Daseke (DSKE) 3 May 222022 Q1 Earnings call transcript

Good morning, everyone, and thank you for participating in today’s conference call to discuss Daseke’s financial results for the first quarter ended March 31, 2022 as well as Daseke’s outlook. With us today are Jonathan Shepko, CEO and Board member; Jason Bates, EVP and CFO; and Traci Graham, VP of Finance and Investor Relations. After their prepared remarks, the management team will take your questions.

As a reminder, you may now download a 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.

company’s I Traci like and forward-looking Graham, who read further, call turn Investor statements go that Reform will to statement Act of over VP the Securities within we the would cautions the to now the Relations, provide meaning Before important Harbor Private regarding Litigation Safe of XXXX. Finance of ahead. go please Traci,

within presentation Safe to meaning statements Thanks, for our including information, non-GAAP X our Private turn the XXXX. Litigation the statements. outlook, forward-looking of Slide Act Harbor Mag. contains statements. Securities Today’s Please review a and our of guidance forward-looking financial of Reform Projected

for risks whether or of projections to to other to subject assumptions or and of Forward-looking to and We information, our statements, events affect business statements materially that uncertainties securities on no Daseke’s risks respect encourage on after reliance occurring except the obligation cause otherwise, can the result expectations filings may forward-looking undertake laws. that any our forward-looking that discussion place differ performance, projections. and estimates, under with strategies, to based undue as to revenues, I aspects with actual you and Exchange and to applicable of not the reflect business as revise from our events Securities our a required circumstances today Commission prospects a results and new include are statements. are those could future current earnings, read be management’s

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

In financial speak start provide by over and we I Bates, up the the questions. review your and the our as With briefly Jason Jonathan before the we wrap our Jonathan for terms we call hand a CEO, which Shepko. Shepko, then to of line call will business review to quarter today, a our closing call key outlook, will we execute are with strategic who structure progress our will point, that, Jonathan the remarks XXXX over about will the operations at Daseke’s of few turning making Daseke’s CFO, comments against will of our open Jonathan? Mr. priorities.

Thank Good morning, you, Traci. everyone.

the of begin a performance, continuing from quarter shareholders. key first Daseke of me X. quarter expanding our to highlight delivered we’ll against few XXXX. progress on Well, for our further ongoing operational returns transformation another financial while our and make strong Let Slide takeaways of

attractive dynamic shareholders this and continued our successfully for top-line growth our have to This earnings play top-line service. substantial execute this teams through a to our converting and demand, with demand supply, end of freight continued across most helping support balance theme has While the the we drive persistent across rates to landscape we sustain the freight to strong industrial markets of continues operationally, and to quarter. in revenue the

rate improvements. markets our strong to remain As continuing first mentioned, and as sequential both we demand quarter, seasonal our normal across key most posted year-over-year end in I of defy trends

surged. capture this XXXX, Defense the the we the shifted quarter the with work to assets specialized demand of as segment. first strengthening and with to support steel growth of continue we while performance, flatbed to providing and potential. portfolio of markets see freight and construction, in diversified rate for but our glass bolstered also redeploy Department buttress manufacturing driving end high is Both higher assets yielded cargo do In markets incremental only one balance how supply opportunistically assets We margin security an yet to for us the company not environment. in order capture, opportunity our pockets in of specialized continues current strategically demand, niche demand freight This of example another to our highly demand

and remains to equipment industry, only within our face securing supply The also to crosscurrents challenges global equipment picture. in the chain constraints further that challenged. We additional have QX, added availability the as driver due capacity complicate supply continue shortages

Revenues EBITDA increase the share. offering. despite our revenue improving this a was brokerage operational side a the versus second service and power quarters improvement creating first our and facing year-over-year, our correction this for earnings premium into our quarter this number year’s assets, metrics, particularly compared volumes the execution we with of that expectations this share meaningful foreseeable per our significant million rates year-over-year, continuously first third improvement $X.XX a end said, new anticipate coupled truly of adjusted we environments. the that driving opportunities garner the rates excess when As In $XX.X strong quarter, with while to flow enter strong on earnings model, which across also hold XX.X% With last to into and unique adjusted million, future, quarters. converted outperformance a of growth market as on of diluted such meaningful quarter about of capturing year-over-year $X.XX XX.X% through timely emphasis equation, seasonally was Daseke service, all a to of per we demand markets places profitability $XXX without execution comps demonstrate will company

for more That our call several year existing existing additional our to on and pleased we outlook, during operations for the integrate during that horizon smaller strategic customers mandate, few the priorities this acquisition side segment. opportunity within providing barriers markets, continue were expands footprint our we efforts cargo to high been and announce as for Before M&A. low like The victory target target tuck-ins, existing take company on and geographic exemplifies our The identified quarter, specialized niche, our performance cyclical, acquisition turning operations modest as a to completed an completion decisively our entry, full even this detail first security on while based a tuck-in to our the of the acquisition. financial This strategies the and industrial defensible around over due verticals. with end be accretive to quarter. immediately acquisition while to provide our with is Jason waste strong diligence expand the also has I’d things services internal chemicals and of synergies to proclaim that to this high commercial risk counter I’m moments M&A and first platform. hazardous a the with specialty our within carry markets our will complement to first in

earnings And expect expansion. as XXXX, performance. integrated We and with will quarter and growth the opportunities diligently multiple M&A our multiple first rate drive call implied to committed of the our potential we to identifying improve roughly of now I X.X acquisition to as the Bates multiple of implied remain accretive logical that, profiles. XXXX to post to We X.X Jason? focused a times. about be to to over turn fully means in financial With a Jason free on line cash flow times review supplement catalyst run remain sight with a to

Thank and everyone. you, Jonathan, morning, good

to Daseke’s company right outlined, and effectively execute Jonathan model the market the end various industrial-facing As our of diversified has of environments. enabled asset portfolio markets strategic flexing across

our and demonstrated our have customers network We and support our freight traditional consistently rates ability strategically assets strong our owner-operator seasonality trends. to capture outperform to deploy

business to pleased top driven results another positive and to both are line. efforts initiatives yet of financial and quarter We report bottom have our transformative the

across to As we’ve first demand the over manufacturing our quarter, sustained markets. continue end we in quarters, construction past and the see seen strengthening several

market limited the especially capacity has our this experienced within virtually quarter, – when end ongoing heightened markets rates led steady industry serve, across of the a we to demand with have we flatbed in due geopolitical addition, we’ve the able experienced Jonathan mentioned. business. we demand strong to the in of today, which coupled all high-security as all freight cargo Candidly, previously experience been matters, to in the our In

advantageous highest margins the for to first to customer We needs exceeds and into our with for deploy continue strategically yield Please X review Slide of those fleet with brokerage meet the capacity. owned results me leveraging owner-operator assets most markets strong end our freight a the will while will turn rates where demand quarter. consolidated which our to high-level capabilities their and

$XXX of million on traditional up the delivered year’s shown left GAAP last slide, In in first of the Daseke revenues quarter, $XXX.X half with have we revenues of measures compared measures XX.X% non-GAAP our table our On quarter. right. the the the to in million,

comes pressures, continue demand were quarter. more As consolidated We both XXXX. flatbed improvements diluted we financial a million mentioned, areas grew where quarter adjusted value, inflationary These to comps of combined EBITDA both At XX.X% from year’s strong the segment by results of prior strength the capture year-over-year. and provide per which million first headwinds. level, rates, in of growth our of the our increases in enabled the to most top-line were generate This substantial versus Adjusted share revenues delivered compared or capacity continue and operating $XX.X $XX.X delays which up year-over-year our of strong consolidated which despite results freight as tough to strong adjusted and offset last to EBITDA specialized quarter, year’s income segments. $XX.X $XX.X than XX.X% rates of quarter. us the represented reflect equipment first continued needed rate to function improvements freight in net million impressive in million capabilities the insurance the $X.XX of

to briefly. like level discuss moving to labor the segment I’d results, Before our market

driver average, are While rates inflationary retention than around recruitment retention. to and not higher driver Daseke immune does headwinds the industry we exhibit

point of have as their needs as We continue to quality to including of many made and prioritize of life address a our compensation. possible, drivers the

driving year, hedged has the discussed. targeted broader backdrop demand Over rate to have we with It market. previously various increases our noteworthy wage and the line market past been is inflation strong in the implemented by professionals that pay somewhat

they are closely to of monitor and labor professionals, to critical remain success. to recognizing driving continue the that market of the prioritization our each committed our will We

with present the outsourced segment Specialized like Corporate $X.X we’ve coming results. market which million – increases to Lastly, versus and exposure a factors strengthening Strong experienced by include million revenues segment lower construction, our demand Key by corporate high a market. lagged again rates broader and detailed in cargo has glass. helped Slide volumes level, $XX.X across up the salary of our approach. $XXX.X in at muted last keeping were our years of compared to view On quarter. specialized the A operating end sorry, the up also an improvement results X, our with once benefit corporate than we diverse starting the testament XX.X% were including on end million, year-over-year. further expenses year, contributing diverse briefly prior more also fees, lower that to offset I’d see offset wind quarter expenses. and Notably, end in overhead the in the to aerospace, security professional market verticals, decreased, market partially and in portfolio touch recent began years. driven numerous couple

beginning demand were contracts renegotiated successfully is aerospace for volumes and to As the return.

mile prior increasing with further the XX specialized specialized supported majority discussed. market This include was period. Our backdrop in previously basis as Key year’s notable by points a contributing strength EBITDA for adjusted margins a and end versus segments per our of strong markets, year-over-year factors per the increased XX.X%, rate which the end last $XX,XXX has by from This of to $X.XX, in tractor increased to in the first first quarter. expansion contributing been XX% consistent our Revenue to the markets, portfolio meaningfully also of segment rate year’s $XX,XXX quarter – across compared from $X.XX XXXX. $XX,XXX of growth. improved

quarter, strong per tractor, in we X, available the segment $XX from another marking revenue of increase verticals. demand profitable $XX,XXX the segment’s helping in we operational increases capture million which was the basis compared in steel attractive previous the prior to asset our metric. of first at period, and market our result in offset manufacturing realized a further same right operating of with the has levels, XX.X%, $XXX.X million, year’s our last results per and our Notably, the We rate model, the year’s realized pressures. our in this delivered mile The segment flatbed the capture $XX.X in point rate our On growth are and construction flatbed displayed revenue Once each driving a the performance. flatbed XX.X% industries freight adjusted of results fourth growing model verticals initiatives tightness improvement our which cost paired as demand environment prior Lastly, agriculture flatbed EBITDA for to increased million XXX $XX,XXX in versus ratio collection the in quarter $XXX.X ongoing with rates period end generated improving first and million the year was boom our year-over-year quarter. increase mile the segment. grew we outlined this rates by growth adjusted quarter again, pleased with Leveraging portfolio quarter. quarter. the for quarter in across increased XX.X% the in of maximize quarter In in and of the revenue of in flatbed capacity kept XX% demand Slide of in segment This per year. from ability

Our adjusted adjusted at year’s the operating in points ratio segment’s ratio basis improved versus flat were to prior The with operating EBITDA to margins XX.X% also XX.X% XX.X% quarter. improving year-over-year, the coming XX.X%. essentially XXX in

Daseke At and the the reference optimization to business the You’ve in flatbed recent that the quarters of when heard opportunity flatbed you’ll to markets Daseke’s markets. The capacity-constrained see a on freight how asset flatbed model market margins. bottom rate us capture rates benchmark. asset to and to into and strong segment composition compared its our strategic positions the of benefits X, us of in and page strength play effectively deployment specialized most chart detailing unique Slide realized outperform benchmark rates the afford fleet

capture us network business assets, through to model which an mix our to to oftentimes business the brokerage combination market. owner-operator broader outperformance utilize relative rate optimized leads to our of Our growing enables and rate shifts, company-owned maximize Daseke’s

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what when believe the or as execution, defend with market remain progresses. as expand if fully dynamic, a combined we However, unique provides most the fluctuate we rate this this and initiatives is will ability outperformance this encouraged not by We we rates market, asset thoughtful to as as means against transformation margins right in strongly this ways cycles execute Daseke an that structural advantage aberration, carry for dynamic to look we our time ease.

sale In Turning in $X.X financed $X.X activities. discuss and $XX.X collected million in finance moment flow to Slide with from leases quarter, in of or the of equipment resulted X. I’ll debt net $XX.X generation in This CapEx was take bringing million totaled Cash a cash the proceeds first we million. generated of to from operating have our cash cash free cash the million, CapEx flow quarter. million. $XX.X capital $XX.X of after performance. Daseke million,

we strong sheet, of cash $XXX our to cash our free and over availability balance, the sources undrawn with our significant million nature supported capital balance maintain In model of on credit our and revolving by facility. terms continue liquidity flowing of healthy

purchases. side note from left the budget, that that of into while stands and we $XXX deployed specifically page, have as the been cash new earmarked equipment nearly have of cash we cash our reported equivalents $XX.X million, would otherwise at that capital million On

to approach. perspective, maintain tightness we ongoing of work our allocation balanced are and capital the delayed a new for Given showing net of down to cash a CapEx the also we the backlog, From balance vehicles support to the any organic evaluate value-based will figure. inability potential supply of planning the OEMs the and and all component the have We markets to of focus. opportunities in within our which runway opportunities we position transformation high-impact operational to where and strategic leadership with see of enhance significant invest specialized flatbed the

touch is little prioritize returns call. will value a in that create the And provide risk-adjusted our opportunities attractive this to going long-term are Jonathan likely We to most and shareholders. sustained for later on

XXXX. see are I we our recession, conclude to X. various Slide demand full of freight pending to for freight rate continuing the reports with and a Looking Despite year environments. outlook in will strength the of

growth strength despite business strength in we’ve to of macro our end model play. and remain growth strong our This the market continued continued and XXXX XXXX. reiterating with XX% revenue and and and pressures end and been overcome sustain to with benefits pockets when industrial pressures open We in ability the seen the of positive These initiatives. in have from fiscal to company-specific by customers, the inflationary to disruption in outlook. dynamics which our initiatives EBITDA macroeconomic our confident Given XXXX our incremental achieve to year having market for of demand, in in we is are in QX continued fiscal the we have resilience EBITDA We far inflationary supported comfortable revenue our market adjusted to dialogue adjusted transformation greater helping X% cost X% are thus at operational outlook confident compared rates, X% of combined environment. remain

depending decision monitor on million $XX will on for but receiving economic between of expected how choose allocation proceeds to result we remain the to continue equipment Cash could to we to our a to guidance is the the make capital reducing As less million front. flex as a of new net or in the million and rates and range a million, much in $XX $XXX CapEx that articulated CapEx up interest full closely $XXX down we delays finance range year. are we previously, right

not we points data unique demand driver brokered and availability, end industry disruptions, all As insurance these durable entry to company, about to other continue as markets, will year, diverse structural To various we as a well chain opportunities rate the benefit while flex potential overcome remainder and owner we as fuel We the between us. supply industrial do look headwinds inflationary of a recap, headwinds monitor lie ability have including challenges. forward to that Daseke, maintenance, for by to strong to aforementioned the barriers assets will believe the high well ahead supported we headwinds, environment, optimistic a as operator our remain environment.

key started strengthen we efficiency. continue operational enhance implement initiatives and Additionally, our further our to to to transformational

focus the for trajectory inorganic of see spite all As external our environment, we In structural continue through well. strongest for well that evaluating enhancements, both is expectations. technological and believe prepared and business capital, evaluate a in self-help will both growth variety internal the while a the to carefully of uncertainties as investments our use to driving a with XXXX we goal organic and we growth opportunities on today’s macro opportunities various assist us in in continuing outperform of of and Daseke possesses strategic

and we dedicated returning will strategically focused we progress shareholders. XXXX, on to As through excellence value operational remain our

So over to few with call back Jonathan? a to words. that, hand I’ll Jonathan offer the final

Thank you, Jason.

If referenced of we’ve new preparation in turn Slide the last you’ll now calls, a of our that wave with front On are transformational planning initiatives in early albeit please few innings. me X. at to and Daseke, underway

OpCo our highly the through primary One cross-functional of collaborative and shift operations coordinated for in mindset each from of broader disjointed establishment is of network a operations. to the objectives our siloed the plans a transformational

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second We XXXX. these in the integrations have early phase more the commenced follow to and first in of the year of half with

Let’s touch solutions. on tech-enabled briefly

have continue data make of clarity platforms. instrumental a in common these our upgrades success to strategic and will support our platform and the We transformation, made Each is focusing of on technologies across long-term lake. investments development operating accounting and our standardization, of a consistency direction, in the and providing technology TMS to

investments technology Additionally, shape into data-driven capabilities our optimize our we how will decision-making and support further initial leadership’s operations.

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will We provide on continue to the updates throughout progress year. our

figure opportunities Daseke also transformation fueling strong trajectory, to a current are that to our further growth our number of will phase, organization beyond of horizon while optimizing – other the beyond XXXX. additional ahead, there continue Looking enable a

existing new needed verticals, our our where footprint use to look market will operating value to establish a presence adjacent capturing capacity. We in capabilities bring

enhance We freight have a and solutions. our where presence, provider anchored Daseke’s meaningful of verticals continue competitive share in market to will to expand and strengths preferred we establishing refine and already our also operations capacity targeted

accretive to that spoke with complement Earlier, opportunities continue aligned existing we’ll us Next, almost opportunities our horizontally. growth our operations, one both and a to acquisition, about M&A allow target refined recent I integrate philosophy. that is perfectly vertically tuck-in

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M&A to for shareholders to We for relative continue capital. opportunities will for other evaluate long-term option as competing appreciation one creating value our

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you commits call superior an I’d our like that, effort prepared to returns continue and in With to we’ll this team across your to Our morning, all turn for leverage operator will remarks shareholders provide our these competencies conclude the our over we to that May? to cycles. questions. of for to

[Operator Instructions] Sigdahl of the line first with Your Capital. from comes question Craig-Hallum Ryan

Your open. line is

Jonathan. Jason. results Nice morning, Good progress. and

you. Thank

you. Thank

other to metrics just and give can the don’t there? it start revenue acquisition. you maybe but I on I and anymore, any the saw Curious EBITDA what believe contribution was

Yes.

basis. think I really of that adjusted the think synergy-adjusted is way, an right on to Ryan, about kind

paid for $XX $XX million, million we – at So right

$XX.X.

just for million of adjusted million $X $XX.X synergy under EBITDA.

And that, Helpful. to it? then you. revenue willing on you’re give Got

Yes.

was margin. XX% yes, – was margin about that preadjusted we Ryan, the EBITDA look, EBITDA So revenue,

much, margins core so than XX%, it. better basically business. Got Daseke much

That’s right.

Yes. Correct.

that? well on Okay. Good. conversion Presumably as flow better cash free

Absolutely.

Yes.

Curious, seems there It high-quality a okay. add like Great. value as nice bolt-on with strategic well.

EBITDA, our also lot think I positives a full that when guess, a incremental of Jonathan’s three acquisition. contributing? QX it’s per reiteration there’s in rates So I internal comments, missing of guidance reiterated on your like your you $X ones strong. now, an outperformed guidance guess with of I it million am layers what that seems just mind, year in quarters expectation; I

comfortable, from pressures mean the the right? big feel couldn’t lot with I Yes. that call, inflationary the uncertainties a we question think Candidly, tone very tell is and you if mark very comfortable guide. I out there, of the on

will. can you interpret So that you how

formally those of little of taking tucked from we And and more different we have what more may this synergies some up hear at months this given a pretty something us not and little But here bit acquisition feel once over into next bit, we get market comfortable juncture. couple second see and numbers the today, of in reiterating. a fully realization visibility We’re of that end quarter. the at you the the expanding

of truckers the appreciate of the relative lot to publicized kind your on a I of declines there. van market. curious other the spot of commentary in out so kind exposure public market top But rate that, widely end Good. dry

we’ve altogether? kind just the there past different to don’t correlation if market any six, nine the seen months to obviously dry a flatbed but cycles, how that, spot specialized this or if van participate later, heavy have curious any indicator, was haul completely context guys leading You you and in correlation of as

in through couple of dry are analyzing segments at Yes. there you, that and I at individual years; the can portfolio going you a same correlations – end type now not diversity correlated of happens tied there’s correlation reasons, we’ve time But I the for aggregate, when we’ve in of look last see tell just what closely be of disproportionate kind look to lack of you over more mean and van. transformation And that we’ve Daseke in or thereof. when it lot rate been of there. efforts a – the different amount correlations negative as the don’t spent trends, we the a portfolio, the business may markets, that

that’s And going… think I

going that’s Yes, years. over back and XX

So trying go through there. to cycles multiple

it for That’s guys. Good me. Great. luck,

Thanks, Ryan.

Your next question comes from the line of Cowen. Elliot Alper from

line Your is open.

you. Thank Great.

question. that spot months. of the and piggybacking the outperformed over seen in past drive kind of So rates last flatbed off compared We’ve couple to specialized

about Thanks. And the with you you’re the environment the this. in but guys seeing to despite group on spot, anything maybe of around April there? the then dynamics XX% seeing? you’re I XX% down performance on to have contract Can some You discussed rate talk side? you come know your exposure commentary kind

with here we May leaders of was board, use trucks. about more more operator of lot all was and just our were on the Based week Yes. great through COO Demand we’ve we’re we end And doing what was strong. Yes, Rates seeing cat of specialized mean, the meet the And on data. right. man, strong. We April outperforming they’re question about almost the was let you’re Thanks, our diversity not there’s out LP but the I to operational again, customers, a April call market. of seen side. discussed the relationships of there. brokerage everything can some get yesterday our markets with got van. strong. support, dry bag, talking – strong Elliot. trucks. we opportunity a April, just it demand the the we first customer across could our that’s a actually I on the fleet, out try that rate but comment and been needs We the can flatbed have to of and owner the previously to on public some both we

kind So correlations retail-oriented kind that’s of market of of affected people at some heads end scratch of of versus more that model making are exposure our the the of some kind why business between we our our kind consumer competitors. and maybe

for if XX% XX% think just I it I think probably Elliot, had our for we that to Yes, to what QX, repriced of book. in guess, we anecdotally,

I on think the demand market, the continue And hold side, more. kind challenges to for of fairway environment to definitely supply the if up even rain there. steady, present a again So nice not firm I is think the

baked the And your side, Okay. into of operators That I I guess seeing growth, unit we guidance? really you. the think through about the line guess new and should net kind top helpful. the was kind year of how the anything what’s platform? to strong onto over on remainder Thank business owner-operator that you’re of

are lot of with paid percentage familiar revenue Yes. that you’re on A That right? guys those a obviously model, – of basis.

owner-operator then into still go to little and walk sure sometimes a just or wheel put for look rate do, about through to they right a will are so do this the And assets, than is there it’s what good thought not right, where month, an through program So it week try like training in will, owner attractive option. becoming strong it’s to an them kind back LP job LP realize if is environment an that and and them where it’s and this to and right? them. over at a think have our which We on really program, that or them maybe the company. of there of times them We cycles, of difficult an which owned program, leaving, helping make harder are rather do a decision kind them operator guys the but educate helping back is little bit just you it to we past help bring and able they like. And them were

for of lot the we’ve been strategic So how reasons interest we been it. program previously. in about And a we’ve mentioned I seen have that growing very

continue with being that forward side move able in guys down want now being aren’t upside sure not to of but not at way. viable in years profitability right? a make insurance things volumes, to other from to overvalued of program, We’re looking equation, that internally things, of rates side spending we the of and just a the The analyzing and also trucks safety debt three kind terms time of stuck of lot of the in pieces

a of of type we’re that lot program. work there’s that question yes, there’s demand now, But no for of So right lot that a there’s that doing.

expense margin it’s of capacity inflects I it way Yes. profile terms of to of think And kind look, a company that’s a the out our trucks. flex half nice in of

search absolutely capacity. it’s So

of optionality kind and provides shift to also LP driver really company or kind we’ll downside of the take the starts those trucks LP the truck. are of drivers when back margin to soften, doing the that twice We market them

of a rate it a in hedge stocking environment. So nice kind provides

great. Okay, Thank you both.

Yep.

Your of Stifel. from next Subin question the comes of Bert line

open. line Your is

Good morning.

Hey, Bert.

Bert. Hey,

comes you of said current contracts? revenue dedicated from percent guys what Have total your

No.

the dedicated, a and lot imbalances a it’s continue that definitely things it given of how look of number. historically. people it’s kind especially the is And – about. call customers out growing different a of of business I But know, of are depends, to asking to growing digits. supply/demand something, portion that there, in also low but our be think double that’s define you It kind disclosed haven’t you dedicated. Lots We as

mid-single think that’s Thanks, moved I assume little a probably side? plus. what’s bit Got Jason. I on quarter, your ex-Dedicated? Okay. I you are What digits it. contractual you up seeing – said now? Like last rate probably mean the

it year. Yes. little for inflationary Last get listen, continues I be to said, in rates. the I know. quarter, kind it looks of hedging what was of when our environment a we hedging it kind because were like suspect even bit I higher if I we about talked last about we mean, might because quarter, the time be, don’t we’ll

reason probably on things the line, we’ve we’re top compensation got inflationary like drivers that. rate to the because you’re costs see but So an the the more through and we’re going going and going – getting is to higher outperformance

pretty we’re an of maybe feeling big five where not But months on now. are trending outperformance as line. about bottom good right in rates So the

have impact seeing you’re of spot of trend, in to you in rates terms that And do follow – start you you a ton reiterated sort the don’t to brokerage What driven? of expect just what would the know on exposure. flatbed be sort of if I

what a our we really several great have That’s broker support Yes. the for As I’ll and stand-alone start is expanded brokerage them. kind and our has overflow with question. been over as an our grown have couple customers that we by for right? Really, strategic wish much and years function had brokerage platform. of reiterating years us brokerage a freestanding our of model, partnerships we last profile ago,

owner-operated reality down is, we the on things that or our little and taking things them slow to away LP bit, company-owned bringing so our to if and a And is simply capacity were would assets. be kind of from broker

to So it And that. really, on capturing net-net, you of you’re that’s margin we what came COVID the when would similar kind lose through. did nominal just back that in XXXX

same that saw You forth. of shift and kind back

And flex a to as Jonathan of is, up and it to, valve so alluded able move down. kind for us be to

bit, assets meaningfully, over kind pull we might down our onto freight a would pretty strong we if generate slowed down of slow while see it that just where margins. so that little we can And

Okay.

me. equipment your is XXXX? for markets? the did to that what final out post mostly of say that oil you business? tailwind a potential Just exposure Is Or you for Could question pull

Yes.

strategic wasn’t had a fit an just So been rigging one we of the that business. company at purchased oil for point, which had kind

rigging like lot that but that still so that, talk now be I to used support business end of would lot completely. up markets did. divested into a that directly a business And mean we’ve we we tie Abeta about that not that oil

it. Got

Okay, thank you very much.

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

Your open. line is

quarter. for guys. taking morning the guidance again. I wanted to Thanks Congrats just on questions. cover the good Hey

you said kind right respect And with dynamics assuming it. what kind to your market are unchanged? You now of capacity remain on expectations very of that Are with comfortable you’re guidance?

Yes.

very fair know have all I we’re cautiously listen, Williams, think our I Rick – a optimistic about providers very, know that that’s I probably our OEM Jonathan with equipment. detailed know and COO, I assumption. myself, I conversations had

best ground. they’re they dig the I making to I doing out, and think some up can think they’re

to share this optimistic thing. able which will see We’re be the get other hope we seeing the what year, people we’ll lion’s same be means that to still of

we’re that soon. but model not our slowing anytime it’s down business demand – side, think just seeing – so And having indications you the said about on any we that, when

the doesn’t you’ve plentiful like been future. have that’s so supply And look and constraint foreseeable what seeing, down you demand, got and it the slowing in we’ve and that’s

and type of or kind mean, Yes. QX are make year the QX as break us. big quarters, for I the quarters the Greg,

so And depending a our with rhythm those customers have pretty the quarters usually market sense early good verticals. April, our have end May of like, look on we and going are with kind by to late we

to quarter to think our we’ll of kind Jason’s to that speak to in second But going end on and of about any we’re call. mean, think feel of that’s better markets position the by good we guidance, continue I be the back so our expectations. state industrial-facing And exceed call, a impact that to going probably optimistic that I point, heels I to very again, cautiously

of it was could like when talk did about chemicals. Daseke. markets, it helpful. more And that to new what and Great. contribute terms the brings little you date that end the in up Very the If seems guess, follow to new anything footprint, bit looking Okay. I QX? then tuck-in checks expanding on on you’re acquisition. a specialty boxes, It completed and the all for exactly geographical Could what I it maybe the in footprint terms of

we a a March. currently big have that sub And hazardous it’s mentioned look, actually acquisition we fit, It’s that was waste. smaller in strategic were What vertical service a was There It of part customers permits early a otherwise really new the that. few into of with that Northeast, within into Yes. your which country really, we closed from acquisition a a today. way and the kind access relationships into have region, did new can’t us got this we actually you today. permit

have You country. part of kind way the to of that into buy your

of it to footprint. our end nice the a correlation Again, a country that us into type low extend got allowed market. it’s us So part countercyclical

with long-standing commercial had of good commercial on short our very We visibility improvements. our because relationships have with of those fairly our We in because executing relationships those customers. scale, of customers, opportunities,

is we’re trailer-centric a tankers. moving a This kind now the things also it do of of acquisition mentioned from strategy. on calls, this came we away with few One and did

identified tanker we’d kind now And modest fleet Daseke, so kind guide that’s look kind something have this very in. to we’ll as of position leadership expand push our of the specialty is of a of and to we like of submarkets, part chemical the grow likely one to

Perfect. on the I to transformational wanted I $XX on, maybe transparency of guess guess, was wanted when kind deck. included run for million $XX those it your realize slide that think Great. improvement to you initiatives on XXXX. just your to me. of savings? touch And that one a last just of million I I be in some annualized I earnings in complement in to QX Is going kind rate

Yes.

QX, $XX can this early quarters I again ratably QX as I of of confident as by is by ability over generate But that I by Greg, that. think first the you certainly And but look, kind year, – very that you – of rate, you’ll year, to potentially the can it’s kind start to see layer of think that I in think a about such exit QX think is think, $XX look, million few it our team XXXX. run of really kind the million. full the in of to

we the transform think to being on been we’re is upside continuing months, several to thoughtful; there’s think in I The for we’ve about plan. plan Daseke. working how being surgical really something

accommodate this net whether strategic things business of operational still growth, to of to So some opportunity. tons leverage the a organic. think bone. There’s still or of this let’s even be isn’t lots we – there’s cut – of tons of We movement, additional in the it

guys. Great. Thanks

closing I will call over now to turn Jonathan for the remarks.

time us facing and thank to We market momentum we we’ve the for to alongside you. thank profitable for look transformation. today. your and your you growth consistent like our today broader continuing everyone I’d forward our a to and in returns stakeholders. for generated commitment look Thank in confidence upon the We forward opportunities Daseke, translating

Thanks, everyone.

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

now disconnect. may You