Earnings call transcript Q2 2023

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Operator

Good morning, everyone. And thank you for joining today’s conference call to discuss Daseke’s Financial and Operational Results for the Quarter Ended June 30, 2023. With us today are Jonathan Shepko, Chief Executive Officer and Board Member; Aaron Coley, Executive Vice President and Chief Financial Officer; and Adrianne Griffin, Vice President of Investor Relations and Treasurer.

I would like to now turn the call over to Adrianne Griffin. Adrianne, please go ahead.

Adrianne Griffin

Steven. you, Thank

the now in will issued today, earlier the As the press second may call. today’s download made that quarter participants remarks indicated on release XXXX accompany presentation

Presentations Daseke’s access may and Events Investor this section. on portion You website the within presentation in www.daseke.com the Relations and

Slide Litigation statements and meaning within statements. two of contains Reform presentation Today’s the Harbor today’s Safe presentation Securities Act the XXXX. of also of Private our non-GAAP contains forward-looking

statements. our including guidance forward-looking outlook, information, financial are Projected

those to management’s business that respect performance, and projections uncertainties prospects including results cause earnings, statements, Daseke’s Forward-looking that assumptions of and with actual expectations and projections. to are strategies, revenues, are to and other current risks differ aspects could our subject materially on based estimates, from

to undue the business I forward-looking on for that read Exchange Commission the with any discussion our statements. can affect our place and reliance filings a to Securities of risks any not encourage and you

revise as forward-looking to future required of We undertake as or today, our result applicable securities statements by or be no except reflect otherwise, circumstances new events a information, whether occurring may to laws. obligation events

there measures directly investor GAAP call, and items release do flow. the of Accepted be margin, EBITDA Reconciliations conform press this comparable adjusted a measures included appendix cash their or free income, issued will discussion ratio, that adjusted not net Generally most loss and income GAAP, of operating these non-GAAP in presentation to morning. Accounting of adjusted to are some U.S. including the or adjusted EBITDA, also not Principles and the to, During limited adjusted operating

our business will your review of the our In Jonathan over and are we progress turn terms Coley first open will updated questions. results. then for we our the remarks Shepko, provide before the execute key as call XXXX outlook we who making of second our call Aaron today, strategic to conclude structure I update will an operations the on Jonathan our line priorities. an prepared will quarter with

Jonathan. call the With that, to will turn over Jonathan? I

Jonathan Shepko

Good the multiple XXXX, joining in cost the quarterly we of highest Since the quarters our today. freight faced has and of for of company’s delivered quarter ever challenges the morning, our as thank you both industry when consecutive everyone, adjusted rate well side. call our ledger side EBITDA, second as

industry signal While inflection many to optimism in our agreed is inflection of key points here, we the a consistent support continues at remain the watchful eminent. is bottom and for forthcoming its data

Whether environment year point, such recovery approached our opportunity later Daseke. the half and to has reposition ultimately occurs or this in the at of team some current back as an reinvent

is continuing repositioning record current small fundamental that particularly Given XXXX our company organization, public and believe QX executing XXXX company progress misplaced the a on industry of our include basis, evaluate cycle it’s performance quarter-by-quarter versus comparative of end periods publicly we our a business exposure traded peak when truly trough. the our rebuilding performance peers, model to a solid any cycle unmatched breaking our and by cap and of any as with a market successfully discretely

more progress profound in the of recap as up we to-date a and second quarter’s momentum would addition approach context to providing provide I As cycle. such, today, performance, to our around our like the next

allocation comparison footing organization comparison of recession tomorrow. the transformation I the on progress, capital in XXXX. that significant of offer resulting spend and for affected after with close environment current the legacy of freight the will an on strength the pre-COVID This over some the improvement To and performance last update, few illustrates time a Daseke’s of better years of that to provides performance in our summary quarterly financial this Aaron our

across throughout a continues critical this toward our North moment time. though, of contributions our Before would difficult to forward, Their our strong drivers. well of Daseke employee company’s prioritize to take as customers with including team America, relationships, committed and I thank those are who important entire success, like moving as to our legacy success the the

will to Aaron our that, over for turn financials. the With an now call on I update

Aaron Coley

Jonathan, and you, Thank good everyone. morning,

on illustrated during reduce debt hand continued second with the quarter, balance our expense. our which As we balance six, interest term sheet reduced payment cash million, made a on loan $XX to as we by slide to strengthen discretionary our

the $X.X cash receiving on million the In beyond. were class addition, shares also flow the dividend, actions of used B-X payments. thus XX% annual dividend improved $XX we eliminating cash of redeem Series year free These of entire hand of for that remainder million to a preferred cash performance and

maintained end facility. of under $XXX we $XX liquidity quarter, a credit the at the and of healthy available of $XXX cash second million, balance available very our revolving including level million a undrawn million At

for evaluate We prospective to risk current continue return to gross opportunities debt, repayments the shareholders. for adjusted reduce further and improving additional

to and the than was would Notably, seasonal to uplift financial our like quarter same consolidated second typical of revenue that’s review year. I year performance. Turning this quarter quarter XX% the more absent last seven. quarter our lower largely second second was slide million $XXX

fleet lower better However, company-owned additional offsetting $X freight revenue. and improved company brokerage margin entire and of load shift owner-operator with margin pull-through allowed revenue, partially and to us the to utilization intentional of million assets higher company-owned our capture

by agriculture our to in and mining primarily due decrease end operations. strength end construction markets Northwest was underperformance the market more Demand a in Flatbed in than offset

decisive expound This to on One this which his in transformational operating to the will Jonathan second type financial series into initiatives, response in during remarks. of And quarter, closing performance underperforming our of an strategic foundational Daseke, than expected is reorganized another we company action lower segment. operating

the freight the environment, a XXX period basis basis, to year in sequential quarter. better compared second OR challenging period XX% adjusted than and Despite reported prior company points the than current a while lower first quarter the was on

increased EBITDA increased and basis XXX mile rate X%, indicators basis, nascent stabilization freight market. per points, the the in revenue tractor of revenue X% net fact, X%, on per margin In adjusted the increased a increased sequential

the increase activities, and over consumed year equipment, an generating of Finally, operations we which million. cash from sales $XX revenue purchases investing while XX% prior generated flow net of reflects $X from cash quarter, impressive flow million,

year in We our primarily XXXX, of $XX.X a generated which in flow period. cycle. flow portions results than weighted average new equipment in year equipment generation even cycle favorably $X which against of peak cash capability the showed million the continue the These operations, to strong better down the we the period the XX, ago and purchases business of Similarly, reduces prior months compare cost cash through June financing, for capital. was fund six ended million from

slide to eight. now Turning

Our only versus Specialized year, fuel million, while the reported revenue a declined by revenue Solutions $XXX.X segment of surcharge X%. of XX% net decline prior

Solutions Solutions rates continued significant Specialized nearly Specialized offset in recorded X% our we market. to The decline premium that the in in Notably, are increase a segment miles, mile. a capture by to rate have a segment X% per Flatbed

As our quarter, prioritize company-owned company compared margin nearly to continued high year assets, asset-light the flat in team the prior segment freight resulting loading revenue while declined. to in revenue,

which and focused versus was end a and by stronger ago included full strength security period, more the construction acquisition. high lower Demand offset agriculture of security revenue first quarter high than markets cargo energy year in

XX% second Adjusted favorable of of This environment. year last in current quarter XX.X% light quarter is the in the in year. OR current OR quarter XX% of and the was very the freight cycle peak

mile margin EBITDA per by market Despite increasing ago, Adjusted rate million the and tractor and a both Specialized and sequential adjusted we year difference encouraged XX.X%, the from $XX.X per on were the EBITDA in basis. a respectively. conditions are revenue

to Now nine. turning slide

driven nearly haul improved by operational X%, and segment and Solutions X.X% than Flatbed X% continued lower all XXXX, of of the length an while increased fleet, XXXX. of rate average Despite unseated X%, trucks rates head pursuit flat more quarter maintaining Flatbed second by Solutions the remained total by quarter to the of second the During XX% added decline, its trucks. miles excellence

than million prior adjusted XX.X%, million was $XX $XX was of year able XX% which year revenue EBITDA by more by primarily $XX.X increase the million, Adjusted margin more brokerage. in result team and declined The quarter, freight $XXX once versus and XX%, net The these of than respectively. brokerage dynamics again decline to period. due to lower revenue prior EBITDA was million was segment while than the company

Within strength operating focus end industrial serve, markets, manufacturing construction and the steel notably markets in end productivity. we on declines success continue by markets right Pacific to the in will that end results in we our offset demonstrate was the model and asset These more most than Northwest. of

outlook. turn now update our on will back XXXX Jonathan? for an the I Jonathan to call

Jonathan Shepko

Aaron. Thank you,

the Daseke, economic the Before rest on I come. year, share our the to for us One throughout defining our and is business many and guide expanding more strategies transformation, conditions I the insight which outlook freight of want that will ongoing to provide perspective cycles on

our have delivering performance, to baseline, upside more laying the meaningfully financial a the groundwork and cycle of shift when market this higher regardless begun turns. peak while trough We the of navigating low high watermarks

Looking we is our of and distinct to-date million run as finance EBITDA optimization, that with exit Daseke complementary line integration, now One achievements a at target goal slide a comprises phases, our adjusted rate XX. $XX and XXXX. three includes time to and reach

structure intend companies, end together the XXXX. bringing Advancing for and the operations the consolidating of in operating of first by to success phases teams the we finish a Daseke setting tandem, two phase, many integration future and

objectives, mark Solutions specific among them cycle our roadmap pleased remain Specialized Along ratio, follow our the as around XX%. transformation will through to trough. our way, this I towards our we operating will key this is target north magnetic was work very we already where see segment This and

burdensome share. XX, our our flow finance Drilling revenue of allowing phase efficiently the our into term B loan by to of virtuous capital deploying cost equipment maturity present balance reducing and average we weighted leases cash lower cycle additional per earnings on the expire deliver to strong to slide

Specialized flywheel free accretive that will actions a end industrial service be supplemented in the and effect up generate These growth M&A and cash and with will next targets markets incremental flow cycle. offerings on

giving cycle priority, better structure leverage, lower share the higher hence and already strength our looks further risk. sheet With it liquidity, The top lower finance growing as sheet our further earnings. will gross balance than capital count of enhance in of did ownership also balance remarkably and with lower a while will last with more shareholders -- Daseke profiles, capital phase our One

back than my trending Daseke’s at tack to particularly like in a I’d to the evaluate to slides, the value two proposition opening quarter-by-quarter next to of performance our proposing comment, be this attractiveness point these used view, cycle. On rather

walk XXXX. COVID On freight experienced I’d this before to just industry recession, study recession case to our slide like interesting in performance comparing in freight XX, Daseke’s current through the an last

has inflation this would environment more trough, cost cycle’s current is suggests prior downturn made of the pronounced challenging. even I data that contours things recessionary though, to our current and Industry more exhibits similar say, the

If OR trucks you in fleet generated Daseke’s $X.X an adjusted with X,XXX of approximately XXXX, EBITDA billion revenue XX% XX%. margin look of of adjusted at an and

with XX%. half trucks we enhanced a ratio EBITDA first a the XX% X,XXX operated of in Comparatively, smaller profitability margin XXXX, and with and operating adjusted fleet adjusted delivered of

dramatic expected even in for what is you low a date, in trough-to-trough Daseke adjusted but with investors. model see in a and margin create months, our effective which you EBITDA profile if $XXXs, of come more have the to low and more $XXX our sheet, XX improvement million operating of stronger just the from company to all improved will, to So step watermark balance change adjusted today we a something company, EBITDA, channeled the to a

we with which I XX, to freight peak last in last on demonstrate you XXXX, recession On the talk trough slide last will beginning the cycle, the slide. to

While be play different there XXXX, catalysts recovery, there in ignite always COVID-related that was stimulus. to will

generated watermark cycle EBITDA, XXXX we is XXXX, that incremental a During cumulative of adjusted recovery $XXX in the generating peak. the million XXXX, high approximately million three-year of and $XXX ultimately XXXX

mark finance adjusted transformation, last and dramatically print. largely beyond the the cycle, setting of three of followed EBITDA the EBITDA the adjusted at optimization, water eclipse peak by high phases, but during not One would expect this the of record XXXX impending our Daseke ultimately cumulative generated our phases With our shift performance we including incremental business to up cycle, only integration

a In recessionary operating XXXX ratios. also the of to few case XXXX addition of QX I’d reviewed, to our our years just moment which spend compared a the organization that in like Daseke study on continuously only to ago. versus environment I resiliency improving a

focus, of With fuel but quarter about charge ratio, freight it’s performance team this is look comps our at specifically lose easy adjusted or tough all of the XX.X%. talk entire of absolute Daseke, when excluding we second to the recession, quarter our referencing operating encouraged

you are if end of our peer our asset in environment this As group perform the material transportation to the at on we the market-focused pack, that discount right these of trade same adjusted we compare and investor right interested operating in in peers. space, to an relying middle this to well our for ratio strategies even a quarter, and yet

Our model is working.

Specialized XX% target OR resiliency Our company has seen of in segment, we our XX% our XX%. OR. with this Flatbed level of XXs our Southeast performing environment segment, challenged Within of achieved low which the stated to cross-cycle comprises surprising our Flatbed a companies have in

integration Northwest the OR in overall softer noise fleet plagued and for this trouble XX.X markets quarter. building While print in smaller lumber adjusted and to materials Flatbed contributed the our segment

the improvement with no update in current The in at I’d our and close more Before XXXX. the XXXX open on they entered Daseke’s elusive much guidance. market like sluggish than to second half questions, freight year. we outlook with remarks conditions prepared pace the assumes an Today in updated to relationship carriers in now and market the remains a exiting of balance demand supply-demand industry XXXX our

said, adjusted adjusted of that of EBITDA EBITDA would first be of which half anticipate second and imply a XXXX year half range to XXX% That $XXX full between within million. million XXX% XXXX will $XXX we XXXX, the

materials XXXX in we resurgence to revision markets operating while degradation the back from is of in of a back building puts And continued the takes end that this assumptions have wind projections, to shift across impacted -- Pacific have complex Northwest. linked the had in primarily the half our various and demand now XXXX and and

like remain in until quarter. year, giving Notwithstanding and otherwise of more decline Northwest of saw last absent fourth to at availability we typical the reasonably the Flatbed, load way a uncertainty Wind for the economic expect end gradual months wave a we stable to coming

expenditure million and planned year outlook I fleet, capital $XXX support is the costs. unchanged asset-light strategy investments to full maintenance XXXX to million, low the a that of $XXX our age average will in tractors also note at given organic for company reducing thereby maintain

steeper cycle. Experience of balance and with position outsized and rebounds costs, us to operations we suggests improve that we sheet, performance market our enter repays intend all troughs which as for to the up control longer will bolster continue next

Now back take the we call questions. your and Steven? the will turn to operator

Operator

Capital Thank our question you. Instructions] And Sigdahl Craig-Hallum [Operator Group. first is Ryan from of

Ryan Sigdahl

morning, guys. Good

Jonathan Shepko

Ryan. Hi,

Ryan Sigdahl

you any customers key Curious conversations XXXX how much into your based if on visibility, have with right now.

on visibility going going and the what’s much but out the know rates far how spot we -- market, Just at how contract in curious are this point?

Jonathan Shepko

a of Ryan, look Flatbed, are XXXX. we kind mean into rates up, rates visibility projecting possibly for to firm mean, of they To be down couple you are don’t XXXX. of to FTR, in have I you spot points. if a they contract right, X% lot data I projecting give at

publicly them the XXXX our stated if lot Specialized If customers, industry particularly robust. of on you our look segment business, lot at of to be have a shippers, a of extremely our traded going publicly look publicly of -- at traded you is

kind pretty we now of bid a in it more into runway think season has ahead in a beyond. From are XXXX of end right? Flatbed Flatbed, about you commodity-oriented So, and Specialized kind a bag, segment it’s standpoint, If we of going QX resilient and again, bit a think markets. right mixed of

those or left distribution, midpoint, think to are steady a right normal go, customers lot one about that hey, a standard rates the you the deviation If the of you now. kind as of holding right of

think in either still we some to and we are have middle the are rates getting But the end push in You -- end, that are got outliers freight. trying that are compromising and down. we comprising on I

us that sure capacity are telling of also But end trying secure are make they have more rebound hopes kind that and those of to to spring have you capacity commodity other in they to early surprisingly visibility some of guys have an markets. in

on we So, miss this the year we was of comps traded back even lot and but toward our the Wind. tangible a our Don’t cautiously in some did earnings, mention of what publicly optimistic. reduction than have some of maybe related the of state are year guidance some to other half of specifically points their

One big to come markets Aerospace, beat Wind really and -- on XXXX, stated that, side. of and second customer or expect in in Specialized again, do about has raise very two they XXXX specifically specifically clients, our meaningfully consecutively, did Wind back Wind end well us for their the

we So optimistic are cautiously XXXX. about

Ryan Sigdahl

opportunity less entertainment, ones, there cetera? cyclical to sectors thinking of the curious guess any trucks there’s or if I part Is beyond, adjacent phase next focus opportunity on pharma, but to et year maybe And of optimization that’s there? kind more and move into less

Jonathan Shepko

Yeah. There’s absolutely do that. opportunity to

one that does, of build last as kind market strategy an down this an trough, have mean, to think market more and end shifting we this several we of really I I calls, portfolio. that mentioned really the we of much to kind things can focused all-weather the are on of trying as

we mean are looking our build that looking that at more we really resilient are to not I of strip markets investor’s we mean perfect are through beta I going diversification. but a of portfolios. portfolio out to not to get end it,

much really to if some with really use of And the how us this the can end us that look volatility at prospectively can vary. management. think of does drawdown of is, portfolio and rebalance, the things it commodity allows of as end exposure thinking downturn look kind us that those markets, is of It allows one end markets, an one those to those so we at opportunity to on particularly kind about markets with about for end those will, of so how markets that you

can prospectively, about have, it do or allocated to certainly end they so CapEx strategies I whether -- regionally some we different allocated, the -- fleet CapEx will inform market do we think think be I be regionally And tweaking. region that think when --

that better to do this a I bit see kind approach will some and move So of think at we optimization. you get as of little forward portfolio

Ryan Sigdahl

drivers are Good. Swift some Yeah. received very Rumors nice Taylor bonuses.

the of midpoint, the So opportunity on still finance or the a at strategy capital equipment small equipment the point? maybe amount have $XXX same does there to this is then just that cost can guidance, million of an at you for include question Flatbed. me, Last for cheaper at CapEx leased a that leased internally and

Aaron Coley

reduce better our would reduce so financing of forward any proceeds because question. expect number The to and we would of this market revenue in sale from And include the that expect it’s we going leases equipment. would leases, Great yes, overall operating operating in just equipment CapEx generating we gross of that. favor any net to have does

Ryan Sigdahl

Good Thank you. Great. luck guys.

Jonathan Shepko

Thanks, Ryan.

Aaron Coley

Ryan. Thanks,

Operator

you. for moment Thank One question. our next

question TD Cowen. from next comes Alper Elliot of Our

Elliot Alper

Flatbed Great. Thank seeing positive quarter, to back Maybe the some of on and CAT was macro takes operation in can half how you expand construction the on maybe there? thoughts, and the was year in the you side. of encouraging challenges some and you for on the Flatbed, in Northwest are the hear impactful seeing the puts question. I environment the new of homebuilding data curious your mean, maybe the

Jonathan Shepko

Sure. Sure. Yeah.

am So -- continue to I to going Flatbed differentiate Pacific Southeast Flatbed. and are Northwest the going we to between

is call, segment, to probably probably our So, we XX% Southeast on to did said our well. Southeast very which XX% composition -- closer total as of the Flatbed

and they additional looked dedicated business, kind volatile shifting more get that of markets, the dedicated have really of diversify that provide their really sales more picked productivity, out to are to of up markets, to have they executed, drove kind end They end their baseload resiliency. teams improved they business find they

portfolio And quarter quarter, facing. we or our that of of XX% so XX% is maybe talked residential construction, we Northwest, probably, said about of and about made the is up when last the overall look, before,

kind in Northwest. maybe Pacific a lot is of cycle, So residential X% sits a overall of that normalized the in

the manufacturing Owens like just they at seen lot of at supplier I and that. think level kind wholesaler Shingles, materials. of you you inventory buildings So, about kind do level, haven’t the a Roofing level. things And think or about and mean up of when you lumber drawdowns there retail Corning or

things So sitting are absolutely there.

moving there. up is So nothing

consolidated Had -- this OR basis would just of would in low it I down on part as XXX you said, have that probably the you something removed to and directionally the remove moved been, from points. had quarter this XXs OR for X.X Southeast Flatbed, our focused have business this basis probably and points

regions going Ryan end asked. So, to we move how absolutely will exposure we in different I different evaluating around. back assets we are kind we these are and of think mean what about markets, these

But can’t and team to a and we on is differently, they repositioning what in bit Northwest do approach and market assets they trying that the are but overnight. doing focused are up absolutely that can, that there you the little

back has Northwest and margin company on in a that freight again, this the been ability we and of on been seen pretty I higher to starts as one think asset-light relying right? have been shift relying We remarkably think notwithstanding we are quarter. and probably this Wind between worst whole, this. like we So, issues, midst that we in environments have mean, of diversification, I the recessions resilient organization have

Elliot Alper

you. year. should tread and the rates I we the maybe year? rates like one maybe so of it. things rest guidance, suggests the quarter, the back think guess, half about sequentially Got And for looks kind maybe like look water the how the of Flatbed Thank in then could what of commentary it two you in Flatbed those but improved on

Jonathan Shepko

Yeah.

rates. But So, directionally, as again, I to mean, specific I think, will manifest going on we provide seasonal see our itself lesser likely we of prepared extent softening the think more some we guidance are do that and to not volume. and in remarks, a will rates said we

to in our So we of assumptions. kind that have layered

are the and I I say, from we bottom, to the here, out bottom of business. at points there looking aside of that the a kind triangulate lot think, are again, data is some But of also there seasonality think, of the

the spots kind spending I of some if that, shoots most don’t you but looking look, kind peers bright know XX -- out think in of XX is months think whether been on venture generally our has yet, bottom where do the construction, the quite mentioned I they same of and here, are at We certainly on months saying increased. last the non-residential you green are business, of have

at now but not manufacturing and in stable. data, history non-residential mean, great, million in the manufacturing sitting XX.X% are construction, eight went jobs industrial June. from to You certainly silos, in construction, I the so ISM highest XX%

So a little uptick. bit an of

So, a there’s certainly bright spots.

are a consumer corporate been into late remains if strong, The rolling something that other really, said think, below whatever we I the that have in and day getting long five-year earnings spot for so, long look long, resilient the you average. at means, the really that time rate I reasonably this first the is long, read down cycle. And rates, time, spot time current

sitting spot in the that equation earnings, positive improving XXXX, are here our had and operating of the of massive loss about XXXX, rate where inflation quarter. we this were where is think that below are we cash to the were then date, peers So, you the some seeing have since net cost rates current flow on side our

our sheet, are ahead have getting really again, are just we us, a doing got to optimize we things think we We good of and started. transformation balance

of cycle. lot that a momentum there’s here eventual into going So up

Elliot Alper

that. you. Thank I appreciate

Jonathan Shepko

Thanks, Sure. Elliot.

Operator

question. Thank our One moment queue next you. [Operator we Instructions] while

of Gibas question from Northland go ahead. Please next Greg Securities. is Our

Greg Gibas

taking for question. Thanks the Hey.

on pace expand kind the the how are of to and that capacity -- of expect we elongate First, you that slow you of would seeing commented maybe that market. that exiting you are market, could pace pace with slow a right the you given just freight seeing now? Wondering there in recovery on the if

Jonathan Shepko

all look, have last difficult we to Look, think, reluctant think, Yeah. our too we Greg. and say, right haven’t quarters I crystal peers so I try other out. a gotten and mean, of look completely to make ball in to we frankly, far couple little are predictions as I -- it’s of them the

am at end tell What suggests of we are normal short think the to see could that saying really environment. peak, to there I year. of some early is, up, the kind normal not in shoots of you of a I points return peak bottom the can but sticks hockey year. year. I of seasonality that some a normalization suggest next saying thing is not lot kind this am data there reversion up, next We strong directionally

is customers, think at -- and broadly lot across excited our gets corporate that just corporate of and when when -- some the you industries think, this I look, talk earnings I But the from you to look think commentary a and this earnings quarter. I what us of really commentary

environment. the you things lacking that there consumer, lot of from right what’s that, the the read decisive to the rate transact, demand is you articles on about but because When a everybody of think all reluctant think, the all there a to transparency as is now, Fed I kind to there’s going happen with

we back think going our want drawdowns, things Fed what want us when to to bright want I pretty they to to the waiting transact. that, in clarity is are build move comes things, do to business. Demand the move seeing are quickly. market, to we people things, does inventory spots but want think to I things, But is see encourages seeing are They everybody what and they that

to not are we we -- that’s are not certainly But happen. assuming going

We are not planning our business that. around

We to will we this, wasting opportunistic are and what and quote-unquote, if are crisis, recession, when our balance not wasting this being sheet protecting doing not defensive and we it being comes you we going the to to processes, again, this when come bench, really can of our fighting the improve improve turn. and improve are talent business, to things add do out really structures, good the

Greg Gibas

kind pretty you business, improvements right? free ask, in show growth the in the I half the continue mean Great. improvement That’s had second like that helpful. despite cash free of does decline wanted flow looking earnings. to expect I And flow to meaningful And just of the we despite cash flat to think substantial, into I relative the back it in that should the at to half? as just half kind year-over-year, first QX

Aaron Coley

million $XX and our selling of you of flow I activities in the like start Yeah. as purchasing operations the was cash equipment half first mean, cash generating million. We year revenue operating or pull-through. the investing flow mentioned, almost net had from $X cash flow we and

cash really flow. we the like So do

We conversion. are cash focused on

are We focused on rates.

single We unit round the are that to or profitable are for tractors focused every profitable lanes they that so trailer on getting in is X,XXX that on running lanes at a with sure make trailer least we every get each trip. all economics day

continue within So of in cash working we we the are to believe slide average described profile as flow we on One we capital initiatives business, weighted ability Daseke to our believe XX. to lower in its generate of the flow and cost cash

Greg Gibas

what on I so? guess of legs at value catalysts XXXX it, in in side terms months actually, second you detailing cost half can do we slide really say first creation. six just back kind I XX an call for that early phase? look that one or look next, and of helpful. the drive maybe That’s are What three would in me and to of improving those that kind What last business of would second in is, Perfect. improvement as or just the

Jonathan Shepko

once and mean siloed on companies our of we have respect operating we centralized to touched lot lot I work are what I the on disparate a as taking of phase. XX mean, bring integration on, the finance the call, kind as philosophy, taking doing a Greg, we align I mean, together, It’s that integration. it’s talent, got of strategy. kind align on with but of a it now, group of very stream suggests. highly highly and continuing kind of Yeah, what the we -- specifically and to name talent was touched really is operations

are integrating quite you management if kind with aren’t sophisticated, right, be teams a out, whose big as systems quite them doing. quite not that’s refined whose and brother point, what maybe might really so of processes that’s point as will, is, sister, best really what of the really and purpose bit kind kind who use highest Aaron’s a companies in to profit And kind assets whose the is some it’s and these venues taking and big built subscale of aren’t as we are really operating this of and little of

then flow, you generate per talent deeper metric expertise to are truck, those bear to that you earnings, are that really a you And perspective bench overlaying want of because bring and to higher sophisticated on of whatever you do allowed EBITDA, more and integrations. cash perspective,

Aaron Coley

that, way and to building is scale. I it’s kind look create another at about X of think, think to that integration Phase and so post-acquisition on just about X, kind of And really Phase

Jonathan So or of those completely some part, mentioned, of is and and teams scale past, first the we weren’t at together, companies phase the over acquired so as capabilities. those of putting those adding building a together operating lot kind companies

of to share is this kind are we phase, more you wallet OpCo as those so strategy, And expanding best go-to-market beyond next unlocking one adding doing are practices, another around services where phases. the look and three and commercial potential sharing of

see in we I and are appreciate the benefits the you third picking up concurrently of of done are some three and those will to there phases, being on one start kind one we and that two of of the future. cusp kind

Greg Gibas

guys. helpful. That’s Thanks, Great.

Jonathan Shepko

Thanks, Greg.

Aaron Coley

Thanks, Greg.

Operator

Okay. his session. for Mr. you call now participation ahead. the to go remarks. Thank concludes turn over closing I That Shepko for will the Mr. question-and-answer today. your Shepko,

Jonathan Shepko

Steven. insight Thank Daseke you, potential you have with a our up to you. its Thank and solid need of One in end markets. catalyst platform I for more industrial coming cycle growth outperformance of bit a combination To hope conclude,

with I perspective. firmly hand-in-hand add a again, the our Daseke thematic new to right our to EBITDA functional will the and cycle stories remain across incremental diversification quarter, One success. enhanced I market goal, last end our asset be believe mentioned critically go objectives transformation. But that by Our as must

will leverage deep diverse of we mindset our team, in mindset, solutions to the differentiated further cycle. If experience even ideas the we of us value together. improvement and more upcoming data capabilities new take our openness this unlock that expansive continuous A and and collaboration, will with and

decades. also As together. for this in He building industry welcome strong note, role than been June two the took Hoppe we the I’d the team, future all the a executive one you final CEO to forward for to with morning. in look Thank Scott officially he’s and although like more company your to and time

Operator

today’s Thank you participating. for concludes call. This conference

disconnect. now You may

Daseke (DSKE) 3 Aug 232023 Q2 Earnings call transcript