 Operational execution and self-help actions offset market weakness to drive Operating Income growth Company delivers strongest quarterly Operating Ratio performance as a public companyADDISON, Texas, Aug. 06, 2020 GLOBE NEWSWIRE -- Daseke, Inc. NASDAQ: DSKE Daseke or the Company, the largest flatbed, specialized transportation and logistics solutions company in North America, today reported financial results for the second quarter ended June 30, 2020.Second Quarter Highlights: Revenue of 351.7 million Net Income of 0.5 million, or 0.01 per share attributable to common stockholders Adjusted Net Income was 8.0 million, or 0.10 per share attributable to common stockholders Adjusted EBITDA was 43.7 million, or 45.9 million, after excluding the results from Aveda Transportation and Energy Services Aveda which is in the process of being divested Cash flows from operating activities of 53.2 million and Free Cash Flow of 73.4 million Substantial progress made during the quarter regarding the strategic divestiture of the Aveda assets held for sale, including collection of approximately 48 million in proceeds from the sale of property and equipment, and reduction in net working capital Delivered Operating Ratio OR of 96.5, which improved by 250 basis points year-over-year and was the best performance in the Companys history as a public company Cash and cash equivalents increased by 93.6 million year-over-year to 157.3 million and Company maintains 82.6 million available under the revolving credit facility, for total available liquidity of 239.9 millionManagement CommentaryWhile the last few months have been challenging for our industry and our people, I am very proud of how our entire team has stepped up in the face of significant change to safely deliver both value for our customers and strong results for our stakeholders, said Chris Easter, Chief Executive Officer of Daseke. The earnings power of our organization is starting to show through despite the challenging environment brought on by the pandemic, driven by the significant transformational work we have done over the last year to improve our operations and financial returns. While softer market conditions impeded our top-line results, the impacts of our improved operational and cost improvement plans helped Daseke more than double its quarterly operating income performance year-over-year. As a result, we delivered an OR of 96.5, the best quarterly performance in our history as a public company.Easter continued, We took swift action at the onset of the pandemic to drive out cost and best optimize our assets for the changing environment. These actions, on top of the extensive operational improvements and integrations weve executed, have created further resilience in our business model. The year-over-year improvement in both operating income and net earnings is translating into stronger cash flow performance, as evidenced by the 73.4 million of Free Cash Flow generated during the second quarter. This growth in cash flows is further serving our strategic priorities, enabling Daseke to consistently improve our balance sheet and financial flexibility through leverage reduction and enhanced liquidity provisions. Moving forward, we remain committed to driving positive Free Cash Flow generation and strengthening our balance sheet. We will also continue to invest prudently in our business to optimize our assets, lower the average age of our fleet, and prepare to fully leverage our niche leadership position as we exit the pandemic.Second Quarter 2020 Financial ResultsTotal revenue in the second quarter of 2020 decreased 22 to 351.7 million, compared to 450.6 million in the year-ago quarter. Excluding the impact of the Aveda business to both 2020 and 2019, second quarter revenue decreased by 13.5. This year-over-year decrease in revenue was driven primarily by the economic impact of COVID-19, which led to lower freight volumes and lower freight rates in both the flatbed and specialized segments.Operating income in the second quarter of 2020 was 12.4 million, compared to operating income of 4.7 million in the year-ago quarter. The increase in operating income year-over-year was driven by decreases in salaries, wages and employee benefits, fuel expense, maintenance expense, purchased freight and depreciation and amortization.Net income for the second quarter of 2020 was 0.5 million, or 0.01 per share attributable to common stockholders, compared to net loss of 6.4 million, or 0.12 per share attributable to common stockholders, in the year-ago quarter. Adjusted Net Income was 8.0 million, which excludes, among other things, business transformation and restructuring costs of 5.7 million, compared to Adjusted Net Income of 3.4 million in the second quarter of 2019. Adjusted EBITDA in the second quarter of 2020 was 43.7 million compared to 46.0 million in the year-ago quarter. Excluding the impact of the Aveda business, second quarter Adjusted EBITDA increased 13.3 to 45.9 compared to 40.5 in the comparable period last year. The year-over-year decline in Adjusted EBITDA was driven primarily by the divestiture of the Aveda business and lower freight volumes due to COVID-19, partially offset by contributions from the Companys operational improvement plans.Segment ResultsSpecialized Solutions - Specialized Solutions revenue in the second quarter of 2020 decreased 21 to 221.5 million compared to 280.7 million in the year-ago quarter. Operating income in the second quarter of 2020 was 14.5 million compared to operating income of 11.1 million in the year-ago quarter. Operating ratio improved by 250 basis points to 93.5, compared to 96.0 in the year-ago quarter. Net income in the second quarter was 8.7 million compared to net income of 6.1 million in the year ago quarter. Adjusted EBITDA in the second quarter of 2020 decreased 13 to 33.0 million compared to 37.8 million in the year-ago quarter, driven primarily by the divestiture of the Aveda business and lower freight volumes, which were partially offset by continued strength in wind energy markets. Rate per mile in the second quarter of 2020 of 3.16 was down 11 from the prior-year quarter, and revenue per tractor decreased 13 to 56,400. Excluding Aveda, Specialized rate per mile and revenue per tractor increased 5 and 1, respectively, versus the prior year, despite the 6 decline in Specialized revenues excluding Aveda.Flatbed Solutions - Flatbed Solutions revenue in the second quarter of 2020 decreased 22 to 137.2 million compared to 174.9 million in the year-ago quarter. Operating income in the second quarter of 2020 was 10.7 million compared to 6.1 million in the year-ago quarter. Operating ratio improved by 430 basis points to 92.2, compared to 96.5 in the year-ago quarter. Net income in the second quarter of 2020 was 6.0 million, compared to net income of 2.3 million in the year ago quarter. Adjusted EBITDA in the second quarter of 2020 increased 3 to 20.4 million, compared to 19.9 million in the year-ago quarter, driven by operator integrations and business improvement plans executed over the trailing year, partially offset by lower freight volumes and weaker freight rates. Rate per mile in the second quarter of 2020 of 1.80 was down 7 from the prior-year quarter, and revenue per tractor decreased 5 to 40,100.Balance Sheet and Free Cash FlowAt June 30, 2020, Daseke had cash and cash equivalents of 157.3 million and 82.6 million available under its revolving credit facility, for total available liquidity of 239.9 million. Total debt was 689.4 million and net debt was 532.1 million. This compares to cash and cash equivalents of 63.7 million and 85.2 million available on the revolving credit facility, total available liquidity of 148.9 million, total debt of 713.8 million, and net debt of 650.1 million at June 30, 2019. Our leverage ratio as defined by our credit agreement as of June 30, 2020 was 3.0x.For the quarter, net cash provided by operating activities was 53.2 million, cash capital expenditures were 10.4 million, and cash proceeds from the sale of excess property and equipment were 30.6 million, resulting in Free Cash Flow of 73.4 million. Additionally, capital expenditures financed with debt, capital leases net of notes receivables was 20.1 million. This compares to net cash provided by operating activities of 18.5 million, cash capital expenditures of 8.2 million, and cash proceeds from the sale of excess property and equipment of 11.9 million, resulting in Free Cash Flow of 22.2 million in the second quarter of 2019. Capital expenditures financed with debt and capital leases net of notes receivable were 22.9 million in the second quarter of 2019.Aveda Transportation and Energy Services UpdateDuring the second quarter of 2020, management made material progress on its plan to strategically divest Avedas assets and operations. Total net proceeds through the end of the second quarter associated with the strategic divestiture totaled approximately 48 million from the sale of property and equipment, and a reduction in net working capital. Management believes that the divestiture process will be finalized before the completion of the third quarter of 2020. OutlookEaster concluded, On a consolidated basis, our freight volumes incrementally improved week-to-week through both May and June, albeit off a low base, after troughing in April. Daseke serves a diverse customer base and various end markets within the industrial economy, and we anticipate that each end market will continue to display recovery curves specific to each individual market. 