

Company owned tractors, average for the quarter		751					852					(101	)		(11.9	)	%
Owner operator tractors, average for the quarter		1,572					1,611					(39	)		(2.4	)
Total tractors, average for the quarter		2,323					2,463					(140	)		(5.7	)	%

Three Months Ended September 30,

2021

2020

Increase (Decrease)

(Dollars in millions, except Rate per mile and Revenue per tractor)

$

%

$

%

$

%

REVENUE(1):

Company freight

$
123.9

50.8

$
129.7

55.1

$
(5.8
)

(4.5
)
Owner operator freight

42.6

17.5

37.7

16.0

4.9

13.0

Brokerage

51.5

21.1

47.8

20.3

3.7

7.7

Logistics

8.6

3.5

9.1

3.9

(0.5
)

(5.5
)
Fuel surcharge

17.4

7.1

10.9

4.7

6.5

59.6

Total revenue

244.0

100.0

235.2

100.0

8.8

3.7

OPERATING EXPENSES(1):

Salaries, wages and employee benefits

61.3

25.1

60.3

25.6

1.0

1.6

Fuel

18.4

7.5

13.0

5.5

5.4

41.3

Operations and maintenance

29.3

12.0

34.4

14.6

(5.1
)

(14.9
)
Purchased freight

75.1

30.8

64.6

27.5

10.5

16.3

Depreciation and amortization

13.3

5.4

12.8

5.4

0.5

3.6

Restructuring

0.1

—

4.9

2.1

(4.8
)

(98.1
)
Other operating expenses

16.9

7.1

14.1

6.0

2.8

20.2

Total operating expenses

214.4

87.9

204.1

86.8

10.3

5.0

INCOME FROM OPERATIONS

$
29.6

12.1

$
31.1

13.2

$
(1.5
)

(4.8
)

OPERATING STATISTICS:

Company miles

36.6

38.9

(2.3
)

(5.9
)
Owner operator miles

12.2

12.1

0.1

0.8

Total miles (in millions)

48.8

51.0

(2.2
)

(4.3
)

Rate per mile

$
3.41

$
3.28

$
0.13

4.0

Revenue per tractor

$
70,300

$
67,500

$
2,800

4.1

Company-operated tractors, at period-end

1,835

1,960

(125
)

(6.4
)
Owner-operated tractors, at period-end

497

510

(13
)

(2.5
)
Number of trailers, at period-end

7,059

7,278

(219
)

(3.0
)

Company-operated tractors, average for the period

1,865

1,958

(93
)

(4.7
)
Owner-operated tractors, average for the period

504

523

(19
)

(3.6
)
Total tractors, average for the period

2,369

2,481

(112
)

(4.5
)

~~(1)~~

~~Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.~~

Table of Contents

The following table sets forth certain operating statistics of the Company’s Flatbed Solutions segment for the three months ended September 30, 2021 and 2020, as well as revenue, operating expenses and income (loss) from operations for three months ended September 30, 2021 and 2020. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.

~~FLATBED SOLUTIONS~~

Three Months Ended September 30,

2021

2020

Increase (Decrease)

(Dollars in millions, except Rate per mile and Revenue per tractor)

$

%

$

%

$

%

REVENUE(1):

Company freight

$
45.1

24.5

$
47.1

32.6

$
(2.0
)

(4.2
)
Owner operator freight

89.2

48.5

67.2

46.5

22.0

32.7

Brokerage

30.4

16.5

17.6

12.2

12.8

72.7

Logistics

1.1

0.6

0.7

0.5

0.4

57.1

Fuel surcharge

18.2

9.9

11.9

8.2

6.3

52.9

Total revenue

184.0

100.0

144.5

100.0

39.5

27.3

OPERATING EXPENSES(1):

Salaries, wages and employee benefits

28.6

15.6

29.9

20.7

(1.3
)

(4.2
)
Fuel

8.4

4.6

7.2

5.0

1.2

16.6

Operations and maintenance

11.2

6.1

11.0

7.6

0.2

2.0

Purchased freight

95.7

52.0

67.3

46.6

28.4

42.2

Depreciation and amortization

8.8

4.8

9.3

6.4

(0.5
)

(5.5
)
Restructuring

—

—

0.2

0.1

(0.2
)

(100.0
)
Other operating expenses

10.1

5.4

10.3

7.1

(0.2
)

(1.8
)
Total operating expenses

162.9

88.5

135.2

93.6

27.7

20.5

INCOME FROM OPERATIONS

$
21.1

11.5

$
9.3

6.4

$
11.8

127.4

OPERATING STATISTICS:

Company miles

17.8

23.1

(5.3
)

(22.9
)
Owner operator miles

34.5

35.7

(1.2
)

(3.4
)
Total miles (in millions)

52.3

58.8

(6.5
)

(11.1
)

Rate per mile

$
2.57

$
1.94

$
0.63

32.5

Revenue per tractor

$
56,000

$
43,000

$
13,000

30.2

Company-operated tractors, at period-end

806

1,019

(213
)

(20.9
)
Owner-operated tractors, at period-end

1,580

1,590

(10
)

(0.6
)
Number of trailers, at period-end

4,207

4,329

(122
)

(2.8
)

Company-operated tractors, average for the period

807

1,077

(270
)

(25.1
)
Owner-operated tractors, average for the period

1,591

1,581

10

0.6

Total tractors, average for the period

2,398

2,658

(260
)

(9.8
)

~~(1)~~

~~Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.~~

Revenue. Total revenue increased ~~13.0% to $424.6 million~~19.1% for the three months ended ~~September~~June 30, ~~2021 from $375.8 million for~~2022 as compared to the same period in ~~2020.~~2021. The increase in total revenue was ~~due~~ primarily attributed to record freight rates in the Flatbed segment. Company freight revenue decreased $8.2 million, or 4.7%, to $166.6 million for the three months ended September 30, 2021 from $174.8 million for the same period in 2020. The decrease in company freight revenue was a result of a 12.3% decrease in company miles primarily due to the downsizing of company trucks partially offset by an 8.6% increase in rate per mile. Owner operator freight revenue increased $27.8 million, or 26.9%, due to a 29.9% increase in rate per mile, partially offset by a 2.3% decrease in owner operator miles driven. The increase in total freight revenue was primarily due to a 16.2% increase in rate per mile. Brokerage revenue increased $16.7 million, or 25.6%, to $81.9 million for the three months ended September 30, 2021 from $65.2 million for the same period in 2020 primarily due to increases in customer sales volumes and rate. Fuel surcharge revenue increased $12.7 million, or 56.2%, to $35.3 million for the three months ended September 30, 2021 from $22.6 million for the same period in 2020fuel surcharges due to increased fuel costs ~~that led to higher fuel surcharges.~~and growth in our brokerage service offering, as well as the sustained strong rate environment, with rate per mile increasing 13.4%. The increase in total revenue was partially offset by a 7.8% decrease in total miles driven.

~~Table of Contents~~

The Company’s Specialized Solutions segment’s revenue increased ~~3.7% to $244.0 million~~18.8% for the three months ended ~~September~~June 30, 2021 from $235.2 million for the same period in 2020. The increase was primarily due to increases in fuel surcharge, owner operator freight, and brokerage revenue. Company freight revenue decreased $5.8 million, or 4.5%, to $123.9 million for the three months ended September 30, 2021 from $129.7 million for the same period in 2020. The decrease in company freight revenue was a result of a 5.9% decrease in company miles due to the downsizing of company trucks2022 as compared to the same period in ~~2020, partially offset by a 1.5% increase~~2021, primarily due to higher fuel surcharge and the strong freight rate environment, primarily in ~~rate per mile. The increase in owner operator~~the high security cargo, construction and manufacturing end-markets. Company freight ~~revenue was primarily a result of a 12.1% increase in rate per mile and a 0.8% increase in miles driven~~increased 7.8% for the three months ended June 30, 2022 as compared to the same period in ~~2020. Brokerage~~2021 due to an 8.9% increase in company rate per mile, partially offset by a 1.0% decrease in miles driven due to supply chain delays in receiving revenue equipment. Owner operator freight increased ~~$3.7 million, or 7.7%,~~18.4% due to ~~$51.5 million~~a 36.7% increase in owner operator rate per mile, partially offset by a 13.4% decrease in miles driven primarily due to an 8.8% decrease in average owner operator tractors. The Company deployed company-owned assets into end-markets with higher rates and margins, and as such, some of the excess volumes, for which the Company was unable to utilize company-owned assets, were captured through our brokerage service offering. This resulted in a 6.5% increase in brokerage revenue for the three months ended ~~September~~June 30, ~~2021 from $47.8 million for~~2022 as compared to the same period in ~~2020 primarily~~2021. In this segment, total brokerage loads were up 2% and the brokerage revenue per load was up 4% due to ~~increases~~higher rates during the three months ended June 30, 2022 as compared to the same period in ~~customer sales volumes and rate.~~2021. Fuel surcharge revenue increased ~~$6.5 million, or 59.6%, to $17.4 million~~119.6% for the three months ended ~~September~~June 30, ~~2021 from $10.9 million for~~2022 as compared to the same period in ~~2020~~2021 due to increased fuel ~~costs that led to higher fuel surcharges.~~costs.

The Company’s Flatbed Solutions segment’s revenue increased ~~$39.5 million, or 27.3%, to $184.0 million~~19.4% for the three months ended ~~September~~June 30, ~~2021 from $144.5 million for~~2022 as compared to the same period in ~~2020, which was~~2021, primarily due to ~~increases~~higher fuel surcharge and the strong rate environment driven by strength in the construction, steel and manufacturing industries. Owner operator freight increased 1.5% due to an 8.6% increase in owner operator freight and brokerage revenue. Company freight revenue decreased $2.0 million, or 4.2%, to $45.1 million for the three months ended September 30, 2021 from $47.1 million for the same period in 2020. The decrease in company freight revenue was a result of a 22.9% decrease in company miles due to the downsizing of company trucks, partially offset by 24.3% increase in rate per mile. Owner operator freight revenue increased $22.0 million, or 32.7%, to $89.2 million for the three months ended September 30, 2021 from $67.2 million for the same period in 2020. The increase in the owner operator freight revenue was the result of a 32.5% increase in rate per mile, partially offset by a ~~11.1%~~6.5% decrease in ~~total~~ miles ~~driven~~driven. The Company deployed company-owned assets into end-markets with higher rates and margins, and as such, some of the excess volumes, for which the Company strategically captured through our brokerage service offering. This resulted in an 88.1% increase in brokerage revenue for the three months ended June 30, 2022 as compared to the same period in ~~2020. Brokerage~~2021. In this segment, total brokerage loads were up 40% and the brokerage revenue ~~increased $12.8 million, or 72.7%,~~per load was up 34% due to ~~$30.4 million for~~higher rates during the three months ended ~~September~~June 30, ~~2021 from $17.6 million for~~2022 as compared to the same period in ~~2020 due to increases in customer sales volumes and rate.~~2021. Fuel surcharge revenue increased ~~$6.3 million, or 52.9%, to $18.2 million for the three months ended September 30, 2021 from $11.9 million for the same period in 2020~~93.2% due to increased fuel ~~costs that~~costs. Company freight revenue decreased 10.1% due to supply chain delays in receiving revenue equipment which led to ~~higher fuel surcharges.~~a 19.1% decrease in miles, partially offset by a 9.6% increase in rate per mile.

Salaries, Wages and Employee Benefits. Salaries, wages and employee benefits expense, which consists of compensation for all employees, is primarily affected by the number of miles driven by company drivers, the rate per mile paid to company drivers, employee benefits including, but not limited to, health care and workers’ compensation, and to a lesser extent, the number of, and compensation and benefits paid to, non-driver employees. In general, the Specialized Solutions segment drivers receive a higher driver pay per total mile than Flatbed Solutions segment drivers due to the former requiring a higher level of training and expertise.

Salaries, wages and employee benefits expense ~~were generally consistent with prior period at $96.6 million~~increased 4.1% for the three months ended ~~September~~June 30, ~~2021~~2022 as compared to ~~$95.8 million for~~ the same period in ~~2020.~~

2021. The ~~Company’s Specialized Solutions segment for the three months ended September 30, 2021 was generally consistent with the same period in 2020.~~

~~The Company’s Flatbed Solutions segment had a $1.3 million, or 4.2%, decrease~~increase in salaries, wages and employee benefits expense was primarily due to increased stock compensation, health insurance, higher driver pay and increased employee headcount related to the expansion of corporate functions in legal, accounting and risk management, partially offset by a decrease in accrued bonuses. Salaries, wages and employee benefits expense, as a percentage of consolidated revenue (excluding brokerage revenue), decreased 2.7% for the three months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020,~~2021.

The Company’s Specialized Solutions segment’s salaries, wages and employee benefits expense increased 9.0% for the three months ended June 30, 2022 compared to the same period in 2021, primarily as a result of increased health insurance claims and higher driver and non-driver pay. The increased driver pay was due to a 10% increase in driver rate, slightly offset by a 1.0% decrease in Company miles. Salaries, wages and employee benefits expense, as a percentage of Specialized Solutions revenue (excluding brokerage revenue), decreased 3.2% for the three months ended June 30, 2022 as compared to the same period in 2021.

The Company’s Flatbed Solutions segment’s salaries, wages and employee benefits expense decreased 8.6% for the three months ended June 30, 2022 compared to the same period in 2021, primarily as a result of the decreased employee headcount ~~related to Project Synchronize~~ and lower driver pay due to ~~the~~a 19.1% decrease in ~~company~~Company miles, ~~compared to the same period~~partially offset by an 11% increase in ~~2020.~~driver rate. Salaries, wages and employee benefits expense, as a percentage of Flatbed Solutions revenue (excluding brokerage revenue), decreased ~~4.9%~~2.9% for the three months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020.~~2021.

Fuel. Fuel expense consists primarily of diesel fuel expense for company-owned tractors and fuel taxes. The primary factors affecting fuel expense are the cost of diesel fuel, the miles per gallon realized with company equipment and the number of miles driven by company drivers.

Table of Contents

Total fuel expense increased ~~$6.6 million, or 32.7%, to $26.8 million~~67.8% for the three months ended ~~September~~June 30, ~~2021 from $20.2 million for~~2022 as compared to the same period in ~~2020.~~2021. This increase was primarily due to a ~~38.4%~~70.9% increase in fuel price, partially offset by a ~~12.3%~~7.1% decrease in ~~company~~Company miles driven. The Company’s Specialized Solutions segment’s fuel expense increased 77.4% for the three months ended June 30, 2022 as compared to the same period in 2021, primarily as a result of the increase in fuel price, partially offset by a 1.0% decrease in Company miles driven for the three months ended June 30, 2022 as compared to the same period in 2021. The Company’s Flatbed Solutions segment’s fuel expense increased 47.6% for the three months ended June 30, 2022 as compared to the same period in 2021, as a result of the increase in fuel price, partially offset by a 19.1% decrease in Company miles driven for the three months ended June 30, 2022 as compared to the same period in 2021. The U.S. national average diesel fuel price, as published by the U.S. Department of Energy, was ~~$3.357~~$5.488 for the three months ended ~~September~~June 30, ~~2021,~~2022, compared to ~~$2.426~~$3.212 for the same period in ~~2020.~~2021.

The Company’s Specialized Solutions segment’s fuel expense increased 41.3% to $18.4 million for the three months ended September 30, 2021 from $13.0 million for the same period in 2020, primarily as a result of the increase in fuel price mentioned above and partially offset by a 5.9% decrease in company miles driven for the three months ended September 30, 2021 as compared to the same period in 2020.

The Company’s Flatbed Solutions segment’s fuel expense increased 16.6% to $8.4 million for the three months ended September 30, 2021 from $7.2 million for the same period in 2020, primarily as a result of the increase in fuel price mentioned above and partially offset by a 22.9% decrease in company miles driven for the three months ended September 30, 2021 as compared to the same period in 2020.

~~Table of Contents~~

Operations and Maintenance. Operations and maintenance expense consists primarily of ordinary vehicle repairs and maintenance, costs associated with preparing tractors and trailers for sale or trade-in, driver recruiting, training and safety costs, permitting and pilot car fees and other general operations expenses. Operations and maintenance expense is primarily affected by the age of company-owned tractors and trailers, the number of miles driven in a period and driver turnover.

Operations and maintenance expense ~~decreased 11.0% to $40.5 million~~increased 7.5% for the three months ended ~~September~~June 30, ~~2021 from $45.5 million for~~2022 as compared to the same period in ~~2020~~2021 primarily due to a ~~decrease~~$2.6 million increase in repairs, tires, and preventive maintenance and upkeep of ~~$1.2~~tractors and trailers. The Company’s Specialized Solutions segment’s operations and maintenance expense increased 8.2% for the three months ended June 30, 2022 as compared to the same period in 2021 primarily as a result of a $1.9 million increase in ~~maintenance costs such as~~ repairs and tires ~~$3.3 million~~for tractors and trailers. The Company’s Flatbed Solutions segment’s operations and maintenance expense was generally consistent for the three months ended June 30, 2022 as compared to the same period in ~~operation costs such as pilot car and permit fees, and $0.5 million in other operations expenses.~~2021. Operations and maintenance expense, as a percentage of consolidated revenue (excluding brokerage revenue), ~~decreased 2.8% to 11.8%~~was generally consistent for the three months ended ~~September~~June 30, ~~2021 as compared to 14.6% in the same period in 2020.~~

~~The Company’s Specialized Solutions segment’s operations and maintenance expense decreased $5.1 million, or 14.9%, for the three months ended September 30, 2021~~2022 as compared to the same period in 2020 as a result of a decrease of $1.1 million in maintenance expense such as repairs and tires due to a reduction of tractors and trailers in the Company’s fleet, a decrease of $3.4 million in operation costs such as pilot car and permit fees and a decrease of $0.6 million in other operations expenses. Operations and maintenance expense, as a percentage of Specialized Solutions revenue (excluding brokerage revenue), decreased 3.2% to 15.2% for the three months ended September 30, 2021 as compared to 18.4% in the same period in 2020.2021.

The Company’s Flatbed Solutions segment’s operations and maintenance expense was generally consistent with prior period for the three months ended September 30, 2021 as compared to the same period in 2020.

Purchased Freight. Purchased freight expense consists of the payments to owner operators, including fuel surcharge reimbursements, and payments to third-party capacity providers that haul loads brokered to them. Purchased freight expense generally takes into account changes in diesel fuel prices, resulting in ~~lower~~higher payments during periods of ~~declining~~increasing fuel prices.

Total purchased freight expense increased ~~$39.6 million, or 31.0%, to $167.5 million~~26.9% during the three months ended ~~September~~June 30, ~~2021 from $127.9 million during~~2022 as compared to the same period in ~~2020.~~2021. Purchased freight expense from owner operators was generally consistent during the three months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense from third-party capacity providers increased $41.8 million, or 86.0%, during the three months ended June 30, 2022 as compared to the same period in 2021, as a result of an increase in utilization of third-party capacity providers due to supply chain delays in receiving revenue equipment. In addition, the cost of diesel fuel increased by 70.9% during the three months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense, as a percentage of consolidated revenue, for the three months ended June 30, 2022, increased 2.5% as compared to the same period in 2021.

The Company’s Specialized Solutions segment’s purchased freight expense increased 19.8% during the three months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense from owner operators increased ~~29.9% to $106.9~~$3.6 million, or 11.4%, during the three months ended ~~September~~June 30, ~~2021 from $82.3 million during~~2022 as compared to the same period in ~~2020~~2021, as a result of a ~~29.9%~~36.7% increase in owner operators’ rate, partially offset by a ~~2.3%~~13.4% decrease in owner operator miles driven. Purchased freight expense from third-party capacity providers increased ~~32.4% to $60.5~~$9.5 million, or 27.5%, during the three months ended ~~September~~June 30, ~~2021 from $45.7 million during~~2022 as compared to the same period in ~~2020, as a result of increased utilization of third-party capacity providers.~~

~~The Company’s Specialized Solutions segment’s purchased freight expense increased 16.3% to $75.1 million during the three months ended September 30,~~ 2021, from $64.6 million during the same period in 2020. Purchased freight expense from owner operators increased 20.1% to $31.7 million during the three months ended September 30, 2021 from $26.4 million during the same period in 2020 as a result of a 12.1% increase in rate and a 0.8% increase in owner operator miles driven. Purchased freight expense from third-party capacity providers increased 13.6% to $43.4 million during the three months ended September 30, 2021 from $38.2 million during the same period in 2020 as a result of an increase in utilization of third-party capacity ~~providers.~~providers due to supply chain delays in receiving revenue equipment. As mentioned above, there was also an increase in the cost of diesel fuel during the three months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense, as a percentage of Specialized Solutions revenue, for the three months ended June 30, 2022, increased 0.2% as compared to the same period in 2021.

The Company’s Flatbed Solutions segment’s purchased freight expense increased ~~42.2% to $95.7 million~~31.6% for the three months ended ~~September~~June 30, ~~2021 from $67.3 million for~~2022 as compared to the same period in ~~2020.~~2021. Purchased freight expense from owner operators ~~increased 34.8% to $75.2~~decreased $3.6 million, or 4.8%, for the three months ended ~~September~~June 30, ~~2021 from $55.8 million for~~2022 as compared to the same period in ~~2020~~2021, as a result of a ~~37.4%~~6.5% decrease in owner operator miles driven, partially offset by an 8.6% increase in ~~rate paid to~~ owner ~~operators.~~operators’ rate. Purchased freight expense from third-party capacity providers increased ~~78.3% to $20.5~~$32.7 million, or 191.2%, during the three months ended ~~September~~June 30, ~~2021 from $11.5 million during~~2022 as compared to the same period in ~~2020,~~2021, primarily as a result of increased utilization of third-party capacity ~~providers.~~providers due to supply chain delays in receiving revenue equipment. As mentioned above, there was also an increase in the cost of diesel fuel during the three months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense, as a percentage of Flatbed Solutions revenue, for the three months ended June 30, 2022, increased 5.2% as compared to the same period in 2021.

Depreciation and Amortization. Depreciation and amortization expense consists primarily of depreciation for company-owned tractors and trailers and amortization of those financed with finance leases. The primary factors affecting these expense items include the size of the fleet and age of company-owned tractors and trailers and the cost of new equipment. Amortization of intangible assets is also included in this expense.

Table of Contents

Depreciation and amortization expense was ~~flat at $22.3 million during~~generally consistent for the three months ended ~~September~~June 30, ~~2021 and 2020.~~

2022 as compared to the same period in 2021. The Company’s Specialized Solutions segment’s depreciation and amortization expense ~~increased $0.5 million, or 3.6%,~~decreased 1.5% for the three months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020~~2021 as a result of a 0.6% decrease in average tractor count in the segment’s fleet. The Company’s Flatbed Solutions segment’s depreciation and amortization expense increased 5.6% for the three months ended June 30, 2022 as compared to the same period in 2021 as a result of recent revenue equipment additions partially offset by disposals of fully depreciated revenue equipment.

~~The Company’s Flatbed Solutions segment’s depreciation and amortization~~Impairment. Impairment expense ~~decreased $0.5 million, or 5.5%, for the three months ended September 30, 2021 as compared to the same period in 2020 as a result of a 25.1% decrease in average tractor count in the segment’s fleet.~~

~~Table of Contents~~

~~Administrative Expenses.~~ Administrative expenses consist of operating lease costs for real estate, professional fees and other expenses that are not directly associated with the Company’s fleet services. Administrative expense increased $4.4was $7.8 million for the three months ended ~~September~~June 30, ~~2021 as compared~~2022 related to ~~the same period in 2020 primarily due to gains on lease terminations that occurred during the 2020 period that did not reoccur in the 2021 period. Administrative expenses, as a percentage~~goodwill, trade name intangibles, and customer relationships intangibles of ~~revenue, increased 0.6% from the same period in 2020.~~

~~Taxes and Licenses.~~ ~~Operating taxes and licenses expense primarily represents the costs of taxes and licenses associated with~~an integrated operating segment within the Company’s ~~fleet of equipment and will vary according to the size of its equipment fleet. Taxes and license~~Specialized Solutions segment. There was no impairment expense ~~decreased $0.4 million~~ for the three months ended ~~September~~June 30, 2021. ~~Operating taxes~~The Company’s Specialized Solutions segment’s impairment expense was $7.8 million consisting of $5.7 million related to goodwill, $1.9 million related to trade name intangibles, and ~~license expense, as a percentage of revenue, was generally consistent~~$0.2 million related to customer relationships intangibles for the three months ended ~~September~~June 30, ~~2021~~2022. The Company’s Specialized Solutions segment had no impairment expense for three months ended June 30, 2021. The Company’s Flatbed Solutions segment had no impairment expense for the three months ended June 30, 2022 and ~~2020.~~2021.

Insurance and Claims. Insurance and claims expense consists of insurance premiums and the accruals the Company makes for estimated payments and expenses for claims for bodily injury, property damage, cargo damage and other casualty events. The primary factor affecting the Company’s insurance and claims expense is seasonality (the Company typically experiences higher accident frequency in winter months), the frequency and severity of accidents, trends in the development factors used in its accruals and developments in large, prior-year claims. The frequency of accidents tends to correlate with the miles the Company ~~travels.~~travels; however, insurance and claims expense could increase in periods where there are claims in excess of the Company’s self-insured retention. Insurance and claims expense ~~decreased 14.7% to $13.9 million~~increased 77.8% during the three months ended ~~September~~June 30, 2021 from $16.3 million during the same period in 2020 due to decreases in miles and decreases insurance claims and premiums. Insurance and claims, as a percentage of revenue, decreased 1.0% for the three months ended September 30, 20212022 as compared to the same period in ~~2020.~~

~~Restructuring Costs.~~ ~~Restructuring costs~~2021 primarily due to a $5.8 million increase in our estimate of ~~$0.1~~incurred but not reported claims, combined with a $1.9 million ~~and $5.1~~increase in insurance claims, primarily resulting from claims over the Company’s self-insured retention. In addition, there was a $0.3 million ~~were recognized~~increase in ~~the three months ended September 30, 2021 and 2020, respectively. The restructuring costs in the three months ended September 30, 2020 were primarily related to~~ ~~Phase II of Project Synchronize and the closure of~~ certain ~~Aveda terminals.~~insurance premiums.

Other (Income) Expense. Interest expense consists of cash interest, amortization and write-off of ~~debt~~related issuance costs and ~~fees and prepayment penalties.~~fees. Interest expense ~~decreased 34.2% to $7.3 million~~was generally consistent for the three months ended ~~September~~June 30, ~~2021 from $11.1 million for~~2022 as compared to the same period in ~~2020.~~ 2021. The ~~decrease was primarily attributable to lower interest rates on the Term Loan Facility~~Company’s common stock purchase warrants expired during three months ended March 31, 2022 and ~~decreases in the balance outstanding on equipment term loans.~~ are no longer exercisable. Change in fair value of warrant liability was a ~~loss~~gain of ~~$3.4 million for the three months ended September 30, 2021 compared to a loss of $3.0~~$7.8 million for the same period in ~~2020.~~2021. The change in fair value is directly related to the fair value of the warrant liability as of each period end as calculated using Level 1 and Level 3 inputs. ~~Other expense for the three months ended September 30, 2021 was $0.2 million compared to other income of $0.6 million for the same period in 2020.~~

Income Tax. Income tax expense was ~~$8.7~~$7.7 million for the three months ended ~~September~~June 30, ~~2021~~2022 compared to income tax expense of ~~$2.0~~$10.7 million for the same period in ~~2020.~~2021. The effective tax rate was ~~29.4%~~30.3% for the three months ended ~~September~~June 30, ~~2021,~~2022, compared to ~~13.6%~~23.3% for the same period in ~~2020.~~2021. The difference between the Company’s effective ~~income~~ tax rate ~~varies from~~and the federal statutory rate primarily ~~due to~~results from the ~~mix of earnings with state jurisdictions, combined with the unfavorable~~ impact of ~~nondeductible expenses, including~~ the ~~effect~~permanent disallowance of goodwill impairment in the ~~per diem pay structure for drivers and nondeductible executive compensation.~~second quarter of 2022.

2524

Table of Contents

The following table sets forth ~~certain~~revenue, operating ~~statistics for the nine months ended September 30, 2021~~expenses and ~~2020~~income from operations (in dollars and as ~~well as items~~a percentage of total revenue), derived from the Company’s consolidated statements of operations, for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, as well as certain operating statistics for the same periods. In addition, the absolute and ~~2020.~~relative changes for each are presented. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Miles are estimated based on information received as of the filing date and may change quarter to quarter when final information is received from each operating segment. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.


	Nine Months Ended September 30,																		Six Months Ended June 30,
	2021						2020						Increase (Decrease)						2022							2021							Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	$			%			$			%			$			%			Amount			%				Amount			%				Absolute			Relative
REVENUE:
Company freight	$	475.3			40.9		$	522.7			46.7		$	(47.4	)		(9.1	)	$	323.8			35.9		%	$	308.7			41.8		%	$	15.1			4.9		%
Owner operator freight		365.3			31.4			307.1			27.5			58.2			19.0			267.7			29.7				234.2			31.7				33.5			14.3
Brokerage		197.1			17.0			184.8			16.5			12.3			6.7			170.1			18.9				115.2			15.6				54.9			47.7
Logistics		28.9			2.5			28.8			2.6			0.1			0.3			25.4			2.8				19.2			2.6				6.2			32.3
Fuel surcharge		95.9			8.2			75.1			6.7			20.8			27.7			115.3			12.7				60.6			8.3				54.7			90.3
Total revenue		1,162.5			100.0			1,118.5			100.0			44.0			3.9		$	902.3			100.0		%	$	737.9			100.0		%	$	164.4			22.3		%

OPERATING EXPENSES:
Salaries, wages and employee benefits		280.7			24.1			305.6			27.3			(24.9	)		(8.1	)	$	194.7			21.6		%	$	184.1			24.9		%	$	10.6			5.8		%
Fuel		79.1			6.8			67.1			6.0			12.0			17.9			80.4			8.9				52.4			7.1				28.0			53.4
Operations and maintenance		108.1			9.3			136.4			12.2			(28.3	)		(20.7	)		74.5			8.3				67.6			9.2				6.9			10.2
Communications		3.1			0.3			2.8			0.3			0.3			10.7			1.9			0.2				2.2			0.3				(0.3	)		(13.6	)
Purchased freight		444.2			38.2			374.3			33.5			69.9			18.7			368.6			40.9				276.7			37.5				91.9			33.2
Administrative expenses		46.2			4.0			50.0			4.5			(3.8	)		(7.6	)
Administrative																				34.0			3.8				29.2			4.0				4.8			16.4
Sales and marketing		1.5			0.1			1.3			0.1			0.2			15.4			1.0			0.1				1.1			0.1				(0.1	)		(9.1	)
Taxes and licenses		11.2			1.0			12.4			1.1			(1.2	)		(9.7	)		7.7			0.9				7.7			1.0				—			—
Insurance and claims		40.6			3.5			46.9			4.2			(6.3	)		(13.4	)		41.0			4.5				26.7			3.6				14.3			53.6
Acquisition-related transaction expenses																				3.3			0.4				—			—				3.3			100.0
Depreciation and amortization		66.7			5.7			71.4			6.4			(4.7	)		(6.6	)		44.3			4.9				44.4			6.0				(0.1	)		(0.2	)
Gain on disposition of revenue property and equipment		(13.1	)		(1.1	)		(3.9	)		(0.3	)		(9.2	)		235.9			(9.1	)		(1.0	)			(7.7	)		(1.0	)			(1.4	)		18.2
Impairment		—			—			13.4			1.2			(13.4	)		(100.0	)		7.8			0.9				—			—				7.8			100.0
Restructuring charges		0.2			—			8.6			0.8			(8.4	)		(97.7	)		1.2			0.1				0.1			—				1.1			1,100.0
Total operating expenses		1,068.5			91.9			1,086.3			97.1			(17.8	)		(1.6	)	$	851.3			94.3		%	$	684.5			92.8		%	$	166.8			24.4		%

INCOME FROM OPERATIONS		94.0			8.1			32.2			2.9			61.8			191.9		$	51.0			5.7		%	$	53.4			7.2		%	$	(2.4	)		(4.5	)	%

Other expense:
Interest income		(0.2	)		—			(0.5	)		—			0.3			(60.0	)	$	(0.8	)		(0.1	)	%	$	(0.2	)		—		%	$	(0.6	)		300.0		%
Interest expense		26.1			2.2			34.1			3.0			(8.0	)		(23.5	)		14.6			1.6				18.7			2.5				(4.1	)		(21.9	)
Change in fair value of warrant liability		1.2			0.1			0.9			—			0.3			33.3			(4.7	)		(0.5	)			(2.2	)		(0.3	)			(2.5	)		113.6
Other		(0.6	)		(0.1	)		(0.5	)		—			(0.1	)		20.0			0.1			—				(0.8	)		(0.1	)			0.9			(112.5	)
Total other expense		26.5			2.3			34.0			3.0			(7.5	)		(22.1	)	$	9.2			1.0		%	$	15.5			2.1		%	$	(6.3	)		(40.6	)	%

Income (loss) before income taxes		67.5			5.8			(1.8	)		(0.3	)		69.3			(3,850.0	)
Income before income taxes																				41.8			4.6		%		37.9			5.1		%		3.9			10.3		%
Income tax expense		18.6			1.6			0.2			—			18.4			9,200.0			11.1			1.2				9.9			1.3				1.2			12.1
Net income (loss)	$	48.9			4.2		$	(2.0	)		(0.2	)	$	50.9			(2,545.0	)
Net income																			$	30.7			3.4		%	$	28.0			3.8		%	$	2.7			9.6		%

OPERATING STATISTICS:
Company miles		170.9						192.8						(21.9	)		(11.4	)		105.3							116.4							(11.1	)		(9.5	)	%
Owner operator miles		139.2						145.3						(6.1	)		(4.2	)		88.7							92.6							(3.9	)		(4.2	)
Total miles (in millions)		310.1						338.1						(28.0	)		(8.3	)		194.0							209.0							(15.0	)		(7.2	)	%

Rate per mile	$	2.71					$	2.45					$	0.26			10.6		$	3.05						$	2.60						$	0.45			17.3		%
Revenue per tractor	$	173,400					$	147,500					$	25,900			17.6		$	127,700						$	111,100						$	16,600			14.9		%

Company-operated tractors, at period-end		2,641						2,979						(338	)		(11.3	)
Owner-operated tractors, at period-end		2,077						2,100						(23	)		(1.1	)
Number of trailers, at period-end		11,266						11,607						(341	)		(2.9	)
Company owned tractors, at quarter-end																				2,652							2,715							(63	)		(2.3	)	%
Owner operator tractors, at quarter-end																				2,038							2,112							(74	)		(3.5	)
Number of trailers, at quarter-end																				11,050							11,266							(216	)		(1.9	)	%

Company-operated tractors, average for the period		2,742						3,417						(675	)		(19.7	)
Owner-operated tractors, average for the period		2,105						2,210						(105	)		(4.7	)
Company owned tractors, average for the period																				2,583							2,778							(195	)		(7.0	)	%
Owner operator tractors, average for the period																				2,049							2,110							(61	)		(2.9	)
Total tractors, average for the period		4,848						5,627						(779	)		(13.8	)		4,632							4,888							(256	)		(5.2	)	%

2625

Table of Contents

The following table sets forth ~~certain~~revenue, operating ~~statistics~~expenses and income from operations (in dollars and as a percentage of total revenue) of the Company’s Specialized Solutions segment for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, as well as ~~revenue,~~certain operating ~~expenses and income (loss) from operations~~statistics for the ~~nine months ended September 30, 2021~~same periods. In addition, the absolute and ~~2020.~~ relative changes for each are presented. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Miles are estimated based on information received as of the filing date and may change quarter to quarter when final information is received from each operating segment. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.

SPECIALIZED SOLUTIONS


	Nine Months Ended September 30,														Six Months Ended June 30,
	2021				2020				Increase (Decrease)						2022						2021					Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	$		%		$		%		$			%			Amount			%			Amount		%			Absolute			Relative
REVENUE(1):
Company freight	$	345.1		52.8	$	383.5		55.0	$	(38.4	)		(10.0	)	$	244.0			49.1	%	$	221.1		54.0	%	$	22.9			10.4		%
Owner operator freight		117.9		18.0		118.7		17.0		(0.8	)		(0.7	)		90.3			18.2			75.3		18.4			15.0			19.9
Brokerage		119.6		18.3		133.7		19.2		(14.1	)		(10.5	)		81.3			16.4			68.1		16.6			13.2			19.4
Logistics		25.0		3.8		26.4		3.8		(1.4	)		(5.3	)		23.4			4.7			16.5		4.0			6.9			41.8
Fuel surcharge		46.2		7.1		34.9		5.0		11.3			32.4			58.1			11.6			28.8		7.0			29.3			101.7
Total revenue		653.8		100.0		697.2		100.0		(43.4	)		(6.2	)	$	497.1			100.0	%	$	409.8		100.0	%	$	87.3			21.3		%

OPERATING EXPENSES(1):
Salaries, wages and employee benefits		176.5		27.0		198.2		28.4		(21.7	)		(11.0	)	$	125.8			25.3	%	$	115.2		28.1	%	$	10.6			9.2		%
Fuel		54.1		8.3		42.8		6.1		11.3			26.3			58.1			11.7			35.7		8.7			22.4			62.7
Operations and maintenance		76.2		11.6		104.2		14.9		(28.0	)		(26.9	)		53.3			10.7			46.9		11.4			6.4			13.6
Purchased freight		190.7		29.2		193.2		27.7		(2.5	)		(1.3	)		145.8			29.3			115.5		28.2			30.3			26.2
Depreciation and amortization		39.4		6.0		42.9		6.2		(3.5	)		(8.1	)		25.2			5.1			26.2		6.4			(1.0	)		(3.8	)
Impairment		—		—		13.4		1.9		(13.4	)		(100.0	)		7.8			1.6			—		—			7.8			100.0
Restructuring		0.2		—		8.3		1.2		(8.1	)		(97.0	)
Restructuring charges																0.4			0.1			0.1		—			0.3			300.0
Other operating expenses		47.6		7.3		55.1		7.9		(7.5	)		(13.7	)		40.4			8.1			30.7		7.5			9.7			31.6
Total operating expenses		584.6		89.4		658.1		94.4		(73.5	)		(11.2	)	$	456.8			91.9	%	$	370.3		90.4	%	$	86.5			23.4		%

INCOME FROM OPERATIONS	$	69.2		10.6	$	39.1		5.6	$	30.1			77.0		$	40.3			8.1	%	$	39.5		9.6	%	$	0.8			2.0		%

OPERATING STATISTICS:																	��
Company miles		112.8				117.4				(4.6	)		(3.9	)		73.8						76.2					(2.4	)		(3.1	)	%
Owner operator miles		36.3				38.2				(1.9	)		(5.0	)		21.6						24.1					(2.5	)		(10.4	)
Total miles (in millions)		149.1				155.6				(6.5	)		(4.2	)		95.4						100.3					(4.9	)		(4.9	)	%

Rate per mile	$	3.11			$	3.23			$	(0.12	)		(3.7	)	$	3.50					$	2.96				$	0.54			18.2		%
Revenue per tractor	$	194,200			$	172,600			$	21,600			12.5		$	145,000					$	124,000				$	21,000			16.9		%

Company-operated tractors, at period-end		1,835				1,960				(125	)		(6.4	)
Owner-operated tractors, at period-end		497				510				(13	)		(2.5	)
Number of trailers, at period-end		7,059				7,278				(219	)		(3.0	)
Company owned tractors, at quarter-end																1,871						1,878					(7	)		(0.4	)	%
Owner operator tractors, at quarter-end																460						511					(51	)		(10.0	)
Number of trailers, at quarter-end																7,171						7,059					112			1.6		%

Company-operated tractors, average for the period		1,876				2,263				(387	)		(17.1	)
Owner-operated tractors, average for the period		507				646				(139	)		(21.4	)
Company owned tractors, average for the period																1,830						1,882					(52	)		(2.8	)	%
Owner operator tractors, average for the period																476						509					(33	)		(6.5	)
Total tractors, average for the period		2,384				2,909				(525	)		(18.1	)		2,306						2,391					(85	)		(3.6	)	%

(1)

Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.

2726

Table of Contents

The following table sets forth ~~certain~~revenue, operating ~~statistics~~expenses and income from operations (in dollars and as a percentage of total revenue) of the Company’s Flatbed Solutions segment for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, as well as ~~revenue,~~certain operating ~~expenses~~statistics for the same periods. In addition, the absolute and ~~income (loss) from operations~~relative changes for ~~nine months ended September 30, 2021 and 2020.~~ each are presented. Rate per mile is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by total number of company and owner operator miles driven in the period. Miles are estimated based on information received as of the filing date and may change quarter to quarter when final information is received from each operating segment. Revenue per tractor is the period’s revenue less fuel surcharge, brokerage and logistics revenues divided by the average number of tractors in the period, including owner operator tractors.

FLATBED SOLUTIONS


	Nine Months Ended September 30,														Six Months Ended June 30,
	2021				2020				Increase (Decrease)						2022					2021					Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	$		%		$		%		$			%			Amount		%			Amount		%			Absolute			Relative
REVENUE(1):
Company freight	$	137.5		26.5	$	147.3		33.7	$	(9.8	)		(6.7	)	$	84.4		20.5	%	$	92.4		27.6	%	$	(8.0	)		(8.7	)	%
Owner operator freight		249.1		48.1		193.5		44.3		55.6			28.7			178.3		43.4			159.9		47.8			18.4			11.5
Brokerage		77.8		15.0		52.6		12.0		25.2			47.9			88.8		21.6			47.5		14.2			41.3			86.9
Logistics		3.6		0.7		2.2		0.5		1.4			63.6			2.0		0.5			2.5		0.7			(0.5	)		(20.0	)
Fuel surcharge		50.3		9.7		41.2		9.5		9.1			22.1			57.6		14.0			32.1		9.7			25.5			79.4
Total revenue		518.3		100.0		436.8		100.0		81.5			18.7		$	411.1		100.0	%	$	334.4		100.0	%	$	76.7			22.9		%

OPERATING EXPENSES(1):
Salaries, wages and employee benefits		86.4		16.7		94.0		21.5		(7.6	)		(8.1	)	$	54.6		13.3	%	$	57.7		17.3	%	$	(3.1	)		(5.4	)	%
Fuel		25.1		4.8		24.4		5.6		0.7			2.8			22.3		5.4			16.7		5.0			5.6			33.5
Operations and maintenance		32.0		6.2		32.0		7.3		(0.0	)		(0.1	)		21.4		5.2			20.8		6.2			0.6			2.9
Purchased freight		263.3		50.8		197.0		45.1		66.3			33.7			229.1		55.7			167.6		50.1			61.5			36.7
Depreciation and amortization		26.5		5.1		27.8		6.4		(1.3	)		(4.8	)		18.4		4.5			17.7		5.3			0.7			4.0
Restructuring		—		—		0.3		0.1		(0.3	)		(100.0	)
Other operating expenses		30.2		5.8		32.7		7.5		(2.5	)		(7.8	)		24.8		6.0			20.0		6.0			4.8			24.0
Total operating expenses		463.3		89.4		408.2		93.5		55.1			13.5		$	370.6		90.1	%	$	300.5		89.9	%	$	70.1			23.3		%

INCOME FROM OPERATIONS	$	55.0		10.6	$	28.6		6.5	$	26.4			92.1		$	40.5		9.9	%	$	33.9		10.1	%	$	6.6			19.5		%

OPERATING STATISTICS:
Company miles		58.1				75.4				(17.3	)		(22.9	)		31.5					40.2					(8.7	)		(21.6	)	%
Owner operator miles		102.9				107.1				(4.2	)		(3.9	)		67.1					68.5					(1.4	)		(2.0	)
Total miles (in millions)		161.0				182.5				(21.5	)		(11.8	)		98.6					108.7					(10.1	)		(9.3	)	%

Rate per mile	$	2.40			$	1.87			$	0.53			28.3		$	2.66				$	2.32				$	0.34			14.7		%
Revenue per tractor	$	156,900			$	125,400			$	31,500			25.1		$	112,900				$	101,000				$	11,900			11.8		%

Company-operated tractors, at period-end		806				1,019				(213	)		(20.9	)
Owner-operated tractors, at period-end		1,580				1,590				(10	)		(0.6	)
Number of trailers, at period-end		4,207				4,329				(122	)		(2.8	)
Company owned tractors, at quarter-end																781					837					(56	)		(6.7	)	%
Owner operator tractors, at quarter-end																1,578					1,601					(23	)		(1.4	)
Number of trailers, at quarter-end																3,879					4,207					(328	)		(7.8	)	%

Company-operated tractors, average for the period		866				1,154				(288	)		(24.9	)
Owner-operated tractors, average for the period		1,598				1,564				34			2.2
Company owned tractors, average for the period																753					896					(143	)		(16.0	)	%
Owner operator tractors, average for the period																1,573					1,601					(28	)		(1.7	)
Total tractors, average for the period		2,464				2,718				(254	)		(9.3	)		2,326					2,497					(171	)		(6.8	)	%

(1)

Includes intersegment revenues and expenses, as applicable, which are eliminated in the Company’s consolidated results.

2827

Table of Contents

Revenue. Total revenue increased ~~$44.0 million, or 3.9% to $1,162.5 million~~22.3% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $1,118.5 million for~~2022 as compared to the same period in ~~2020. The exit of the Aveda operations, which was completed in the fourth quarter of 2020, resulted in a $51.8 million, or 4.5%, reduction in total revenue.~~2021. The increase in total revenue was primarily ~~due~~attributed to ~~record freight rates~~growth in our brokerage service offering, increases in fuel surcharge, and the ~~Flatbed segment. Company freight revenue decreased $47.4 million, or 9.1%, to $475.3 million for the nine months ended September 30, 2021 from $522.7 million for the same period~~sustained strong rate environment with rate per mile increasing 17.3%. The increase in ~~2020. The decrease in company freight~~total revenue was ~~a result of a $31.6 million reduction due to the exit of the Aveda operations in conjunction with a 11.4% decrease in miles due to the downsizing of company trucks,~~ partially offset by a 2.6% increase in rate per mile. The increase in owner operator freight revenue was a result of a 24.2% increase in rate per mile, partially offset by $8.4 million reduction due to the exit of the Aveda operations and a 4.2%7.2% decrease in ~~owner operator~~total miles driven. Brokerage revenue increased $12.3 million, or 6.7%, to $197.1 million for the nine months ended September 30, 2021 from $184.8 million for the same period in 2020 due to increases in customer sales and rates in the Flatbed Solutions segment, partially offset by a $11.4 million reduction due to the exit of the Aveda operations. Fuel surcharge revenue increased $20.8 million, or 27.7%, to $95.9 million for the nine months ended September 30, 2021 from $75.1 million for the same period in 2020 due to increased fuel costs that led to higher fuel surcharges.

The Company’s Specialized Solutions segment’s revenue ~~decreased $43.4 million, or 6.2% to $653.8 million~~increased 21.3% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $697.2 million for~~2022 as compared to the same period in ~~2020. The exit of~~2021, primarily due to higher fuel surcharge and the ~~Aveda operations resulted in a $51.8 million, or 7.9%, reduction~~strong freight rate environment, primarily in the ~~Specialized Solutions segment’s revenue.~~high security cargo, construction and manufacturing end-markets. Company freight ~~revenue decreased $38.4 million, or 10.0%, to $345.1 million~~increased 10.4% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $383.5 million for~~2022 as compared to the same period in ~~2020. The~~2021 due to a 13.9% increase in company rate per mile, partially offset by a 3.1% decrease in ~~total freight revenue was primarily a result of a $40.0 million reduction~~miles driven due to ~~the exit~~supply chain delays in receiving revenue equipment. Owner operator freight increased 19.9% due to a 33.8% increase in owner operator rate per mile, partially offset by a 10.4% decrease in miles driven primarily due to a 6.5% decrease in average owner operator tractors. The Company deployed company-owned assets into end-markets with higher rates and margins, and as such, some of the ~~Aveda operations. Brokerage~~excess volumes, for which the Company was unable to utilize company-owned assets, were captured through our brokerage service offering. This resulted in a 19.4% increase in brokerage revenue ~~decreased $14.1 million, or 10.5%, to $119.6 million~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $133.7 million for~~2022 as compared to the same period in ~~2020 primarily~~2021. In this segment, total brokerage loads were up 9% and the brokerage revenue per load was up 10% due to ~~a $11.4 million reduction due~~higher rates during the six months ended June 30, 2022 as compared to the ~~exit of the Aveda operations combined with a decrease~~same period in ~~customer sales volumes.~~2021. Fuel surcharge revenue increased ~~$11.3 million, or 32.4%, to $46.2 million~~101.7% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $34.9 million for~~2022 as compared to the same period in ~~2020~~2021 due to increased fuel ~~costs that led to higher fuel surcharges.~~costs.

The Company’s Flatbed Solutions segment’s revenue increased ~~$81.5 million, or 18.7%, to $518.3 million~~22.9% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $436.8 million for~~2022 as compared to the same period in ~~2020, which was~~2021, primarily due to increases in owner operator freight revenue, fuel surcharge, and brokerage ~~revenue. Company~~revenue and the strong freight ~~revenue decreased $9.8 million, or 6.7%, to $137.5 million for~~rate environment driven by strength in the ~~nine months ended September 30, 2021 from $147.3 million for the same period in 2020~~construction, manufacturing, steel and agriculture industries. Owner operator freight increased 11.5% due to a ~~22.9% decrease in miles due to the downsizing of company trucks, partially offset by a 21.1%~~13.8% increase in ~~rate per mile. Owner~~owner operator freight revenue increased $55.6 million, or 28.7%, to $249.1 million for the nine months ended September 30, 2021 from $193.5 million for the same period in 2020 predominantly due to a 34.0% increase in rate per mile, partially offset by a ~~3.9%~~2.0% decrease in miles driven. ~~Brokerage~~The Company deployed company-owned assets into end-markets with higher rates and margins, and as such, some of the excess volumes, for which the Company strategically captured through our brokerage service offering. This resulted in a 86.9% increase in brokerage revenue ~~increased $25.2 million, or 47.9%, to $77.8 million~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $52.6 million for~~2022 as compared to the same period in ~~2020~~2021. In this segment, total brokerage loads were up 36% and the brokerage revenue per load was up 38% due to ~~increases~~higher rates during the six months ended June 30, 2022 as compared to the same period in ~~customer sales and in rate.~~2021. Fuel surcharge revenue increased ~~$9.1 million, or 22.1%, to $50.3 million for the nine months ended September 30, 2021 from $41.2 million for the same period in 2020~~79.4% due to increased fuel ~~costs that~~costs. Company freight revenue decreased 8.7% due to supply chain delays in receiving revenue equipment which led to ~~higher fuel surcharges.~~a 21.6% decrease in miles, partially offset by a 16.6% increase in rate per mile.

Salaries, wages and employee benefits expense ~~decreased 8.1% to $280.7 million~~increased 5.8% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $305.6 million for~~2022 as compared to the same period in ~~2020.~~2021. The ~~decrease~~increase in salaries, wages and employee benefits expense was primarily due to ~~decreased~~increased health insurance claims, higher driver pay in the Specialized Solutions segment and increased employee headcount related to ~~Project Synchronize~~the expansion of corporate functions in legal, accounting and ~~lower driver pay due to the decrease in company miles compared to the same period in 2020.~~safety departments. Salaries, wages and employee benefits expense, as a percentage of consolidated revenue (excluding brokerage revenue), decreased ~~3.6%~~3.0% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020.~~2021.

The Company’s Specialized Solutions ~~segment had a $21.7 million, or 11.0%, decrease in~~segment’s salaries, wages and employee benefits expense increased 9.2% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020,~~2021, primarily as a result of ~~the decreased employee headcount related to Project Synchronize~~increased health insurance claims and ~~lower~~higher driver and non-driver pay. The increased driver pay was due to ~~the~~a 9% increase in driver rate, slightly offset by a 3.1% decrease in ~~company miles compared to the same period in 2020.~~Company miles. Salaries, wages and employee benefits expense, as a percentage of Specialized Solutions revenue (excluding brokerage revenue), decreased ~~2.2%~~3.4% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020.~~2021.

The Company’s Flatbed Solutions ~~segment had a $7.6 million, or 8.1%, decrease in~~segment’s salaries, wages and employee benefits expense decreased 5.4% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020,~~2021, primarily as a result of the decreased employee headcount ~~related to Project Synchronize~~ and lower driver pay due to ~~the~~a 21.6% decrease in ~~company~~Company miles, ~~compared to the same period~~partially offset by a 15% increase in ~~2020.~~driver rate. Salaries, wages and employee benefits expense, as a percentage of Flatbed Solutions revenue (excluding brokerage revenue), decreased ~~4.9%~~3.2% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020.~~2021.

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Total fuel expense increased ~~$12.0 million, or 17.9%, to $79.1 million~~53.4% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $67.1 million for~~2022 as compared to the same period in ~~2020.~~2021. This increase was primarily due to a ~~22.5%~~58.9% increase in fuel price, partially offset by a ~~11.4%~~9.5% decrease in Company miles driven. The Company’s Specialized Solutions segment’s fuel expense increased 62.7% for the six months ended June 30, 2022 as compared to the same period in 2021, primarily as a result of the increase in fuel price, partially offset by a 3.1% decrease in Company miles driven for the six months ended June 30, 2022 as compared to the same period in 2021. The Company’s Flatbed Solutions segment’s fuel expense increased 33.5% for the six months ended June 30, 2022 as compared to the same period in 2021, as a result of the increase in fuel price, partially offset by a 21.6% decrease in Company miles driven for the six months ended June 30, 2022 as compared to the same period in 2021. The U.S. national average diesel fuel price, as published by the U.S. Department of Energy, was ~~$3.161~~$4.866 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to ~~$2.579~~$3.062 for the same period in ~~2020.~~2021.

The Company’s Specialized Solutions segment’s fuel expense increased 26.3% to $54.1 million for the nine months ended September 30, 2021 from $42.8 million for the same period in 2020, primarily as a result of the increase in fuel price mentioned above, partially offset by a 3.9% decrease in Company miles driven for the nine months ended September 30, 2021 as compared to the same period in 2020.

The Company’s Flatbed Solutions segment’s fuel expense increased 2.8% to $25.1 million for the nine months ended September 30, 2021 from $24.4 million for the same period in 2020, as a result of the increase in fuel price mentioned above, partially offset by a 22.9% decrease in Company miles driven for the nine months ended September 30, 2021 as compared to the same period in 2020.

Operations and maintenance expense ~~decreased 20.7% to $108.1 million~~increased 10.2% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $136.4 million for~~2022 as compared to the same period in ~~2020~~2021 primarily due to a ~~decrease of $4.9~~$2.4 million increase in maintenance and upkeep costs ~~such~~and a $1.9 million increase in pilot car and permit fees. The Company’s Specialized Solutions segment’s operations and maintenance expense increased 13.6% for the six months ended June 30, 2022 as ~~repairs and tires, $18.3~~compared to the same period in 2021 primarily as a result of a $2.0 million increase in ~~operation costs such as~~ pilot car and permit fees and ~~$5.1~~a $2.1 million increase in ~~other~~maintenance and upkeep costs. The Company’s Flatbed Solutions segment’s operations ~~expenses.~~and maintenance expense was generally consistent for the six months ended June 30, 2022 as compared to the same period in 2021. Operations and maintenance expense, as a percentage of consolidated revenue (excluding brokerage revenue), ~~decreased 3.4% to 11.2%~~was generally consistent for the ~~nine~~six months ended ~~September~~June 30, ~~2021 as compared to 14.6% in the same period in 2020.~~

~~The Company’s Specialized Solutions segment’s operations and maintenance expense decreased $28.0 million, or 26.9%, for the nine months ended September 30, 2021~~2022 as compared to the same period in 2020 as a result of a decrease of $4.8 million in maintenance expense such as repairs and tires due to a reduction of tractors and trailers in the Company’s fleet, a decrease of $18.4 million in operation costs such as pilot car and permit fees and a decrease of $4.7 million in other operations expenses. Operations and maintenance expense, as a percentage of Specialized Solutions revenue (excluding brokerage revenue), decreased 4.2% to 14.3% for the nine months ended September 30, 2021 as compared to 18.5% in the same period in 2020.

The Company’s Flatbed Solutions segment’s operations and maintenance expense was generally consistent for the nine months ended September 30, 2021 as compared to the same period in 2020. Operations and maintenance expense, as a percentage of Flatbed Solutions revenue (excluding brokerage revenue), decreased 1.0% to 7.3% for the nine months ended September 30, 2021 as compared to 8.3% in the same period in 2020.2021.

Total purchased freight expense increased ~~$69.9 million, or 18.7%, to $444.2 million~~33.2% during the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $374.3 million during~~2022 as compared to the same period in ~~2020.~~2021. Purchased freight expense from owner operators increased ~~20.9% to $300.1~~$23.5 million, or 12.2%, during the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $248.3 million during~~2022 as compared to the same period in ~~2020~~2021 as a result of a ~~20.9%~~19.3% increase in owner operators’ rate, partially offset by a 4.2% decrease in owner operator miles driven. Purchased freight expense from third-party capacity providers increased ~~14.3% to $144.0~~$68.4 million, or 81.9%, during the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $126.0 million during~~2022 as compared to the same period in ~~2020,~~2021, as a result of an increase in utilization of third-party capacity providers due to supply chain delays in receiving revenue equipment. In addition, the ~~Company's Flatbed Solutions segment.~~cost of diesel fuel increased by 58.9% during the six months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense, as a percentage of consolidated revenue, for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, increased ~~4.7% for the~~3.4% as compared to the same period in ~~2020.~~2021.

The Company’s Specialized Solutions segment’s purchased freight expense ~~decreased 1.3% to $190.7 million~~increased 26.2% during the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $193.2 million during~~2022 as compared to the same period in ~~2020.~~2021. Purchased freight expense from owner operators increased ~~4.9% to $89.7~~$8.8 million, or 15.2%, during the ~~nine~~six months ended ~~September~~June 30, 2021 from $85.5 million during the same period in 2020, as a result of a 4.5% increase in rate, partially offset by a 5.0% decrease in owner operator miles driven. Purchased freight expense from third-party capacity providers decreased 6.2% to $101.0 million during the nine months ended September 30, 2021 from $107.7 million during the same period in 2020, as a result of a decrease in utilization of third-party capacity providers. Purchased freight expense, as a percentage of Specialized Solutions revenue, for the nine months ended September 30, 2021, increased 1.5%2022 as compared to the same period in ~~2020.~~

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~~The Company’s Flatbed Solutions segment’s purchased freight expense increased 33.7% to $263.3 million for the nine months ended September 30,~~ 2021, from $197.0 million for the same period in 2020. Purchased freight expense from owner operators increased 29.2% to $210.5 million for the nine months ended September 30, 2021 from $162.9 million for the same period in 2020, as a result of a ~~34.0%~~33.8% increase in owner ~~operators’~~operators' rate, partially offset by a ~~3.9%~~10.4% decrease in owner operator miles driven. Purchased freight expense from third-party capacity providers increased ~~54.8% to $52.8~~$21.5 million, or 37.4%, during the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $34.1 million during~~2022 as compared to the same period in ~~2020,~~2021, as a result of an increase in utilization of third-party capacity providers due to supply chain delays in receiving revenue equipment. As mentioned above, there was also an increase in the cost of diesel fuel during the six months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense, as a percentage of Specialized Solutions revenue, for the six months ended June 30, 2022, increased 1.1% as compared to the same period in 2021.

The Company’s Flatbed Solutions segment’s purchased freight expense increased 36.7% for the six months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense from owner operators increased $14.7 million, or 10.9%, for the six months ended June 30, 2022 as compared to the same period in 2021, as a result of a 13.8% increase in owner operators’ rate, partially offset by a 2.0% decrease in owner operator miles driven. Purchased freight expense from third-party capacity providers increased $46.8 million, or 144.4%, during the six months ended June 30, 2022 as compared to the same period in 2021, primarily as a result of increased utilization of third-party capacity ~~providers.~~providers due to supply chain delays in receiving revenue equipment. As mentioned above, there was also an increase in the cost of diesel fuel during the six months ended June 30, 2022 as compared to the same period in 2021. Purchased freight expense, as a percentage of Flatbed Solutions revenue, for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, increased ~~5.7%~~5.6% as compared to the same period in ~~2020.~~2021.

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Depreciation and amortization expense ~~decreased $4.7 million, or 6.6%, to $66.7 million during~~was generally consistent for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $71.4 million during~~2022 as compared to the same period in ~~2020 as a result of a 19.7% decrease in average tractor count in the Company’s fleet.~~

2021. The Company’s Specialized Solutions segment’s depreciation and amortization expense decreased ~~$3.5 million, or 8.1%,~~3.8% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020~~2021 as a result of a ~~17.1%~~2.8% decrease in average tractor count in the segment’s fleet.

The Company’s Flatbed Solutions segment’s depreciation and amortization expense ~~decreased $1.3 million, or 4.8%,~~increased 4.0% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared to the same period in ~~2020~~2021 as a result of ~~a 24.9% decrease in average tractor count in the segment’s fleet.~~recent revenue equipment additions partially offset by disposals of fully depreciated revenue equipment.

~~Administrative Expenses.~~Impairment. ~~Administrative expenses consist of operating lease costs for real estate, professional fees and other expenses that are not directly associated with the Company’s fleet services. Administrative~~Impairment expense ~~decreased $3.8~~was $7.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021 as compared~~2022 related to ~~the same period in 2020 as a result~~goodwill, trade name intangibles, and customer relationships intangibles of ~~cost reduction initiatives. Administrative expenses, as a percentage of revenue, decreased 0.5% from the same period in 2020.~~

~~Taxes and Licenses.~~ ~~Operating taxes and licenses expense primarily represents the costs of taxes and licenses associated with~~an integrated operating segment within the Company’s ~~fleet of equipment and will vary according to the size of its equipment fleet. Taxes and license~~Specialized Solutions segment. There was no impairment expense ~~decreased $1.2 million~~ for the ~~nine~~six months ended ~~September~~June 30, 2021. ~~Operating taxes~~The Company’s Specialized Solutions segment’s impairment expense was $7.8 million consisting of $5.7 million related to goodwill, $1.9 million related to trade name intangibles, and ~~license expense, as a percentage of revenue, was generally consistent~~$0.2 million related to customer relationships intangibles for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022. The Company’s Specialized Solutions segment had no impairment expense for six months ended June 30, 2021. The Company’s Flatbed Solutions segment had no impairment expense for the six months ended June 30, 2022 and ~~2020.~~2021.

Insurance and Claims. Insurance and claims expense consists of insurance premiums and the accruals the Company makes for estimated payments and expenses for claims for bodily injury, property damage, cargo damage and other casualty events. The primary factor affecting the Company’s insurance and claims expense is seasonality (the Company typically experiences higher accident frequency in winter months), the frequency and severity of accidents, trends in the development factors used in its accruals and developments in large, prior-year claims. The frequency of accidents tends to correlate with the miles the Company ~~travels.~~travels; however, insurance and claims expense could increase in periods where there are claims in excess of the Company’s self-insured retention. Insurance and claims expense ~~decreased 13.4% to $40.6 million~~increased 53.6% during the ~~nine~~six months ended ~~September~~June 30, 2021 from $46.9 million during the same period in 2020 due to decreases in miles and decreases in insurance claims and premiums. Insurance and claims, as a percentage of revenue, decreased 0.7% for the nine months ended September 30, 20212022 as compared to the same period in ~~2020.~~

~~Impairment.~~ ~~No impairment expense was recognized during~~2021 primarily due to a $12.9 million increase in insurance claims, primarily resulting from claims over the ~~nine months ended September 30, 2021.~~ AsCompany’s self-insured retention, combined with a ~~result~~$4.7 million increase in our estimate of ~~the then-planned divestiture of Aveda, impairment charges of $13.4~~incurred but not recorded. These increases were partially offset by a $3.1 million ~~were recorded for the same period~~decrease in ~~2020~~ ~~consisting of property and equipment of $4.0 million, right-of-use assets of $3.2 million and tradename intangible assets of $6.2 million.~~

~~Restructuring Costs.~~ Restructuring costs of $0.2 million were recognized in the nine months ended September 30, 2021, compared to $8.6 million in the same period of 2020. The restructuring costs in the nine months ended September 30, 2020 was primarily related to ~~Phase I and II of Project Synchronize, and the closure of~~ certain ~~Aveda terminals.~~insurance premiums.

Other (Income) Expense. Interest expense consists of cash interest, amortization and write-off of related issuance costs and ~~fees and prepayment penalties.~~fees. Interest expense decreased ~~23.5% to $26.1 million~~21.9% for the ~~nine~~six months ended ~~September~~June 30, ~~2021 from $34.1 million for~~2022 as compared to the same period in ~~2020.~~2021. This decrease was primarily attributable to lower interest rates onachieved through the successful refinancing of our Term Loan Facility (as defined below) in March 2021, and decreases in the balance outstanding on ~~equipment term loans.~~the Term Loan Facility. Change in fair value of warrant liability was a ~~loss~~gain of ~~$1.2~~$4.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to a ~~loss~~gain of ~~$0.9~~$2.2 million for the same period in ~~2020.~~2021. The change in fair value is directly related to the fair value of the warrant liability as of each period end as calculated using Level 1 and Level 3 inputs. ~~In addition, for the nine~~The Company’s common stock purchase warrants expired during six months ended ~~September~~June 30, 2021, there was $1.5 million included in interest expense related to the write-off of unamortized debt issuance costs associated with the extinguishment of certain lenders in the debt refinancing. Other income for the nine months ended September 30, 2021 was $0.6 million compared to other income of $0.5 million for the same period in 2020.2022

31 and are no longer exercisable.

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Income Tax. Income tax expense was ~~$18.6~~$11.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to income tax expense of ~~$0.2~~$9.9 million for the same period in ~~2020.~~2021. The effective tax rate was ~~27.6%~~26.6% for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to ~~11.1%~~26.1% for the same period in ~~2020.~~2021. The difference between the Company’s effective ~~income~~ tax rate ~~varies from~~and the federal statutory rate primarily ~~due to~~results from the mix of earnings with state jurisdictions, combined with the ~~unfavorable~~ impact of nontaxable income, primarily related to the change in fair value of the warrant liability, and nondeductible expenses, ~~including the effect of the per diem pay structure for drivers~~primarily related to executive compensation and ~~nondeductible executive compensation.~~goodwill impairment.

Liquidity, Capital Resources and Capital Requirements

The Company had the following sources of liquidity available at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021 (in millions).

(Dollars in millions)

September 30, 2021

December 31, 2020

Cash

$
143.6

$
176.2

Availability under line of credit

117.7

83.2

Total

$
261.3

$
259.4


	June 30, 2022		December 31, 2021
Cash	$	152.0	$	147.5
Availability under line of credit		125.3		107.8
Total	$	277.3	$	255.3

The Company’s primary sources of liquidity have been cash provided by ~~operations,~~operating activities, issuances of capital stock and borrowings under its credit facilities. ~~Cash decreased by $32.6 million at September 30, 2021 as compared to December 31, 2020. This decrease primarily resulted~~The Company also receives cash from ~~$161.9 million in net cash used in financing activities, partially offset by $115.7 million in net cash provided by operating activities. See below for more information. As~~sales of September 30, 2021, the Company had no borrowings, $23.3 million in letters of credit outstanding, and could incur approximately $117.7 million of additional indebtedness under the ABL Facility, based on current qualified collateral.equipment.

The Company’s business requires substantial amounts of cash for operating expenses, including salaries and wages paid to employees, contract payments to independent contractors, insurance and claims payments, tax payments, and others. On March 22, 2021, the Company’s Board of Directors authorized the repurchase of up to three million shares of the Company’s common stock, of which 3,000,000 shares have been repurchased by the Company for approximately $20.4 million in cash through September 30, 2021. The Company also uses large amounts of cash and credit for capital expenditures.

The Company believes it can finance its expected cash needs, including debt repayment, in the short-term with cash flows from operations, and borrowings available under the ABL Facility. The Company expects that the ABL Facility will provide sufficient credit availability to support its ongoing operations, fund debt service requirements, capital expenditures, and working capital needs. Over the long-term, the Company will continue to have significant capital requirements, and expects to devote substantial financial resources to grow its operations and fund its acquisition activities. As a result of these funding requirements, the Company likely will need to sell additional equity or debt securities or seek additional financing through additional borrowings, lease financing or equity capital. The availability of financing or

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equity capital will depend upon the Company’s financial condition and results of operations as well as prevailing market conditions. If such additional borrowings, lease financing or equity capital is not available at the time it needs to incur such expenditures, the Company may be required to extend the maturity of then outstanding indebtedness, rely on alternative financing arrangements or engage in asset sales.

Since its inception, the Company has acquired over twenty transportation companies. The primary reason for each acquisition was to add resources and services in geographic areas, customers and markets that the Company wants to serve. The Company will continue to evaluate potential acquisitions and any other sources of growth it considers in its best interest. Additionally, depending on the Company’s actual and anticipated sources and uses of liquidity, prevailing market conditions and other factors, the Company may from time to time seek to repay or repurchase outstanding debt or equity securities through cash purchases in the open market or privately negotiated transactions. The amounts involved in any such transactions may be material.

Capital Expenditures

The Company follows a dual strategy of both owning assets and employing asset-light activities, the latter of which reduces the capital expenditures required to operate the business. Asset-light activities are conducted utilizing tractors and trailers provided by owner operators and third-party carriers for significant portions of our flatbed and specialized services. Company-owned asset expenditures require substantial cash and financing (including finance and operating leases) to maintain a modern tractor fleet, refresh the trailer fleet, fund replacement and or growth in the revenue equipment fleet, and for the acquisition of real property and improvements to existing terminals and facilities.

Total ~~capital expenditures~~property and equipment additions for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are shown ~~below:~~below (in millions):

Nine Months Ended September 30,

(Dollars in millions)

2021

2020

Net cash capital receipts

$
(13.7
)

$
(34.0
)
Financed capital expenditures

55.0

45.4

Property and equipment purchases and sales

$
41.3

$
11.4


	Six Months Ended June 30,
	2022		2021
Net cash capital expenditures (receipts)	$	4.8	$	(8.6	)
Property and equipment acquired with debt or finance lease obligations		41.3		29.2
Total net property and equipment additions	$	46.1	$	20.6

~~Property~~Total net property and equipment additions increased due to an increase in cash and financed equipment purchases and ~~sales increased primarily due to~~ a decrease in ~~net cash capital receipts which resulted from fewer~~equipment sales ~~of equipment compared to~~ during the ~~prior period.~~six months ended June 30, 2022.

~~Additionally, the~~The Company currently estimates its 2022 net capital expenditures to be $145 million to $155 million.

Operating leases

The Company entered into operating leases for revenue equipment with terms of 2one year to 5five years and real property with terms of 3less than one year to 7twenty years having right-of-use asset values at lease inception of ~~$17.1~~$3.0 million and ~~$4.0~~$15.7 million, respectively, for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

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Material Debt

Overview

As of ~~September~~June 30, ~~2021,~~2022, the Company had the following material debt:

•

the Term Loan Facility and the ABL Facility;

•

~~secured~~ equipment ~~loans~~ and ~~finance lease agreements;~~real estate term loans; and

•

~~bank mortgage secured by real estate.~~finance lease liabilities.

The amounts outstanding under such agreements ~~excluding financing fees,~~ were as follows ~~as of September 30, 2021~~ (in millions):

Term Loan Facility
$
398.0

Equipment term loans

168.8

Finance lease obligations

30.6

Mortgages

2.3

Total long-term debt and finance leases

599.7

Less: current portion

(55.7
)
Long-term debt and finance leases obligations, less current portion
$
544.0

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	June 30,			December 31,
	2022			2021
Term Loan Facility	$	395.0		$	397.0
ABL Facility		—			—
Equipment and real estate term loans		182.6			169.0
Finance lease liabilities		26.7			28.5
Total debt and finance lease liabilities		604.3			594.5
Less current portion		(60.4	)		(55.5	)
Less unamortized deferred financing fees		(7.0	)		(7.6	)
Long-term debt and finance lease liabilities, less current portion and unamortized deferred financing fees	$	536.9		$	531.4

The Company regularly evaluates 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.

See Note 7 of the Notes to Consolidated Financial Statements included herein for information regarding the Company’s material debt.

ABL and Term Loan Facilities and Equipment Financing Agreements

As of ~~September~~June 30, ~~2021,~~2022, the Company has (i) a $400.0 million senior secured term loan credit facility (the Term Loan Credit Facility), and (ii) an asset-based senior secured revolving credit facility with an aggregate maximum credit amount equal to $150.0 million (that may be increased to $200.0 million, subject to availability under a borrowing base). See Note 6 of Notes to Consolidated Financial Statements for more information regarding the Term Loan Facility and the ABL Facility, including the March 9, 2021 Term Loan refinancing and the April 29, 2021 ABL Amendment.

~~The~~As of June 30, 2022, the Company had ~~$168.8~~$182.6 million of ~~term~~equipment and real estate loans and ~~$30.6~~$26.7 million of finance leases collateralized primarily by revenue equipment, with the majority of the equipment loans and finance leases having terms of 48 to 60 months. ~~Certain~~

As of ~~the term loans contain conditions, covenants, representations and warranties, events of default, and indemnification provisions applicable to~~June 30, 2022, the Company ~~and certain of its subsidiaries that are customary for equipment financings, including, but not limited to, limitations~~had no borrowings outstanding on the ~~incurrence~~ABL Facility, $23.3 million in outstanding letters of ~~additional debt~~credit, and ~~the prepayment of existing indebtedness, certain payments (including dividends and other distributions to persons not party to its ABL Facility) and transfers of assets.~~

~~The Company believes it can finance its expected cash needs, including debt repayment, in the short-term with cash flows from operations and borrowings~~$125.3 million available under the ABL ~~Facility. The Company expects that the ABL~~ Facility, will provide sufficient credit availability to support its ongoing operations, fund debt service requirements, capital expenditures, and working capital needs. Over the long-term, the Company will continue to have significant capital requirements, and expects to devote substantial financial resources to grow its operations and fund its acquisition activities. As a result of these funding requirements, the Company may need to sell additional equity or debt securities or seek additional financing through additional borrowings, lease financing or equity capital, though it is not likely that the Company will issue any common stock in the near term. The availability of financing or equity capital will depend upon the Company’s financial condition and results of operations as well as prevailing market conditions. If such additional borrowings, lease financing or equity capital is not available at the time it needs to incur such expenditures, the Company may be required to extend the maturity of then outstanding indebtedness, relybased on ~~alternative financing arrangements or engage in asset sales.~~

~~Letters of credit –~~current qualified collateral. Under the terms of the ABL Facility, lenders may issue up to $40 million of standby letters of credit on our behalf. Outstanding letters of credit reduce the availability on the $150 million ABL Facility. Standby letters of credit are generally issued for the benefit of regulatory authorities, insurance companies and state departments of insurance for the purpose of satisfying certain collateral requirements, primarily related to automobile, workers’ compensation, and general ~~liability insurances.~~insurances liabilities.

~~Off-Balance Sheet Arrangements~~

~~Information about the Company’s standby letters of credit is included in Note 6 of the Notes to Consolidated Financial Statements included herein. See also Liquidity and Capital Resources above.~~

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Cash Flows

The Company’s summary statements of cash flows information for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 is set forth in the table ~~below:~~below (in millions):


	Nine Months Ended September 30,						Six Months Ended June 30,
(Dollars in millions)	2021			2020
							2022			2021
Net cash provided by operating activities	$	115.7		$	122.4		$	51.9		$	58.1
Net cash provided by investing activities	$	13.7		$	34.0
Net cash (used in) provided by investing activities							$	(24.1	)	$	8.6
Net cash used in financing activities	$	(161.9	)	$	(62.7	)	$	(23.6	)	$	(130.9	)

Operating Activities. Cash provided by operating activities was ~~$115.7~~$51.9 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and consisted of ~~$48.9~~$30.7 million of net income plus ~~$80.9~~$46.6 million of non-cash items, consisting primarily of depreciation, amortization, deferred taxes, gain on disposition of property and equipment, ~~non-cash operating lease expense, change in fair value of warrant liability and~~ stock-based compensation, ~~plus $14.1~~and impairment, partially offset by $25.4 million of net cash used in working capital and other activities. Cash used in working capital and other activities during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 reflect an increase of ~~$34.5~~$46.1 million in accounts receivable, ~~a $0.7~~an increase of $4.7 million in drivers’ advances and other receivables, and an increase of $3.9 million in other current assets, ~~and a decrease of $0.4 million in accounts payable, which was~~ partially offset by ~~a $21.1~~an increase of $26.1 million ~~increase~~ in accrued expenses and other liabilities and ~~a $0.4~~an increase of $3.2 million ~~decrease~~ in ~~drivers’ advances and other receivables.~~accounts payable.

The ~~$6.7~~$6.2 million decrease in cash provided by operating activities during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, as compared with the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, was the result of ~~a $50.9 million improvement in net income, reduced by~~ decreases in net cash provided by working capital of ~~$47.0~~$6.9 million and decreases in non-cash items of ~~$10.6 million.~~$2.0 million, reduced by a $2.7 million improvement in net income.

Investing Activities. Cash ~~flows from~~used in investing activities ~~decreased from $34.0~~was $24.1 million for the six months ended June 30, 2022 as compared to cash provided by investing activities of $8.6 million for the ~~three~~six months ended ~~September~~June 30, ~~2020~~2021. This change is primarily due to ~~$13.7~~a $19.3 million ~~provided by investing activities~~cash payment for the ~~nine months ended September 30, 2021 reflecting~~SJ Transportation acquisition, an increase of ~~$16.2~~$7.2 million in cash equipment purchases, and a decrease of ~~$4.1~~$6.2 million in cash receipts from sales of revenue equipment for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

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Total net cash capital expenditures (receipts) for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are shown ~~below:~~below (in millions):


	Nine Months Ended September 30,						Six Months Ended June 30,
(Dollars in millions)	2021			2020
							2022		2021
Revenue equipment (tractors, trailers and trailer accessories)		29.8		$	16.4		$	20.4	$	15.2
Buildings and building improvements		1.2			0.9			2.0		0.3
Other		3.2			0.7			2.8		2.5
Total cash capital expenditures		34.2			18.0			25.2		18.0
Less: Proceeds from sales of property and equipment		47.9			52.0			20.4		26.6
Net cash capital expenditures (receipts)	$	(13.7	)	$	(34.0	)	$	4.8	$	(8.6	)

Financing Activities. Cash ~~flows from financing activities changed from $62.7 million~~ used in financing activities decreased from $130.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 to ~~$161.9~~$23.6 million ~~used in financing activities~~ for the ~~nine~~six months ended ~~September~~June 30, 2022. During the six months ended June 30, 2022, we had approximately $87.0 million less net debt-related payments compared to same period in 2021, primarily as the result of the Company refinancing the Term Loan Facility during the six months ended June 30, 2021. ~~This change was primarily a result of net debt payments of $79.2 million and $20.4~~In addition, during the six months ended June 30, 2022, we received $9.4 million in ~~repurchases of common stock.~~

~~Inflation~~

~~Inflation can have an impact on~~proceeds from warrant exercises compared to none in the ~~Company’s operating costs. A prolonged~~same period of inflation could cause interest rates, fuel, wages and other costs to increase, which would adversely affect the Company’s results of operations unless freight rates correspondingly increase. The Company attempts to limit the effects of inflation through increases in freight rates, certain cost control efforts and limiting the effects of fuel prices through fuel surcharges and measures intended to reduce the consumption of fuel. Over the past three fiscal years, the effect of inflation has been immaterial.

~~Seasonality~~2021

. In ~~the transportation industry, results of operations generally show a seasonal pattern. The Company’s productivity decreases~~addition, during the ~~winter season because inclement weather impedes operations, end-users reduce their activity and certain shippers reduce their shipments during winter. At~~six months ended June 30, 2021, we repurchased $10.5 million in common stock compared to none in the same time, operating expenses increase and fuel efficiency decreases because of engine idling and harsh weather creating higher accident frequency, increased claims and higher equipment repair expenditures. The Company also may suffer from weather-related or other events such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes and explosions. These events mayperiod in 2022

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disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies, destroy the Company’s assets, increase insurance costs or adversely affect the business or financial condition of its customers, any of which could adversely affect the Company’s results of operations or make such results more volatile..

Critical Accounting ~~Policies~~Estimates

The preparation of the Company’s ~~significant accounting policies~~consolidated financial statements in accordance with US GAAP requires it to make estimates and assumptions that impact the amounts reported in its consolidated financial statements and accompanying notes. Therefore, the reported amounts of assets, liabilities, revenue, expenses, and associated disclosures of contingent assets and liabilities are ~~described in Note 1 of Notes to Consolidated Financial Statements~~affected by these estimates and assumptions. The Company evaluates these estimates and assumptions on an ongoing basis, utilizing historical experience, consultation with experts and other methods considered reasonable in the ~~Company’s~~particular circumstances. Nevertheless, actual results may differ significantly from these estimates and assumptions, and it is possible that materially different amounts will be reported using differing estimates or assumptions.

The Company considers critical accounting estimates to be those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company's financial condition or results of operations. See “Critical Accounting Estimates” included in Part II, Item 7 of our Annual Report on Form ~~10-K/A filed on May 6, 2021. The Company considers certain~~10-K for the year ended December 31, 2021, for a discussion of ~~these~~our critical accounting ~~policies to be “critical”~~estimates; there have been no material changes to the ~~portrayal of the~~ Company’s financial position and results of operations, as they require the application of significant judgment by management. As a result, they are subject to an inherent degree of uncertainty. The Company identifies and discusses these “critical” accounting policies in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Company’s Annual Report on Form 10-K/A filed on May 6, 2021. Management bases its estimates and judgments on historical experience and on various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, management evaluates its estimates and judgments, including those considered “critical.” Management has discussed the development, selection and evaluation ofcritical accounting estimates ~~including those deemed “critical,” and the associated disclosures in this Quarterly Report on Form 10-Q with the Audit Committee of the Company’s board of directors.~~as disclosed therein.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the Company’s market risk since December 31, ~~2020.~~2021. For further information on the Company’s market risk, refer to “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form ~~10-K/A~~10-K filed on ~~May 6, 2021.~~February 23, 2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this ~~Quarterly~~ Report, ~~on Form 10-Q,~~ the Company’s management conducted an evaluation, under the supervision and with the participation of the principal executive and principal financial officers, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities and Exchange Act of 1934 (the Exchange Act)). Based on this evaluation, the principal executive and principal financial officers concluded our disclosure controls and procedures were ~~not~~ effective as of ~~September~~June 30, ~~2021 due to material weaknesses in internal control over financial reporting that were disclosed in our Amendment No. 2 to our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020.~~2022.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the three months ended ~~September~~June 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART ~~II.~~II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are involved in litigation and claims primarily arising in the normal course of business, which include claims for personal injury or property damage incurred in the transportation of freight. Based on its knowledge of the facts and, in certain

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cases, advice of outside counsel, the Company believes the resolution of claims and pending litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flows, and the Company and its subsidiaries are not currently a party to, nor is their property currently subject to, any material legal proceedings other than ordinary routine litigation incidental to the business, and we are not aware of any such proceedings contemplated by governmental authorities.

Item 1A. Risk Factors

There have been no material changes in the risks facing the Company as described in ~~Amendment No. 2 to~~ the Company’s Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2020.~~2021.

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~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

~~The following table provides information about our repurchases of Common Stock during the three months ended September 30, 2021:~~

~~ISSUER PURCHASES OF EQUITY SECURITIES~~

Period

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)

Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs(1)

07/01/2021 to 07/31/2021

1,482,377

$
6.63

1,482,377

—

08/01/2021 to 08/31/2021

—

—

—

09/01/2021 to 09/30/2021

—

—

—

Total

1,482,377

$
6.63

1,482,377

~~(1)~~

On March 22, 2021, we announced that our Board of Directors approved a stock repurchase program (the Stock Repurchase Program) pursuant to which the Company is authorized to repurchase up to three million shares of our common stock, par value $0.0001 per share (Common Stock). Repurchases under the Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate. The Stock Repurchase Program is effective until all shares have been repurchased under the Stock Repurchase Program or, if earlier, until our Board of Directors suspends or discontinues the Stock Repurchase Program, which could occur at any time without prior notice. As of July 31, 2021, all 3,000,000 shares of Common Stock have been repurchased under the Stock Repurchase Program and no additional shares may be repurchased under the Stock Repurchase Program.

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Item 6. Exhibits

EXHIBIT INDEX



Exhibit No.	Exhibit

3.1	Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the registrant on March 3, 2017).

3.2	Charter Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed by the registrant on August 6, 2020).

3.3	By-Laws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the registrant on May 25, 2018).

3.4	First Amendment to the By-Laws of Daseke, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the registrant on August 18, 2020).

3.5	Certificate of Designations, Preferences, Rights and Limitations of 7.625% Series A Convertible Cumulative Preferred Stock (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed by the registrant on March 3, 2017).

31.1*	Chief Executive Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.

31.2*	Chief Financial Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.

32.1**	Chief Executive Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.

32.2**	Chief Financial Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.

101.INS*	Inline XBRL Instance Document.

101.SCH*	Inline XBRL Taxonomy Extension Schema Document.

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104	Inline Cover Page Interactive Data File (embedded within the Inline XBRL document).


*	Filed herewith.
**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: ~~October 28, 2021~~August 2, 2022	DASEKE, INC.

	By:	/s/ Jason Bates
	Name:	Jason Bates
	Title:	Chief Financial Officer

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	Fair value as of September 30, 2021
Liabilities:	Level 1		Level 2		Level 3		Total
Warrant liability	$	4.3	$	—	$	3.2	$	7.5
Total fair value	$	4.3	$	—	$	3.2	$	7.5


	Nine Months Ended
	September 30, 2021
Balance at beginning of period	$	2.7
Change in fair value		0.5
Balance at end of period	$	3.2


RLOC Utilization	Base Rate Margins			LIBOR Rate Margins
Less than 33.3%		0.50	%		1.50	%
Greater than or equal to 33.3%, but less than 66.6%		0.75	%		1.75	%
Greater than or equal to 66.6%		1.00	%		2.00	%


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (in millions)
Outstanding as of January 1, 2021		3,114,931		$	6.19		7.9	$	5.9
Granted		20,000			2.39
Exercised		(157,545	)		3.00
Forfeited or expired		(360,764	)		7.11
Outstanding as of September 30, 2021		2,616,622		$	6.23		7.1	$	9.4

Exercisable as of September 30, 2021		1,507,483		$	7.85		6.5	$	3.2
Vested and expected to vest as of September 30, 2021		2,616,622		$	6.23		7.1	$	9.4


Grantee Type	# of Restricted Stock Units Granted		Issued and Outstanding		Vesting Period	Weighted Average Grant Date Fair Value (Per Unit)
Director Group		933,237		39,241	1-2 years	$	2.96
Employee Group		1,832,106		389,708	3-5 years	$	10.07
Total				428,949


	Units			Weighted Average Grant Date Fair Value (Per Unit)
Non-vested as of January 1, 2021		594,801		$	5.72
Granted		302,692			7.04
Vested		(433,117	)		3.98
Forfeited		(35,427	)		10.14
Non-vested as of September 30, 2021		428,949		$	8.05


	Units			Weighted Average Grant Date Fair Value (Per Unit)
Non-vested as of January 1, 2021		1,716,100		$	1.38
Granted		395,178			7.84
Forfeited		(221,100	)		6.30
Non-vested as of September 30, 2021		1,890,178		$	5.44


	Three Months Ended September 30,
	2021						2020						Increase (Decrease)
(Dollars in millions, except Rate per mile and Revenue per tractor)	$			%			$			%			$			%
REVENUE:
Company freight	$	166.6			39.2		$	174.8			46.5		$	(8.2	)		(4.7	)
Owner operator freight		131.1			30.9			103.3			27.5			27.8			26.9
Brokerage		81.9			19.3			65.2			17.3			16.7			25.6
Logistics		9.7			2.3			9.9			2.6			(0.2	)		(2.0	)
Fuel surcharge		35.3			8.3			22.6			6.1			12.7			56.2
Total revenue		424.6			100.0			375.8			100.0			48.8			13.0

OPERATING EXPENSES:
Salaries, wages and employee benefits		96.6			22.8			95.8			25.5			0.8			0.8
Fuel		26.8			6.3			20.2			5.4			6.6			32.7
Operations and maintenance		40.5			9.5			45.5			12.1			(5.0	)		(11.0	)
Communications		0.9			0.2			0.9			0.2			—			—
Purchased freight		167.5			39.4			127.9			34.0			39.6			31.0
Administrative expenses		17.0			4.0			12.6			3.4			4.4			34.9
Sales and marketing		0.5			0.1			0.3			0.1			0.2			66.7
Taxes and licenses		3.5			0.8			3.9			1.0			(0.4	)		(10.3	)
Insurance and claims		13.9			3.3			16.3			4.3			(2.4	)		(14.7	)
Depreciation and amortization		22.3			5.3			22.3			5.9			—			—
Gain on disposition of revenue property and equipment		(5.4	)		(1.2	)		(3.1	)		(0.8	)		(2.3	)		74.2
Restructuring charges		0.1			—			5.1			1.4			(5.0	)		(98.0	)
Total operating expenses		384.2			90.5			347.7			92.5			36.5			10.5

INCOME FROM OPERATIONS		40.4			9.5			28.1			7.5			12.3			43.8

Other expense (income):
Interest income		(0.1	)		—			(0.1	)		—			—			—
Interest expense		7.3			1.7			11.1			3.0			(3.8	)		(34.2	)
Change in fair value of warrant liability		3.4			0.8			3.0			0.8			0.4			13.3
Other		0.2			—			(0.6	)		(0.2	)		0.8			(133.3	)
Total other expense		10.8			2.5			13.4			3.6			(2.6	)		(19.4	)

Income before income taxes		29.6			7.0			14.7			3.9			14.9			101.4
Income tax expense		8.7			2.0			2.0			0.5			6.7			335.0
Net income	$	20.9			4.9		$	12.7			3.4		$	8.2			64.6

OPERATING STATISTICS:
Company miles		54.4						62.0						(7.6	)		(12.3	)
Owner operator miles		46.7						47.8						(1.1	)		(2.3	)
Total miles (in millions)		101.1						109.8						(8.7	)		(7.9	)

Rate per mile	$	2.94					$	2.53					$	0.41			16.2
Revenue per tractor	$	62,500					$	54,100					$	8,400			15.5

Company-operated tractors, at period-end		2,641						2,979						(338	)		(11.3	)
Owner-operated tractors, at period-end		2,077						2,100						(23	)		(1.1	)
Number of trailers, at period-end		11,266						11,607						(341	)		(2.9	)

Company-operated tractors, average for the period		2,672						3,035						(363	)		(12.0	)
Owner-operated tractors, average for the period		2,095						2,104						(9	)		(0.4	)
Total tractors, average for the period		4,767						5,139						(372	)		(7.2	)


(Dollars in millions)	September 30, 2021		December 31, 2020

Cash	$	143.6	$	176.2
Availability under line of credit		117.7		83.2
Total	$	261.3	$	259.4


Term Loan Facility	$	398.0
Equipment term loans		168.8
Finance lease obligations		30.6
Mortgages		2.3
Total long-term debt and finance leases		599.7
Less: current portion		(55.7	)
Long-term debt and finance leases obligations, less current portion	$	544.0


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs(1)
07/01/2021 to 07/31/2021		1,482,377	$	6.63		1,482,377		—
08/01/2021 to 08/31/2021		—				—		—
09/01/2021 to 09/30/2021		—				—		—
Total		1,482,377	$	6.63		1,482,377