Daseke (DSKE) 8 Aug 202020 Q2 Earnings call transcript

Good morning, everyone, and thank you for participating in today’s conference call to discuss Daseke’s financial results for the second quarter ended June 30, 2020. With us today are Chris Easter, CEO; Jason Bates, EVP and CFO; and John Michell, VP of Treasury and Investor Relations. After their prepared remarks, the management team will take your questions.

As a reminder, you may now download the PDF of the presentation slides that will accompany the remarks made on today’s conference call as indicated in the press release we issued earlier today.

You may access these slides in the Investor Relations section of our website.

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structure will a our today, making the environment progress our of through with we call our terms business will start navigate will then quarter, against open Chris execute we of pandemic questions. In the the back up review with as to strategic financial of we remarks for of and few operations before priorities. the and through are the and walk review closing the come Jason our with a Chris comments line wrap

Daseke’s call turn Mr. Now I to Chris over like would to CEO, the Chris? Easter.

In Daseke achieved of ratio. year-over-year. was and more taken operating ago and COVID-XX improved points our of Slide dramatically a was family and Thank commitment, was takeaways basis we a in since year-over-year by X best quarterly OR XX.X% This you, from key The public represents results improvement than everyone. the years XXX by of the the able entire the as by execution solid few outlines I’m second weighed Brooks, good were down operating work, and a in deliver to our hard quarter achieved morning, team COVID-XX, quarter. headwinds. a the spite company pleased second Daseke quarter three

an launched and line touch pleased accelerating our swift positive on even a related potential to We transformation terms a and more pandemic will impacts challenge the year, was August, the market response trajectory. be continued demonstrated period, execution The challenging additional that particularly fact to of what the accomplished just improvement. transformation decline net achieved was earnings in has what It the also We coupled of of face our team to resilience income, in great extremely is I this performance in of positive around turned initial and less team prouder accomplishment to actions, considering in in extreme conditions. getting exciting I’m could is with not key business were of team upside our drivers are than started the in OR cost which bottom its XX.X% our note important actions from announce that to model of short a this actions loss last tactical a I potential of COVID-XX. the later what we improvement. has this our our is in environment. the also deliver more to still the call. And

materially actually and helped like are diverse energy, demonstrate well end end offsetting helped Our the us the in end as ahead verticals These quarter aerospace steady customers, lumber through strength model. like wind markets COVID-XX, served building year. portfolio of held fairly portfolio services, offset markets progressing impacted and and of other and softness diversified our end of markets were last by These markets that metals. materials

the of further capacity not is that, effects we saw pandemic, resilience the by portfolio. Our across said asset-light and brokerage bolstered to we were significant the of portion Having as immune our then which declines, decline during consolidated in our negatively May impacted an immediate quarter. line April We through our improved June. troughed and volume which sequentially and the experienced to volumes, freight top

of we forward, side. and continue freight on to will monitor closely are our confident through the to market in other to a ability volumes turbulence look we the strength navigate position our As

Services divestiture made we Energy During progress our business. the Transportation also second and on of significant strategic the Aveda quarter,

our As to rest make rather reaction a better but Aveda actions undertaking decision after not macro to to we announced platform. proactive decision nor quarter. this late the assets as did cost with so business’ sell last factors, align a the did the the lightly of reminder, We structure

of end for that fit organization. However, not long-term day, our strategic was nor at an business ideal this we decided the the

net in on divestiture, the million from approximately and the we collected $XX quarter. the of financial proceeds terms sale second In PP&E in net the during of capital our progress working reduction

oil emphasize to previously third We million we expect and sale, quarter, to process. cash At cash And of We credit have the this asset related exposure achieved market gas costs our the and down such strengthening divestiture but ongoing of end the disclosed. helps drive I’ll of as complete of our ability sales. on one was majority $X held financial balance pandemic we about the progress cash the $XXX Aveda our between $X.X third times. divestiture the By from on flow year complete, less the we has of second the as revolving undrawn to the this reiterate and hope that to quarter flows usage onetime the will $XX quarter. well hand of we’d by as than our facility. disclosure, above and end business, X, fully this turn to completed expect strong the beyond quarter-over-quarter. I’ll sheet. see process end Slide cash quarter million in to work is bigger our performance by over our of the large to the was the three the Please over generate nearly for leverage drop expect XX% net to aforementioned company’s on and healthy assets, as it sale in increased more and the past highlights free liquidity during available in to non-core details when a Therefore, of closing terminations end the revenue lease of to XXXX To roughly the cash and our previous provide historical despite page solid any with offset of XX% to cash complete million million position that X%. reduce to had our lower fully QX, still with ratio This helped our a few us severance free but debt PP&E that retained team our proceeds. continuing

of XXXX. line to First, same revenue $XXX pushes which mentioned we was XX% our down freight end earlier. the that in given when had and This markets about pulls expectations, in various was the I quarter with of million, demand compared largely

decline its which of the Additionally, quarter. reduction sales, resulted Aveda through components the the came in of that nearly portfolio of from from sale various half

was roughly business Aveda, XX%. core the exclude If revenue you down

Our $XX came down for the X%. million EBITDA adjusted quarter, in at only

$XX.X our long both strong due free However, of The and million cash cash cost asset sales the in efforts. flow containment when generation and during $XX to combination Aveda, operational was both long-term flow our adjusted EBITDA and Aveda was million helped excluding period. generate – short-term up XX% us

to need year-over-year sheet pandemic the with by we by of as has us reducing over exit market and Looking months, leader. balance debt the turn to prepared a Please niche stronger invest our also has X. resources the to of generated to so provided excess That $XXX Slide million business, fullness the are we’ve we in flow. net last free our strengthen allowed million $XXX us XX capital cash

weeks the of operational strength. As then from that proved I through our proactive In we ability improvement plan year critical said pandemic, navigate only efforts one our this ago, a earlier, do only announced two position but hindsight, to so of later. and those not roughly to accelerated foundation to plan

on as in transformational of improvement remain a the basis program Please and X. million the rate we As you the of we we goal $XX spite to run headwinds. turn we’re know, of achieve Phase Slide in fiscal all the middle XXXX, enter outlined, on II to COVID-XX pace

last not been doing important cost simply that is work investors our we’ve I a think understand it’s exercise. that hard the the over year

through this Daseke work. are a We stronger building

our applied to which we’re be simplifying units XX are reducing can business a by refining cross-platform X, in and First, best from operating practices, we fashion.

Chief in then May. out I’ve build we and as in to April, team, leadership continue our Officer Williams added Operating our announced Rick We as Jason

of at investing truck X.X X.X the are evidenced fleet year. have fact average age We start this years about lowered either, not from we the years shortsighted to being our by in our

are utilization driven, important of commodity all areas our more which Finally, particularly in flatbed our increasing business of that our we assets, is solutions. focused like are on of the

We are our improved operating ratio. transformational of results our clearly efforts through the seeing

but With ability are in We companies, market room continue and we to our simplified the regardless progress over our great have XX.X% are significant last environment. quarters, operating of drive improvement. platform have and continued the with at our reported few of to satisfied all OR OR improve for the not current made from we confident nine

second quarter, the new operating role our Jason focus to continued that, will operational moving working into excellence turn the We operate momentum. to review that as call looking And Officer Chief to the Williams sub-XX% will through bring our during that we today. Rick performance his With we Jason? I help for at maintain are Bates this initiatives, With the quarter. have others. to the Operating now on he several over ratios operating are companies forward financial

you, Chris. Thank Great.

both presented X, Our of and XXXX without on QX the with consolidated details impact Slide financial are Aveda.

by assist But for the per compared to year-over-year in EBITDA volumes last earnings dividend $X.X million to our down the equates a modeling prior at when you results. This is second result down actually after you you meaningfully $X.X enabled to weighed in of COVID-XX ago decision Aveda, pandemic to excluding area stockholders. go-forward $X.X in EBITDA segments our to performance Adjusted better improved made driven as and Again, latter look real contrast This income where and the common million, – mentioned, down in freight to see The adjusted net quarter both to million, on grew see This improvement XX%, million core $X we $XXX.X was of roughly XX% improved preferred Given was Adjusted GAAP side $XX.X the million, quarter. we $X.X of was million general compares $XX million the we X% operating XX% analyzing year’s quarter. positive the across rates industrial the business Net a net specialized net was have Aveda right-hand a the impacts ago million. positive which on lower million as the in compared was income compared $X.XX million revenue of of loss of overcome by and and exit favorably provided operational impacted and the our operational in earnings in year information income when slide, as net negatively income In only a $XXX.X another a we impact basis. result to broader of decline the weighed a as second space, This which the cost flatbed attributable on freight dampened which a activity rates, previously Aveda. our exclude the as year and loss share, plans, volumes quarter. improvement year quarter. our to demand highlights million team’s quarter. improvement strategic business, the to quarter. to revenue our in production have our quarter, excluding and adjusted softening this was industrial can Chris this discussed. on integration us the our $XX.X strong $XX of

moving allow also which Before briefly touch quarter. me last year’s operating EBITDA its versus improved to on adjusted on to corporate segments, segment, the our second

this As of efforts cost to the initiatives containment mentioned our as adapt portion on as of benefit taken last global earnings quarter’s from pandemic. rightsizing to call, is cost executive well as additional reduction expected such to the staff business

evidenced compared XX%. the corporate to quarter improvement year’s table, last additional we drive $X of able were of costs an to an As out on second or million

on X. segment to detailed starting Moving our a specialized our results, more at look on segment Slide with

and Aveda as a reported results sale, with second given and and Specialized discussion end of For in-depth gas. this revenue more speak $XXX.X to to pressure process will forma driven in the I in by decreased for second pro the the XX% XX% oil divestiture manufacturing markets weakness aerospace primarily to again classified assets our for the million. then the quarter addition $XX in EBITDA segment the million, year-over-year Aveda business, in to held quarter continued ongoing decreased divestiture. Adjusted headline for

$XX.X XX% XX.X%, quarter. marks last detail $XX.X improvement The Notably, specialized of XX% X% versus compared was also $XXX.X line results year’s grew a Adjusted XXX segment results, to roughly year-over-year Aveda. of adjusted Despite operating top the of million by Turning we achieved versus adjusted ratio Revenue period. this margins XX.X%, operating year’s steady prior quarter second by EBITDA adjusted improved X% by to to points year X, the in of quarter. basis EBITDA basis year-over-year. which pressure, specialized grew our million, the last of ratio of compared Slide OR, points second EBITDA million, XXXX. second in where ex XXX declined

quarter. specialized rate mile increased $X.XX up in roughly per from ago year Our to X% $X.XX, the

little a was a macro in of markets Improved key the see in OR weaker weakness. revenues wind per face the by sub-XX% projects, While as X% which have tractor while certain and $XX,XXX. rebound revenue more adjusted increased from remained a environment top evidenced energy and demand EBITDA end X% than the by supported profitability, to strong, improvement broader-based other line

have a diverse growth experiencing wide As Chris array with and each economic to alluded a customer to of base earlier, markets, patterns. we which end very industrial exposure of are respective their recovery own

number market. further when technical a the results. our freight resilience serving to Additionally, financial our of experience have we highly includes which provide needs knowhow unique embedded and distinct advantages in operational our help and specialized business, establish This deep equipment customers and in the of support

in Moving quarter. stemming XX% to from quarter to last reflected in Slide the was rates versus more weaker detail our volumes mile XX, flatbed in This the which decreased mile, weakness. segment and $X.XX the in results the decline second we $X.XX per quarter. flatbed rate per to million, declined for driven by year’s macroeconomic Flatbed second broader the than $XXX.X X% freight revenue

across which adjusted significant top have improvement improvement segment by line X% However, million, pressure, integrations of EBITDA plans despite compared cost the prior us business results This efficiency the year in plans, quarter. results driven our have profitability enhanced our Those and $XX.X of out ratio ago adjusted macro-related compared operational of $XX.X itself and was points, helped has basis to the million grew driven operations. to operating the as points, by XX.X% this rates. basis more improved improving flatbed XX.X%, our improved business year. in segment than operating efficiency now to begun The XXX counteract volumes of XXX with both ratio clearly on the when prior pressure manifest operational and of results

well commensurate team to While teamwork far, members we amount a realized business recognize achieve we is are our upside proud and as of it. collaboration our additional as still required there the a in progress of thus significant of amount have all

further through our and our to We towards and productivity II improvements Phase plans, discipline of will demonstrating and of results continue to work greater operations financial across us our and help cost drive will efficiency which completion cost continued improvement operational assets.

cash our free sheet balance metrics and as turning Now Slide detailed XX. flow to on

XX, As cash $XXX.X Daseke decreased in remains million the to liquidity had million borrowing of million, $XXX.X available June capacity revolver, of debt on of which million. still and Net inclusive by $XXX the $XXX.X undrawn. year-over-year

$XX financed of put cap our cash of The operating year. with has a for $XX.X of of three half CapEx Improving flow and this slide returns well, cash agreements, strong understand we as our in times, CapEx on flows first equipment demonstrating at million, year, this by below in $XXX.X adjusted through cash leverage of into CapEx leaving million. defined right our the overhauled net activities Chris leverage, was in cash itself of as have first This targeted our of financed XXXX. proceeds help Our net flow side four the million focal is with half was debt well debt from cost our metrics. point or leases our through goal million. EBITDA $XX.X first and was sale as after Cash CapEx resulted operations the you eliminations operating on the and is transformation. and The Through to as $XX.X been you times in income the totaled a generation converting operating well was million. half free as cash key the provided cash chart $XX.X to covenant. the alluded emphasis million free

impact the goals deleveraging our – able the to income headwinds towards broader-based the eliminated undertaken uncertainty. year as external we progress over of op improvement and face the make economic last macro in have been toward the has our of significant income fact, economic and In weaker we’ve work environment transformational

last CapEx we million leave this XXXX. continue year fiscal in somewhere Before like guide provided the for reiterate as to page, I’d quarter between expect million we we come $XX to $XX to to it

first strong asset our impact flow to the XX, including all has cash continuing level, to in from while an year-over-year of remain $XXX health. our more now quarter year million path, see critical clear improving last Slide close than net since down sheet, XX% generation reduction than has debt proceeds after the our to actually, sheet that generate our we’re more transformational the on operating to operating deleveraging significant results we Turning which improvement in balance driven flow divestitures. doubled Enhanced here quarter the had you will cash cash that grew takeaway second on versus balance, is has The work and committed while second continuing of our as by evidenced the our maintaining, balance quarter.

where I’ll and will So hand with over he priorities call Chris, our now that, second for to half of the detail back the the year. outlook

I’ll you, with Thank Jason. second XX half conclude XXXX our on Slide priorities.

laser-focused we the maintaining first as just did the our of we half year. look forward, we’re momentum, on As in

the and to to our of the pushes continue monitor will will and the realities adjust pandemic. We see business economy, clearly from pulls which

of We’ll excellence to plan. internally people, the across we as We to focus of improvement our the Phase our complete operations above all else. our customers, prioritize and our also continue will communities additional steps II operational remaining driving on organization of continue safety

business which generation, our drive strength efforts allow our focus delever continue next over to efficiently to continue will our few operating flow to and sheet the us build positive we’ll financial cash of effectively and years. balance Next, to

CapEx Aveda use partially we operational that be the third some support final to do related As steps should cash the we momentum. offset to expect and in quarter projected. continued we discussed, business to by But the for of divestiture the

our over and niche remarks, you. Lastly, look stronger This ahead we’ll emerge growth our that all I’m journey have from our We questions. market back sharing concludes invest it. culture, excited of for in leader to our our and to the prepared of crisis widely with to of will strong call platform turn to you set this forward team, opportunities a as a

line [Operator first of Seidl Your Jason Instructions] the from Cowen. comes question from

is Your open. line

hey a your to I of operating Hey, team. right? longer first ahead, term, think, You’re the during everyone’s operator. you, of that’s bit, expectations Thank Chris, wanted cost I in on difficult Jason, sort an takeouts. hey focus little And environment. extremely question the

at been complex Some really around of pandemic one would how look sort push years? of lower? quarter that are I’m the your longer sort next that to what let’s your that the for OR given term, look argue that difficult how demand most sort goals say, ability And this even the, three wondering of might we of should swung at. company’s you have always

got it quarter. continue opportunity we we that. clearly yes, and And asset, it. think kind And we’ve potential, it and our to do. achieve pull and impatient into over XX% brokerage. challenging left there, the on But in of toward plans months next think I business the Jason. look executed is beyond, see frame execute. improve And, lot made model Thanks great And mix of maybe – that. that toward was us where underlying to, leverage can the our the Appreciate the future a again, but to the about to we as was see in we we is date. that progress to to end, when that XXXX a I and term, longer we for we down evident as number of do We’ve and additional we’re type that put asset-light XX We’ve and XX% do potential years. several today And work of up work

potential of too. toward I working we’re to the that’s we important be model note going business, see think of mix to that that end. in certainly But and our long-term for and So current type our

with complex on mix companies maintenance the you out CapEx term look current your How of at given Okay, after color. longer should Jason, have? that’s we the Aveda XQ. going the great side that capital sort of of forward

Yes.

think it’s I I So, important. mean,

touch comment to to was one to going on just add Just on there. Chris’ real quick, I thing

important that it’s quarter understand at think this I largely is and demonstrates in I short-term. this to least Daseke specifically, a self-help year, story, the think

a a you levers we not you pull, kind that think gigantic of lot make And lost on progress. to in recovery us need that is macroeconomic for have We definitely don’t continue that to I a there’s meat bone towards still XX% Getting for on and over and going CapEx. that OR drive to to that lot think the But your back more question run. us, to second can we’re your of that continue we highlighted I about comments. as opening long execute

when we we our we’re look make think sure I at investing. business, continually want that to

it’s bringing We’re down. Daseke the assets. terms average think to a that composition age too, I of different is And important little the understand of in

these specialized assets Some longer have of lives.

cycles CapEx is so for different. And investment those bit a little the

think I kind – front. full this we John, looking think replacement But to replacement of at probably CapEx I of – built to our of resident plans. say, our And safe basis. the haven’t to I’m the outset of out range, CapEx on we kind it’s we a saying this were in kind on table XX% CapEx down that who’s expert XX% year,

as I have. any that’s good he I’ll to think you color John year model going and point next it probably turn to forward. add that But out over might starting a

point. Jason’s to Yes,

One the million. two Jason of depreciation which has talked guide, the pre-COVID $XX about, cumulative just was weeks’

gives million $XX on maintenance the million you CapEx. range a of $XXX kind kind to So of

vastly are And regular think player. we how should drive good. assets about different age, just a Pretty than your comments, Jason, in Okay. fleet your

Daseke? what are would we to average call you think optimal How close So age about age? that we how an for should

the Great alluded to. last of some just is been question. healthy internal that few I number, that over this to debates deceptive, We’ve X.X having getting a topic pretty will weeks little actually the I about kind say because back point that,

And get so so more looking maybe all that there’s to into at bifurcating working bit our of visibility kind you. of and classes the transparency operating more asset companies we’re for with little a granularity

to that we’ll kind kind you specialized can So over-the-road these sometimes eight seven, average. some a six, I see our years weighted of look core have would when average had you, hold of live. or trucks, at overall of our still regional on age or that to assets room of versus some stuff we kind bit what’s of little that on tell you of our for local longer go

of we get want mix kind to traditional probably it’s that a specialized business. the going depend closer that But number on I little kind low of that flatbed to of three, think see versus Xs. again, to the

So bit on that we place to go to coming have look plans that. kind room driving to a little in level you down. opco and from the quarters, little get bit invest. we’ve to that have the we’re got granularity here, little a committed of front, that bit more more And over And continuing bifurcating as we you we’ll at a so up, on of for guys, visibility keep

you and areas of that this answer. in was are on info. think to terms of after many give the about the That end coming you I the bone, in Chris, see us the can little Jason, helps. you in forward in that’s pulls terms anybody talked of great of you be it to color. the expectations half a some demand? over economy else Last I in markets second and your more about more back talking quarter. info and going us turn question, the always is And I of your look the to the if you giving And that pushes guys near-term. more year wondering meat I’ll for

that very forecast the has future be would this expecting But I strong. of to been continues – to strong. as we comments – it’s terms as in challenging as environment. And are we – in we to energy in be well. alluded lumber the question now that’s a earlier, Yes, segment our right continue in Wind to strong though, the

bit. have has little back and Some bit, actually little areas a that actually a come back bounced defense

run that hard cooked upside As but aerospace, as rate, of we’re in there much going soon, on anytime somewhat. But current early, shutdowns that it’s areas optimistic area, other see that some has rebounded pretty in COVID any hit some the metals. fully to were our is like we’re not

Beyond to they exact which, verticals so But really the way, push diversification not cycle correlate in that, hard and a of the but and with business pulls. of any end clarity it’s typical much don’t to that some don’t necessarily many this there’s the cycle. with resilience model across back is and again, typical see – typical – your with our go

if I anything on add So you you would that. else to that, Jason, don’t know had

it’s been for Yes, it’s the industry end of a only highlighting Chris such would kind that a market exposure, but does of reiterate mean, the the really really little kind a long have in one cycles, because of of I you I point time, it oftentimes do And actually that’s provides last kind the model had bit is time the more – It’s just diversified made. in and of me. that Daseke new stability. ebbs and for that I’ve benefits is nice flows thing portfolio and counterbalance. first I’ve it a that different unique phenomenon it

retail on the to heavy insulated insulated some companies I don’t pulling levers we the So extreme say of kind other somewhat want can, focus from, of continue we but from as exposed kind that to. of we’re to the are we’re volatility

Be I always. as safe And That’s the great there. guys. color, appreciate out time

to you, Same Jason.

Jason. Thanks,

from next Craig-Hallum comes the Sigdahl Ryan question from of line Your Capital.

Your open. line is

morning, and and the guys operational improvements Good quarter. congrats on the

Thanks, Ryan. morning. Good

those rates quarter. specifically to How mentioned you trends volume? First, start, freight improved and July, have in throughout I trended want both the

a of more movement. been nor neither really down. has sideways July up It’s Yes.

went And drop and we as had how plateau that so up settled a in the down reached of in progressed. quick quarter it’s it gradually kind

reached and we’ve sideways. a plateau kind it’s just Now of moving

are the of we’re look in close I segments. QX, you’ll if in you some back and and forward line our But the in actually, looking see we’re revenue. As very, pushes pulls year, think, at very last there QX again, different quarter, top terms

Our is this to expectation QX for similar QX.

Although our driving back self-help actions. story going we’re to here to our ability, is continue

right a the as see we should is despite completing what We’re see of and the maybe forward, to we’re Aveda moving now so line flat all, performance revenue. improved we continue on more

for reasonable then continue of to it you Is of from QX an kind improve? about OR self-help. kind to that QX talked sequentially to that perspective And

see – we see to talking expect when would improve. that about should continuing we XX.X% you’re to yes, say, would that OR I [indiscernible]

peak have are directly seeing recovered your segments? kind owned asset-light work Great. versus and their asset And in lows versus pandemic as owned between desire Have shift off seen what outsourcing? with brokerage April, fleets to a you related volumes then of more customers you

value and position, our don’t asset looking all – actually in that diversified. player general, vary of brokerage really position, perspective, It might on continue our see break future. that big quarter. we asset we’re margins well so what marketplace, past maybe said, with you asset-based although a grow we with the in end our and it say, we’re But our our in brokerage separately, towards with But see some going in see a this shift our an of space, customers of we on to we – leverage carriers decline to the as some some our was that But we an of a – in from dynamic ability didn’t than or the in in and guess, our we interact lesser that revenue during did we But our being both actually I’d see that those declines our I expertise equipment does to brokerage. improvement see And asset actually lower out the our in depends, as It there. markets really during necessarily generate terms to quarter. business. we’re side on confidence

Yes.

all Ryan, thing, or truck. to is that got I think the the I only brakes would the on to day, that at the move of Jason, the end add

terms want have that of in make there’s about They and been sure these intact people us who tightened, of the those see relationship shippers, to – the that assets, own concerned some they when get capacity, in the of going they’re you’re day things and to the to of are because look bigger the towards the going and to brokers, who end that own are assets. So those trucks go, have come at who going keeping guys see you due concerns and of when time, a capacity about be insurance waters these rates fuel into under becoming long a right? going stability when or brokers. of and financial a becomes got guys to regulatory up using But getting And firming they’re for going those dipping start better maybe their industry things a up headwind. and there’s out of headwind, and this cycles, toe to companies creeping lot pressures there’s you’ve starts there,

got relationships big industry nurture not who’ve You’ve of been They’re asset a out a customers, sure amazing different They’ve they’re make dumb. out those relationships in we’ve keep they’re and continuing things lots going time they with shippers. to that too of got there there relationships. the market, those good these those and some going of those may intact. see for some operators really this long And to got foster drive and lot to some out players, people of key you’re

I the you’ve And looked even in think you – that that to maybe final key. the add got past a to that kind a one is We’ve key, has point broker get that go that on keeper. about of at is to asset, when actually – got the got the

when Now because there. you’ve that’s we you got key many the replicated like to it’s knowhow replicate. trailers almost these not in hard specialized, and cases, And out specialized golden a are, equipment and have you’re

that that specialized the someone oftentimes So guys needs we be out behind you’d valued very and asset of because be backseat taken need they – be be to among to would, maybe – customer, shipper taken the that, asset. last our

luck. guys. That’s over Good turn great, to I’ll someone it else. Thanks.

Thanks, Ryan.

Thanks, Ryan.

Gibas next from Greg Securities. Northland comes the from Your question of line

line is Your sir. open,

nice in morning, Thanks the the to the quarter, very Good see. guys. and for taking on congrats improvement questions

Good morning.

could how I month-to-month bit a mentioned which maybe does all, months? was of the color provide little but degree point, volumes improved quarter? just within of next the guess, the compare on you that low the the to Obviously, you April freight to First that two

in incremental speaking. small relatively sequential improvements, was it this Yes,

it but dramatic, improvements. incremental anything So small wasn’t

Yes.

we be add really the to think that only thing it is, I to would were expecting bad. I

So going up for held QX us here through the this was where right? been kind to be model market see all think to three of that was of thinking again, I months, the shocked of how downturn. I’ve bottom I Daseke only resilient and out dropped

pleasantly executed July been But business actions revenue holiday. of at we’ve kind something we a half in don’t a it the didn’t only its the has back Everyone this would get the seeing But mid-quarter has And weekend, overall, of held So that actually Memorial you kind to how of up, in on necessitate back it. April five in the straight well was got started really, – normalize trend that for here right? And little saw huge six improved see we X of pick of that there in industry that right? face the team the previous you’ve way how back. that, it me week. I this weeks I off, is we gigantic each mean, drop June speaks. Day think there. July. more that But plateaued It update, drop-off into importantly, wrong. that and mean, when kind our And And surprised the improvement. I the talked was the exception was was holiday, So kind six weeks of had well of about with in bit cost sequentially in of climb challenge.

operating for corporate They in they couple didn’t end guidance We the did markets cost. of an think They’ve a that And see have anything. actually were [indiscernible] that’s the leaders, from ran increases immediately immediate other we and fact, or been businesses. they that and yes, I just wait past. had company some there They where those cut in in volumes. running saw businesses these acted as

backed little because model, a bit The one hard it. it’s And we’re so to seeing business any that’s pinpoint thing of evolving.

It I about I about. for just some have you when was kind were weird was was these it the say, exposure of I the numbers all-in really Chris why numbers. talking takes was me. puts and And because like that’s got that Yes, talking

have was into it this you actually that as surprising much pandemic. how to so volatility And much would that wasn’t as see going there expected

how duty diversified Got does I it. a lot trended. And thanks the it that on guess. Yeah. color end the That That’s markets, the for in of quarter. help

landscape? changed you the And just the improvement the I health expectations half could you provide – a we of the on but talked a have bit Second bit be could quarter? just guess, capacity one could provide in if since how maybe guess, from color last second competitive for if you’ve this which the capacity your would little tighten, I year? – degree And to general about me, little the of specialized more already,

Yes.

the it’s demand a going is think – time. the I going of over to reflection to capacity curve be

of navigate there’s it. don’t incremental are that we a depth – this resilience were, in of hand, in position we at the that downturn there communicated thing last breadth one second with is, say strength on see this reiterate to which to not cash think downturn we’re I’d again despite would I come, – peers there of that we’ve or a and in the quarter, we quarter out will or got if be I the type a navigate a if position that may we through there point. position But we’re strength. of

$XX do all the million, carriers And a lot there – there. are $XX $XX this our of are situation. many in be our have that smaller there, out million a are primary of which great they to the space, out right? some out I competitors, That’s there, which operators think are through million, type ability but resilient of companies

we’re have will to XX%. perspective. driver is, We that helps, get our of are there’re actually get exit. if my sustainable, we of then some not carriers that’s But between around help, also seeing through And on in it. the I of see governmental them And some finished a view said, turnover. are outperform folks demand. tightening like large We of significantly think, some couple might cases, through to of I some All that And capacity. a fine. helping right going think those to typically might turnover the it And total that maybe some from quarter a turnover we’re itself some ride in for-hire decreased at position these

year. the this previous well. from was Jason, experience And an quarter think, over your improvement I as

a about QX of at year. XX% were we think last I

this about We’re quarter. XX% down to for

seeing numbers we’re turnover great too. an to ability lower we’re going drivers – get So and as forward,

on add it. to to anything So

You of even probably I tightening year, so fuzzy happens macro little half be said balls bit depending to all there’s mean, more a some the in going the XXXX, environment. back do capacity it our into what now. perfectly. think and I of are the in in crystal on right

perspective, we’ve there’s – – lot are Chris’ got point, we’re a of make for to then uncertainty And So starts making possibilities. coming but bit little liquidity then aggressive. position focus there, be sense. if we capacity a we’re sure cost be – And our preparing opportunistic internal we’re that from a of And from a we’ll And to perspective. out self-help we’ll spectrum more up on out, makes if earlier not, continue it we’ll where shoring a our opportunities.

would those just you about what good there be, the million terms but color in disposition That’s the already Sure. in Last what’s we think ask share there. actually process? retention, for was from are driver realized Aveda I to I proceeds, given too And that you it. way about it appreciate going a so – guess, me was think one I net disposition the say $XX I of of the much, would can’t stage, guess, know I assets. you

Yes.

down We’re the path. well

to going goal As our this the business was quarter. third is the be and end from always by completely And you we to team said, our over-deliver. we told goal be that as management a exited of under-promise to

and I confident and that’s reiterated got said that quarter, think are case. before very here, Chris that and the even that to going be the team last I we we

that is inning? think Do you ninth the

right. in ninth, I the top we’re Yes, would of say the

we’re not innings So extra on – into this. going

path. So, well yes, that down we’re

with in of the the on, to may We just I got business. remarks, of do have, exiting we’ve kind there. assets associated touched the sitting $X million prepared $X million have remaining his Chris of final roughly Chris some think costs as mentioned

million of to be it out – in when take in expect assets remaining we a that. expect the We little terminations expect and to short the very versus million, the we things rid lead order. these severance $X be net and for number But, of $XX here like what cash bit of drag largely of yes, you to the getting that’s a some business this

very much. Thanks Great.

Thanks, Greg.

next Ross the [Operator Stifel. Instructions] from Your line comes from David of question

Your sir. line open, is

Hey, This the Matt is morning. on good Thanks Dave. for taking question. guys, for

morning. good Matt, Hey

respect be quick, debt the guys financed? of great flow think over have liquidity a about the maintenance impressive balance the ultimately cash least. to with requirements and the job the improving to of the investment done of longer term? is CapEx business. free we you about Yes, how the I’m And curious, think balance percentage say color real sort the how that sheet should that the for might And to of thanks

I that the think an about I’ll the of balance going and opportunity market just here. as your about we’re to capital sheet the also future into I’ll question, – thinking but answer a conversation use I’ll it kind overhaul have broader

had double listen, the straight a lot rates afforded this were was healthy we going regard purchasing, there us. versus financing right, with to of that dip. with was overall to be to of whether was do, year, to uncertainty, And a two, there did some to we great what amount going One, economy financing. So regard a

accumulating made really businesses flow cash our strong of so lot generating cash from And free a sense.

And of so goal. kind was that our

be to what’s Now on COVID, this a a don’t we’re have election? to or there what’s where an perfect got wave, Is infrastructure is to be clarity not. in going going going happen still sitting we bill position happen. to going the with We’ve there second

so And uncertainty there. some still there’s around

in and John on as we’re to been But opportunistic. going position with opportunities. we’re And lots been And we lot kind of – And a really to right? to want relationships done year, too. understand I have of where that’s anything, a we’ve it think and do way something that be we of important and makes when to that have doors. a because be question, conversations to It for to it’s last so I to it where I provide do And doors think we’re that it. And way I we the think Michell don’t the the we’ll might capital do a sense proceed we’re does we going work such we But over make previous it’s us continues having there what’s markets. and strategic that’s response in it lot with of in of opens flexibility. people also, out the a open because about to there alluded sure cautiously. people in going

see going about to to response options is of debt in really we’re if so the your out going going pros we’ve giving to you debt cost question to be $XXX to outweigh there’s be think And at cash we’ll us there, don’t sit be from much the just I million, those response, But on right. financing, same consider $XXX is opportunistic, cash, much good here a and when $XXX the how how If holding got million, and sit you’re of financing financing. to direct of accumulate cash debt. million – especially going optionality on it, time, right,

doesn’t So that make either. sense

decision guide the for for the that the right? the and a there. short thinking Whatever let lenders us, the it we’re your about going math to the we question, the we’re bit for hopefully but want we’re understand – well. to little helps answer So all options right we’re ultimately right to but going as optionality, make preserve shareholders, to make – it, of employees long are out how And it’s evaluating you how also a

Congrats Makes progress. on the Certainly. lot a sense. Yes. of

Thanks, Matt.

Q&A to remarks. will the closing call session. concludes for back Chris I now CEO, over turn Mr. Easter, That the

thrive know August, including a part if built exercise We we out pull we and – glass outbreak fleets, means which today’s now. the the completely every improved remain We solid long-term and price cash take reexamine we’re we to Thank Thanks these for we a great advantage for of day. look The and we is what playbook, the responses your toolkit downside and care you, bottom sorry, We you COVID-XX in resulting both break pull. scenarios believe the reduced tomorrow’s levers cash to We had support on you. should We Daseke. joining Have path from business what of to forward prioritized navigate we to which to using Thank could all figure continued should quarter. have could next top do everyone. crisis Katie. us – opportunities. flow and and to And talking for today this a what our should and our needed. last focused and playbook our had again we challenges balances. and and earnings, tools of