Daseke (DSKE) 6 Feb 232022 Q4 Earnings call transcript

Good morning everyone and thank you for joining today’s conference call to discuss Daseke's Financial Results for the Fourth Quarter and Full Year Ended December 31, 2022. With us today are Jonathan Shepko, CEO and Board member; Aaron Coley, EVP and CFO; Adrianne Griffin, VP of Investor Relations and Treasurer; and Traci Graham, VP of FP&A and Business Analytics. 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 issued earlier today.

You may access these slides in the Investor Relations section of Daseke’s website.

within turn the over that Act Company's cautions forward-looking to who Adrianne provides of like the regarding read of will Safe statements XXXX. would the Litigation to call Griffin, important Private I Securities meaning Reform the Harbor Statement Adrianne, go please ahead.

Litigation Slide statements the Harbor Thank statements. and and to Today's everyone. Act within review of a Reform presentation Please morning Michelle for Projected Securities are of including forward-looking the XXXX. non-GAAP Private meaning guidance you our turn forward-looking contains financial good X of our Safe statements. information, outlook,

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

which the segment administrative corporate results. like expense, corporate disclosed expenses a I reporting our would and with eliminations. salaries, our and segment segment not new update also to based decision and segment financial we fourth expenses two transaction Beginning the the intersegment allocations company corporate and included level other expenses, had included discussed to our acquisition is to an information aligns Previously interest highlight intersegment upon corporate segments and costs the revenue eliminations. and materials XXXX eliminating reportable respective with at segment allocating All and operating quarter began of revenue. our in

required undue not as events with that future any applicable reliance to securities affect for discussion be forward-looking our risks a as our today, occurring revise otherwise, laws. place I new information, events to obligation can of statements. any encourage result forward-looking after statements Commission may you and business of to the or except reflect We under a circumstances on or Securities no undertake Exchange whether filings and read our the to

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fourth XXXX wrap call of then our few will structure your the line we In and then with and questions. are our and call for the With quarter review I a comments closing to Jonathan, provide will Jonathan terms the priorities turning business a remarks today, financial about outlook full the who I'll XXXX. review operations our start strategic against And call our over. of making will our over of turn we the who and speak Jonathan. execute year as before up the by that, will Aaron we progress open

a She like slide Treasurer. her the X, whether we report of it pleased are you as I'd everyone. And made consecutive Relations of today start to the have community. disciplined team today to morning, Good our collective the professional functions. this have to you. company's our help and call focus affected joins Investor IR years, Team a snapshot elevating thank successfully time we the that welcoming third over I'd Thank who members on commitment today. a team. we driver of Adrianne to holder change I Vice to story, Daseke moment the Daseke President adjusted by last appreciate the of we given on will or each everyone our Treasury It's our of record we the thought are new especially long year further to of to and provide due also to and would the to amount spend Daseke like acknowledge EBITDA. are like effort of just Slide sense us

environment the mentioned, comparing of XXX.X fleet the cycle less peak As rates our a $XX past our XXXX, issue work This your slide move potential million, accomplishments since where continued began another than of this was stage for peak of XXXX cycle our by generated to prove the improvement peak is XX% this I'd of record asset adjusted an which EBITDA is and as last our both our some million to of [indiscernible] that yet With the forward was business an was that at will XXXX XXXX generated set was utilization. year's noteworthy our XXXX by a peak we as was during leaner a outlook. XXXX approximately and to in for current revenue like before to where backdrop, EBITDA highlights adjusted rate record XXX.X share the that total company, progress EBITDA. to fleet million. year demonstrated XX% earnings performance on I our of nearly and This

a enhance given the We our and executed on In was EBITDA. of our through our from represented. stock adjusted the growth of sheet deleveraging. transformational our accelerated consecutive solid We to accretive percentage repurchase XXXX commitment year third we balance posted -- affirmed delivered overhang meaningful, of perceived revenue which share removed founder, and the the the company ownership strength ongoing our founders record

market outperform transformation we industrial unquestionably one traded and of asset of flex. A publicly exclusively blend peer. economy resiliency vocal logistics We transportation strengthening positioned and by are light sub capabilities our combination have believe based diversification end asset doesn't And macro through strong the serving other the model with been is about of well and cycle to any vertical. operating when environment, we different from a that the initiatives

turn we announced share me XXth, average September of million repurchases. like $XX over price XXX,XXX plan, discuss XXXX purchasing this plan alternately will weighted at the to under I'd to a $X.XX. share X, fourth repurchase Slide On you shares quarter with If our

with perpetual plan the dividend. very and Series convertible this the shares funded to on XX% nearly If terms founder of are our part issued all affirmative subsequently repurchasing have a closed shareholders. November plus million or redeemable already for million hand on common share issuance is Series in then that with repurchase then stock. outstanding repurchase founder and XXth. in We our native we XX by held preferred Series founder through company preferred comments. shares of B and starting whole of purchased not negotiated B share our on the favorable total Before option Daseke’s announcement In common of XX.X B the note I'll sole and cash unpaid no any accrued preferred or and

with uplifts price. significantly adjusted is for coming Simply As profound and growth rise And year Pro in $X.XX of consistent Forma based exponential most providing shareholders valued one our this and slide, more put, performance XXXX. upon opportunity outlined immediately the EPS while years, strategic aptly share for as our repurchase the in gives were to more a focus accretive these of transactions stock this execution any this full provide of will buyback framework, company capital fits no over delevering, full the creation Aaron to that, intention walkthrough to future. foreseeable on fourth squarely who will With a of call shareholder now additional the hand allocation quarter and Aaron. now the the has of detailed provide our I within value year. our support will in our and repurchase

very fourth came Compared and from operating rate also quarter wages achieved we realized results were to our we declined primarily on XXX.X of excellence quarter year-over-year operational than steel per to consistently million, while market we're start would and like facilitated business and Jonathan the XXXX, reduction driving in operating partially high I level from equal to XXXX. acquisition agriculture adjusted or expense. morning improvement delivered demand million faster the of by the mile, fourth end maintenance for in operations renewable we cargo our and of high again, the benefits completed a model a contributions represents the with vertical, compared XXX.X our included markets, early inflation of focused fourth million Once we of as XX.X improving everyone. to quarter revenue primarily offset a security ratio declines X.X% consolidated good total by XXXX. our execution. expenses And energy said, quarter, end plus growth This you, and of as salaries, EBITDA up in revenue. In increases tuck-in XXXX. per of the quarter. revenue Thank in XX.X which million tractor. delivered strength cost strategic That and increased miles our X, ratio the adjusted Slide quarterly The on resilient review in which and

Now improved basis recent impacted the functions XXX.X our end prior points with XX.X to capitalized and turning up the and very security offset mile by XX.X% capacity shifting that renewable increase delivering soft Specialized XX.X% the improved rate asset $X.XX, a million. of XX.X%. year teams tractor in total more strength was in the decline ratio per per quarter prior our year on Specialized new to EBITDA tractors Furthermore, end which to with in was performed receipt miles. Slide as a markets high by the an haul our near in demand adjusted energy over growth fleet the million, in asset-light by X% including well team cargo of as than year. shorter demand of was company day cargo, vertical. markets agriculture, moderating aerospace, end adjusted length mix were revenues XXX per the high X. security construction solutions improvement loads All to and at magnified was segment strong Productivity in versus operating miles

and miles rebound per day a new normalize. as expect equipment We productivity in deliveries seasonality per our tractor

Despite a X, still outlined premium rate segment we first Solutions results. Slide was able market. year-over-year garner compared Daseke to market pandemic, decrease rates to On flatbed the the in since Flatbed the

segments traded year XX.X prior assets inflation, than and increasing lower utilization resulted to on cooling of enabled focus declining and rates million. the the in top of and lower to us prior XX.X% in primarily this manufacturing, shown which and freight end and year X.X% XX.X% entered on Lower the the agriculture asset decreased. segment company market, EBITDA partially markets of in the to in construction, margin was on operations from adjusted maintenance loading, ratio our The XXX.X chart in which from revenue in which in company brokerage model asset offset the As demand right a revenues demand steel use right million decline resulted slide, operating this revenue growth XX.X% end the adjusted cost higher period.

Slide a over cargo moving which achieved in prior grew of a XX.X% particularly billion nearly at market strength XX% by X.X Now end X, XXXX. XXXX over record to high representing driven we improvement in revenue the consolidated security year, our

As agriculture, vertical well construction, as growth aerospace, end steel declines in offset partially in by and the the renewable market. energy and manufacturing,

XX.X% per mile the increases XXXX, in we income in rate XXXX. over million We of with achieved operations XXXX. per In XX.X in tractor X.X% of million also from revenue and compared XXX.X reported

However, integration and and we million year related and expenses insurance expense claims expenses, in expense from elimination incremental to resulting X.X acquisition XX.X million compared XXXX. as in trade of a non-cash impairment names, fiscal of X.X restructuring million, XXXX had million X.X

shows the The by XX.X% on XXXX. the able continue in maintenance, headwinds we're offset Though our all exceeded of inflationary operations across as was expenses, from margin as we XXXX, some to these from ratio ratio increase in company to operating Adjusting operations shifting primarily well these year for built wages that pressures and XX.X% rate adjusted have higher to in team million profitable in XXXX. experience benefits, income and an operating salaries, set of assets most would Daseke delivered asset commercial deliver execution an the it resiliency year. record to model. very our adjusted We're Daseke million flexible our our the agility and record operating last to assets previous redirecting shareholders of of the of achieving entire light of this for and record set The team the proud strategy value and XXX.X we as and team our suppressing to EBITDA lines. XXX.X

per cargo, strategy XX.X% security commercial at based This markets. construction tuck in on all revenue XX. and execution for look a adjusted modestly in by success was increase XX% segments strong in nearly rate tractor flat renewable XX in end XX.X% the using year increase mile high EBITDA operating and company to growth increased company's improved Let's an miles billion XX.X demand compared XXXX, aspects report to offset XXXX year strong our XX.X% profitable Furthermore, and adjusted year demanding revenue of revenue to We're million agriculture, asset essentially manufacturing, Slide total by year deliver ratio full in due from of XXX.X acquisition full the contributions grew accounted to growth. basis Robust prior $X the the to to growth. per just specialized revenue XXXX. on basis light with versus full versus versus X.X% on vertical. degradation points and energy now Segment pleased and solutions to starting the

circumstances end softer capture end when decline Compared a grew Flatbed up XX.X% agriculture was gains to per per construction, in and year at pivoting Solutions in was second X.X%. Wrapping year to the X.X% up miles discussion rate declined primarily Flatbed markets XXXX though Slide tractor revenue assets as markets market. ability the full to and steel on XX year increased softer on for XXXX. to attractive end necessitated. full and look the year-over-year X.X% outpaced owned revenue end from we Solutions total manufacturing, overall markets basis, Segment strong their rate from million predicated which markets end XXX to in company segment and for mile

of primarily operations and from as sequential both million rates year pressures market XXXX inflation in than XX.X XXXX, growth. claims worsened half of OR due revenue Adjusted adjusted decline Despite cost the over XX.X% inflation XX.X% of EBITDA second results. offsetting EBITDA to such rate in compensation, market of and insurance cost and driver modestly and maintenance, more Adjusted XXXX. full XX.X% for margins declined from

to the million a and second our of was purchases flow as free sale cash of equipment, the significant ability equipment as proceeds nearly In cash robust and our terms In flow cash year cash XXX.X on position. flow in XX, free for see XXXX Slide will you liquidity property with generate from well offsetting row.

robust to revolving our note cash plus our over balances at availability flow maintain continue operations, credit where cash end. We with facility over give our million undrawn million from cash created strong XXX year had XXX liquidity balance we of could XXX million. Jonathan I'll excess our of $XX of Without been cash in repurchases that and year end effect XX.X acquisition. a to in million the million the in these the fourth fund cash, quarter to tuck discussed uses liquidity have two of from

the confident over On Slide free With it's to generate strategic provide have another business undertaking on a The positive sheet. significant taken has update of flow and remain yet the years performance. change macroeconomic XX, our improved few our is year balance of established regardless record we lasting, we we results ability a trend our cash environment. prevailing our real, last in of

one long flow we're target committed our the range the to the and the the confidence, the range the for quarter of value outlook. XXXX. end QX loaded to this directing expenditure to to sheet target our call progress fourth free XXXX half update and commitment this fortifying of leverage the do business leverage goal. our declining shareholders. de-risk I'll evaluating in We reduce of cash an in turn We times of establishing example upper provides our end We're that our Given the another business believe Jonathan balance to operations. proactively now are a options and to seasonality deliver to this focus increase of our for Jonathan. our and towards back two expedite on gross term to before leverage capital will plan, of slightly to given ongoing normalized note a front range

Aaron. you, Thank

take and XXXX environment on like market Before we the in perspective our in I'd questions, some the provide to the over business XX. for Slide and outlook that turn on call context

believe for services growth improvements As cross limited business should in the we expect continued availability the some for in end allow We the which serve, of and spending a than an higher trend. their of improvements unfolds cycle set XXXX our freight when given improvement tractors, markets prevailing margin of demand additional on is seeding productivity, haul in to operational dozen backdrop. consumer macro industrial correlation in strength mid-year which ultimately we driver by or are seasonally for company facing more

all into growth that revenue revenue expect net and will to flat compared low this of XXXX. We digit translate single with

Though pressures work to work in that the rate half inflationary and we the term, cost through the that -- near through do began way their environment in second ongoing XXXX readily acknowledge of challenges continue markets. the

to ability ongoing collective to to However, next the largely provide the call, earnings leg these profile upside to headwinds initiatives during as in expansionary cycle. stated our our last conviction on offset additional quarterly impending the of continue we transformation our and feel of

our model adjusted expenditures a levers to capital in maintain and the our and the XXXX our drivers, the positions our we of standing Given our view each as to fleet, of our opportunity, attract specific OEM record reinvestment age in Daseke and with view environment, valued our the we improvement, XXXX approximately XXXX favored our In our see market drive partners. retain initiatives, margin EBITDA exposure, that we print. end have macro outlook, of sizing available year full fleet net preserve continue in and to line with current one operating variable strategic transformation

most CAPEX of spend Our first is capital expectation XXX to expected million the expenditures the XXX for to million for half in with in XXXX, of net occur XXXX.

record XXXX. outlook, this with very and results are upon We especially building XXXX pleased in XXXX

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

And Subin [Operator from Stifel. line comes the first you. Thank question our with Instructions]. Bert of

ahead. go Please Your line open. is

and for morning the thanks good Hey, question.

morning. Good

Bert. morning Good

we about in think XXX on last have like us Can of year's million more a if and go then year, it EBITDA you strong cost XXXX? keeping this an is I in about the about your you related guidance, that how seems give expectation thinking will specialized update little you're program flat of talk maybe how can forward stay to versus much I you guess,

I or and in Adrianne Yeah, address Aaron let sure chime that accordingly. can

really said run of through the -- the So last in about kind in to taper still initiatives, run uplift going in to we this transformation in to our to we That's look, see we're XX going XXXX million through -- of exit we've few rate million exit calls, value. year. that start do XX incremental rate believe

You're more by that going of start to midyear. see to

-- XXXX basis probably those So we in you're think snapshot I'd or on look, a likely XXXX. XX probably say taking activities. average do XX, of a we of plus minus of that to XX transformational do on kind

our that will other this The a mentioned, Flatbed think bit components XXXX, thesis QX year comps than little outperformance you will -- we as specialized, continued softer kind do of in of in outperformance although QX sure be kind the seasonality rate the peaks, by have again. of touches think typical certainly healthy but I'm healthy -- that we XXXX environment QX again. QX, where mid-year not it

overall feel that do we a from year rate to generally pretty we're good standpoint. a have So confident going

couple We things us. a for also other have of going

our bit of a the markets. So little talked end about we diversification

acknowledged continue You outperform. our specialized end markets which to

another We road on year. this also probably will have to the XXX trucks XXX

trucks. we're back. see a XXX equipment probably growing So equipment lot We're preparing new we of that the reseeding older the fleet year, so those are at the got think don't bringing you'll be kind our new trucks. the equipment, of I We we're of the end QX. until of net-net benefit about

to QX certainly QX. the think full that of see then in in we'll peak So season QX on really and in start our and effect I

discussion, some We we markets the mentioned We had expect, his do as Aaron on side. also productivity. end increased specialized expect in

of per some had kept year in forecasting that this per something around miles the We're flatbed headwinds side kind XXX. on also day XXX. truck low We the our

an miles improvements of side the look, gone XX% stressed So that And back on really and to improvement kind per in X% business think truck. productivity in Flatbed really, I the on productivity. we've of

haul, trucks and velocity. about making particular We're getting mile. appreciating over faster. we that too We're turned we're long loads per for not laying trucks. take, about really being that unicorn rate sure trucking that not high sure making the we're is understanding looking But that So

trucks So getting those them out, out longer. keeping

kind willing, a more a of being if take more haul of bit it. has with So mile willing length load rate little to it moderated per

of that's So thinking a collectively things and us think going those hold we're really to to about the we lot allow line.

dollars some hope A million year. that of have reserves headwinds net wood, dollars that took this also see. incremental we, insurance of We knock we million a few few in on don't we we

also provides bit keeping that flat of a support So little EBITDA year. this in a downside

a from would million, I of If XXX months or what’s have for program just that We resilient again maybe this of I data in end there's would follow-up particular cost in driver think EBITDA today. that which savings strength clearly there only conversation we're sounds reason is XX a been good the in be So been $XXX that something be last of what say, It would having is But and doing you most the great like is on am seeing was, the some part do sure and is downturn. range let's and don't the pretty that the should sub and ask downside. that. Specialized markets. -- you're potential solid have have outcome. some assessment

comes maybe it the in months a then risk? we're just, looking rate you in and of what what XX hit and happens side that the at was didn't little little are If things to a down to your and or it so those assessment marks what And more productivity. this exposed are what's happens worse, the

mean of I I I I us is rate. down hit all it, it biggest the you mean, at I industry, that's think end the in of mean of rate the day, comes this think for Yeah, to to that these offset self-help we make a business that'll kind on going of we're things. have will we our or working of that Again, initiatives improvement break mentioned out that. control be thing lot

more tailwind which be from as And really shift a that's it the we into drivers, owner certainly the of really two quarters think XXXX a LP drivers, and XXXX. we also away strong operator going of The talked We to XXXX, about headwind company XXXX. had, few drivers. last weeks will last into

in So only if rates seen continue. have I to year, the moderated far continue that a to shift And which ability our a much better margin think this company stay seek will that marked trucks profile. trend we've

something XXX XXX is below a pretty think to I assumption certainly a draconian might to. suggest target or we or hit

think I is today than the business the was last Daseke last the that much model it stronger trough. in downturn,

that I we so fundamentally have just a our fundamentally are in -- range profile And different think business we of earning operating profile, today.

I cycle, think had least, everybody's we're October where this then and well. August see spot starting certainly rates, pronounced rates to rates month we up in as so, today, XXXX. or have to to and I the kind rates. the in contract rate we our took cycles to And if since contract of of down for at really that about up started look and shakiness to at some leg XXXX contract in XX% Again, we at, those are rates into as we months down expansion, are And rates. more you part firm firm our starting slowly contract year in leg contract our look but the XX% a a January on XX July XX of has falling spot if at XX typically months look and at XXXX these away, are we're better or been kind you XX we know talked to and this, XX in -- of but of

the today you the Great of the going in a the the of look lot on operator So industry, if week together, you different sorry, at a of said per lot haven't drivers, not that's generating, at are when I really, the right drivers, had mean, some are the LP I QX read But things, you QX owner back loss people carriers that seasonality you can to at think or within net at when the we're about relocations bottom. more benefited XXXX at Recession, kind think to that you look now. destruction, is I we I XX%, commodity And at Even of you of think XX the the things had and of something appreciate seasonality. never uplift in bottom. or XXXX When peak months. at the that the that drivers, the margins look we when business. that when those I've you authorities look destruction carrier markets end demand, but a debate to whether supply capacity shift were look take company pulling Great we environment in start we good Recession, the rate trough I still just had We've with in those peak this, prerecession we don't XX% know rates if where rates, are

the our exclusively industry, but that I underestimate industrial that facing. of So of diversification model, particularly its the I think for the think that people underestimate, speak resiliency Flatbed, people I can't and

I be think at will performance, cycles expecting peak by XXXX, I is XXXX that we of a what we for really, things this are going from of some and not think, be blowout a going match peak. I in going we kind year? as cycles massive to mentioned. have to that us XXXX do So repetition we'll assumed There's It's get other but But XXXX standpoint, No, that if haven't XXXX that. to you it's rate lot rates. another future we XXXX assume at not. you predict year, And in have a had look

will and had on think low bullish we you point if XXXX the pretty we're to that again, So things be call it.

comfortable reiterate, can statements we achieving a to can Sorry But just kind on that, we look, Bert, results. forward-looking and would about flat I to year-over-year of outlook our that. add with we just feel talk very

a great cash flow a delivers value CAPEX the of net have free that for shareholders. We bit to quite

to nice trough a can when in that theory, but a we're we reasonable that about this believe we assumption deliver. frame budget committed we forth fully the it's peak XXX, is and we're So putting talk put our current

as think Flatbed we double-digit own But like last brokerage, higher Maybe it the there guess how Thanks Got question, we know maybe then that's you question. shift the think sees about it. just some should to you again I you now that's the my from little just guess, opportunity. overflow and for comments helpful. the is using And expect more XX from margin you the all your I just if That's count and about some assume have question clarification a and healthy? of of made a terms super million should can repurchase, and over standpoint, out? clarification, modeling saying I Jonathan, a in we been brokerage declines, my that year place share logistics starts assets

Yeah, been trucks, a would It's our company number X% onto have And going very that we loads those or about. otherwise at our year. far see end so which the brokerage into is, of this carriers shifting it saw by it model the have we're And taken talked January, and we've again, a employ. it we so X% peers model down third that we acknowledged QX. you party of that

is year if at what brokerage we've it's end brokerage is that you down, margin would our and I kind that the valve, XXXX So up. really of say, seen the the will. of so going far is into control on that while though,

well. million reasonably working off performing let the actually Bert. now, it's it's we're share So exact count, me you that share count of XX The get

it. Got

it thanks Well, I'll all time. over. great. the again Okay, for pass

Absolutely.

next our one with next Seidl please. comes line And our from of moment Jason question, for And Cowen. question you. the Thank

open. Please Your go line is ahead.

everyone. Hey, operator. and Jonathan you thank how Hey, is team

are how you? Hey,

you you of mixed Hanging for earning was that a hauls? XQ you I a stuff that clarity It's to I big in. more couple wanted ask on because in shorter the productivity sort security us, Can was down, mentioned guys towards little that was a decline it, step on but still put shift some high here. than know much season a cargo

In of was… there you're QX XXXX saying

recent Most quarter here?

length I of little some on hauls okay. it kind high That's specialized look, side, side, Oh a security of cargo was average those of bit that the of shorter on the on productivity metrics. weighed yeah, the right. mean, were

shifted really if some lost more life, to again, XXXX. asset On you productivity. we operator the And LP Flatbed side, owner remember, into moving we

the their fall I'm some myself And of had Either parking the LP right that whether exit and and saw same environment for to reevaluating not industry Or shift market now. drivers I've well over done you rate out so away. going, or year owner of the we a this or money company operators that trucks, changed they of ultimately they're taking amount the weren't making because being driver.

year, you we'll QX land two So probably in and had a movement drivers you're which lot those of this QX, holidays out route year. time there's also of in around to having you had some drivers Look, the just back where the of figure there home. those

So that, virtue of just you lose productivity. by

that hopefully your question. answers So

We also took…

does. it No,

of a late took get fourth the them also lot that. when which deliveries in trucks, harder late of quarter you like see we Jason, are to

And so, that's part it of what as drove well.

we that QX. pretty expect been with We've to classes January. So successful recruiting our would to in in start rebound

seasonality the just that And seen I some that of improvement imagine by you've probably some would already mentioned? you in

Correct.

And sort you talked peak about for those XXXX, be XXXX. when Okay, you of year next think you you to XXXX in you expect think behind guys will make big forecasts if peak said of I and in sort back for I numbers rebound what an to you out? question. at like expected rates another those rates Jonathan, trucking

But, the try of cycle track cycles. I generally and it right. a what the we mentioned overlay and recession, to floating look really to four Yeah, if a that think of at to mean, number industrial in past And going of at to around. them saw at you look these we cycles. in currently year lot XXXX, Bert, is I think as kind I at things as -- if three look looked we the we we different And, have we're

about or to all XXXX. of it had that You of kind XX% had the peaked debt, at then you sovereign downgrade worried it's and kind had kind that kind of the and quickly nervous kind ultimately came quantitative heels winter into next to had so. And you where and back, got XX of that some XXXX, was down out in that so had seasonality, about summer XXXX you And normal going tanked fall And of in they again, the so things XXXX, ceiling, U.S. trough. XX everybody more peak you the winter, uplift, debt then some summer leaning of you you XXXX that into had back of back. to months and your that people got filled into months, to in the around had on XXXX, XX about the of of and the world, trough issues the easing of you you peak debt uplift

that XX%. back these down that look peak XXXX, XX% to XX% that XX% XX% of closer Great about again, Recession, we've to XX%. But at XX%. they winter seen if it In to months. only within exceeded to And cycles, about was again, trough those were was rates to the of where got you XX typically average you you The cycle

different, to okay, the back and So that we're have runway, we winter kind type characteristics think of early same cycle a cycle runway slow of peak do still the peak at on where going to have you new will will where have which kind you you have to there you'll XXXX, and you of at and the and by, to again, fall at up have you'll kind a for from in probably kind peaks at but us by we mid-XXXX, up XXXX. be we go, a winter, out in you'll drivers go, have XX continued that of that look a XXXX feel are of be of firming a of on and down, then where like today month we we're seasonality, look

lot of who and our looking a could again, the depending done but change that what work at on knows, again thesis, And obviously cycles on really that's we've Fed does.

X of think there's And report lost taken with concerned still jobs And kind optimistic jobs A don't again, look been had interprets would you million the X I have data. population our as employment that of where and Cautiously look bit we're this data when lot noise employment effects million how takeaways short, those. Fed the otherwise XX% of Reserve we trends they million about adjusted continued. a jobs trends, the last in through overtighten. some little part that of of is if out. to of you at growth, for COVID XX you had workforce

I hot So a think said at that everything it's still behind. I when the else, market, jobs we're this think Fed way looks and

cause shifting over I you market go we've think LP, the initiatives, the back But self-help drivers And could drivers. LP operator that if okay, going margin continue us, got end got we've issues. other to they from things away so we've I got for more think exposure, some to, owner company tighten, lower diversified seeding some

pretty bullish come. on we're So things to

to color comments the the I that. on deeper I appreciate contract dive into wanted on to your try market.

started think seeing some November, now. in I seems but softness you trending said like some up give you you Can them? numbers behind us it's it

in you shippers had were so their shippers a November, fall I Yeah, more rates, becoming have January that. these the their approach. of seen of of to lot they've to I And, Jason, some October, at is seeing as goes process July. are back we I spot look since they're really lot the just contracted they're and what don't right our RFQ frankly recalibrated with kind now numbers sophisticated. customers is And, you've mentioned when what RFQ ignore really think provide can't and softening, but And, XXXX market part a of that there I looking think this -- their

freight, going QX And into into carriers, added part kind And -- lot going what the going and the be we're now to the really guys of low that side. go going going, the Flatbed they're ask him focused I'm visibility to cycle you on April. getting an them of speaking in on points submit because going to our to also on in before really that. to submit then to hungrier in when visibility of to pricing we're so want are ship, we're and go a they've QX know to these to year softer, on for RFQ our rates We're go then going going they're focused softer year. They're they

our So peak right of in right. front season,

you the also of is you, they've So going look going we down kind QX capacity put to really have you hungry good you really then QX to a freight. your of kind or point. And good to want hit before be be bid you for we how and said, want into to sense of for

part you think I that's what So of saw.

of down hey, get really tougher. concerns, lot laid time guys seasonally said, that said everybody's a and it this October, with out bid it of those before expectations, have really kind November So our freight, little come where a soft in on keeping of could year playing

that's rates. I a you And in for push what us down and bit so of think saw contracted little that if October manifest leg a on

then Appreciate would were over you if sort all something? you to it turn how guess now maybe of top and here. pull the market guys Obviously, what I And you it you the Series preferred? you what list on here. debt repurchase targeting be last B looks the that the if to looking then any on forward, acquisition can talk give comments and trigger are is it about first, and of is I'll that you and one, Can somebody mentioned else

Yeah.

approach to in So treated from But now, target ratings structure within hopefully a had One debt. there's shareholders at and down security. there a generate XX cash target. looking start said pretty sight in probably next going new we're But line and treated want a on should have at We're evaluate flow debt treated leverage or we're and to the that one doing year that term focused we equity We looking to that on holistically. two as whether we're going pay between long this that we months, standpoint, holistically of our year, be our well. the and really as it next that I it's given think ultimately it gross it. of make terms should to when be a debt was -- that agencies really be not approach we as one the kind to again, or how should it's we that to preferred be said a really way, a half equity. debt of quick opinion meaningful difference We investors, new want in think two -- as stark

very the think million it's hand, down real But plus the we a expedite assets paper, got cash the that side, rolling some XX% really you that there, has So million we some company that up investor fact estate to and like on ignore looked preferred up, very dispositions there's XX the terminals, we've our can of yards, can't the you've but friendly. clean plus got things a pay path coupon. cleaning duplicative friendly of at debt. stock It's that on XX we

tell X.X%, our is would term currently Now, what that I the on right. pricing loan you is about

is XXXX with So about X.XX at all but rate X.X%. we're the hikes,

sorry, good B I'm current A, debt. Series good, very to coupon, the good Series tranche that X%, dividend loan relative our paper, on the friendly term one So interest carry our payment

de the bit company like and flow onerous, we're that'll in. of XX% lever improve ways free and to But, company. a So cash looking is to the the for stay profile

down that some here near will overall balance of the term. through part sheet of enhancement in kind likely So large out as our pay come

And sense. makes market, the debt of terms the paid down? after in acquisition That

It's trend, closed, paying probably from and going great still the we move did, market February, a have we're still accretive. bit under non-binding to bigger too kind bit down. optimistic rates when Yeah, immediately It's ask that immediately March. have a that still value a multiple we'll early up of standpoint, one heavily like quickly little been a interesting. acquisition that lot that but slower We do late we're because look LOI. And the cautiously is a up of a or this acquisition little acquisition great still bid spread accretive, pops last

that few another were getting to close LOI. We acquisitions also under have

that We using we us table a a the that cautiously in these leverage little we hand, so our We hand. acquisition that of to cash acquisitions take transact we fund fund down profile the what net accretive. we and will remaining leverage the on this leverage up hand optimistic can line comment be on pipeline. that acquisitions specialized on I again, with presentation. it we're transact think some potential might that to immediately if looking there's back live even have we within think that in made incremental on intermittently debt, of have down. more can acquisitions today, think sight side, that target we're cash pay can some on do at, cash But want But allow bit to an have these we find profile. that to So the getting good of on We the will meaningful even we on that

acquisition in So the we're And appetite where our feeling on right, sized we've cycle, transformations. at where that think pretty I good we're our about our based at and it. expectations with and we're

as team, appreciate always. Aaron, the Jonathan, time and

you. Thank

Thank you. Instructions]. [Operator

Capital line of Northland comes question Markets. with Gibas Greg the next Our from

Please Your open. line ahead. go is

questions. [Multiple Hi, the Jonathan for taking Aaron, morning, thanks Speakers]. and good

Just sentiments most? level call of the maybe QX and what has earnings maybe maybe on changed kind changed it's wondering the factor of high kind relative your how to

more look, in Yeah Flatbed before. a mean, it's think little I ray, bit I softening specifically did than a we saw we

flat we're up. now said standpoint, I up modestly an saying modestly we we'd to think EBITDA be, from

call. that on a couple So to think of if the probably within quantify you may last I within had -- a where we have of “guided”, percent

I optimistic, on that. to it's we're not quarter. we last about But good that delta, meaningfully of this we has of different little kind where the think I'm year. what we've a stepped highlighted a talked be Flatbed So bit mitigates but, think to have going would back some just changed, the I still

I regard that all on a with deleveraging priorities strategic is to to at all plan or accelerated change the And reflective maybe in changing kind result was that those kind in XXXX, M&A of as comments guess, your commitment along? Sure. expectations then changing rates of of of or

vocal No, about last balance of sheet for of the our I I strength mean, pretty the couple now. been think years bolstering we've

Daseke, we opportunities, namely opportunistic, was which think created and certain very I market thought the the of very Mr. attractive. buyout that

came one previously we had kind the priority share so of that million staged as repurchase. And that we when announced about, $XX an opportunity

like feel a always spot we our ended in good stated been one that's we So, there, of but priorities. directionally up

when through -- mean, -- be when absolutely you our absolutely things year now, an you've going that cash think the look incremental I XX through of I you cost you expense. to this or ignore debt. of it's look cash million so incremental can't

So Daseke we table. we weather peers. comfortable to go think, around again, to can't valuation need look do from take that to table the able of and ignore to that a we that be to but disadvantaged adverse what to to things I certain be peers, look us going kind at consistent things leverage and storms, our at more continue our standpoint shareholders Certain, a get I around do And valuation continues that the off our is relative our theme. off to think

in to we an And so doing some move we like the pay XXXX we're, did of feedback front our now as debt. M&A of And -- debt. share And, that net in so fund incremental so Jason pipeline XXXX have make in about, feel have share down needle. even and the talked pretty is us meaningful with that we We of a repurchase open we light massive wouldn't repaying market repurchase, priority debt. now can doesn't a sense, really it

to incremental cash than with but debt not about and rest half still two and equity. leverage debt, in and funding think cash the a terms Again, more acquisitions incremental with one as, that, look of or

want I say equity you for we're with We debt. the a half still cash don't leverage. but meaningful and of think we pay that half pipeline runway Let and those for me in think over front cash issue say us have in allow we equity. still going plenty have want to to to acquisition do cash, I of today to left have down

the now Certainly that. things a think demonstrated execution, We now to our take from should its we're company, discount And strategic and see that slowly you're margins. for to going share performance. are LP to off next re-shifting drivers of on really through will improve potential transformational to we've the continue we repurchase. affected we at on it's leverage. of looking really trade table investors our focusing and going that we give massive benefit continued current to margins. a consistently look excuses We've we're So initiatives, We've investors, this And leverage look peers. on delivered more go, the to at financial cycle,

So that's the plan.

Great, the purchases? of of side Wondering new very the you timing outlook the supply on the discuss maybe could your market on kind if of equipment helpful. and just update

Sure, our on respect so, look -- -- supply, our are you to referring industry or specifically with supply just supply? to plus industry

and just question this new maybe then the equipment on of part Speakers] purchases? [Multiple of the year the first timing, update

hit ladder first. first, I'll the so the Yeah,

So season, make new We're peak end we we utilize looking that new our that us it, it, for equipment can mobilize during to front loaded. is and of purchases sure kind have which our QX. QX so equipment

their front in lot versus of equipment busy spend who a QX, and season. in CAPEX on the of are QX So guys drive slanted focused disproportionately that QX is the having to

noticed about said, in year, QX this So bit out trying little QX little our in see mean, on be We're it's a we and smooth of we CAPEX. it the so you million bit also the for a to so different slide, XX% going us. typically, if XX XX also QX. QX. CAPEX rollover in might that I had door That or we and to XX

So delays, is by all get delivery and XXXX million, didn't be in was to massive issues a spin out OEMs. XX projected QX the supply XXXX door. number which chain the CAPEX our of We because that QX

over of into QX. part spilling that's So mostly QX a and

on extra our into an total baked going the million door cycle, have to XXX that and out though. is CAPEX cycle QX of CAPEX we XXXX top QX So the $XX of normal replacement XXX normal in

relocations week. mentioned mean, seeing to XXXX per I to carrier FMCSA I XXXX Bert, authorities data, of look, it we're supply, on then massive net And based carriers

the that they're for If normal higher down which a you than year-over-year. look is [indiscernible] data of sequentially XX%, January, at little some orders

our down So lot giving. XXXX increase quite the Doesn't peers with jive they're of XX%. in CAPEX guides January January, are a that to

drivers people visibility signing sure anything are until a owner am to we're little into bit So seeing destruction demand destruction, making more destruction. I look have like. destruction, is already the OEMs. QX optimistic. not there's saying But leave But already demand just sorry, seeing allocations supply I cautiously they're from they the market. keep I operator We're think going seeing -- drivers, capacity again, to the what I being think up LP They're

point. bottom We are rates the upside closer do bottom. more at think that there's downside the the this at to that And than or

kind a few of that that peak think, basis XX%. trough people up rates, probably you flat an I adjusted offseason have XXXX those peak at definitely, XXXX say look we're inflation where offseason you peak, at offseason of kind rates to peak rates this are I'll XXXX on acknowledged say XXXX look both if about of rates, peak to look

it's CAGR in a at XX% those rate rate look you about that XX% If say and so increases. and three so over years CAGR,

okay, X.X% are so increases are we've to you seen saying out guys guys year Historically, Year well and up. CPI massively tracked a year. -- rate those in about you

maybe to of inflation probably to the counterpoint a the inflation that that is, flat If if counterpoint I your even rates adjust, credible those lot down. were think that, to adjusts. is

if look you XX prices wages at increasing having If nearly driver doubled, percent. diesel at you plus look

things an If like adjusted kind rates basis, real truly of things you or maintenance adjust a to adjust get growth. lubricants, XX%, based inflation you that, on and you like at you -- costs XX% tires to rate look increasing

I flat to think down. we're

got you're to going costs, of do, blow up you've side for back. to shippers. embedded supply of walk equation you're that the think I that if your a the simply going not bunch you And So

optimistic we're strong to with be XXXX. really stabilize, again So, starting good to a cautiously we think is XXXX in and that that things going are rebound

very it, much. Thanks Got helpful. so

our you please. Thank for moment and next question, one

the from Ryan Sigdahl Craig-Hallum. of line Our next comes question with

open. is Please line Your go ahead.

guys. morning, Good

year, right is kind Just of of then because bit this look including year than XXXX. the last million one was guys CAPEX, CAPEX that years this million more couple and maintenance XXX do think you costs level finance point. at for I at the over DNA about XXish all in little What me if maintenance, past a

baked maintenance equipment curious XX to the And are fully purchases, we number you confident right generating XXX is? how CAPEX? free flow, all capex of million Again, free So secondly, that what as flow? about cash in cash inclusive then think

Ryan. thanks, Yeah,

on talk question, we'll CAPEX. your a is So about which the little bit first maintenance

year guide our this for which XXX of XXX, is so debt And proceeds. to includes net

then transformational to We're so X million renewable event, CAPEX. And for got is good million specialized this position of we've lightening some of up trailers, a for got and pull so forward, about for can CAPEX XX buying X we that way energy about the we're our one year million to we've think a verticals, in about right be our one-time trailers vertical. our to

the for We're And CAPEX where pretty happy trucks at. to ways are with our one this is so year is bit We measure those on us. a of little a miles. of down think

half two so we're two mileage two a and And or a half, to bases. on and and years a times, half a two

truck XXX outlook million for count we that of current overall how And an profile XXX our pretty on number kind and outlook happy where piece fleet probably is. given of we're it. is our That's million with think replacement, So outlet about perspective. to

cash free Speakers] flow. [Multiple

if you and interest CAPEX dividends, think baked about you of confident free expense, are and be going it back recurring Guess out XXX call you this after expense, year? cash how of tax flow million the generation So preferred maintenance it's to kind everything higher fully etc.

with that. job sheet our confident a very management. feel good we on mean, doing balance I Yeah, We're

I very cash we're cash got but the overall, think mentioned. our with there and flow opportunities cycle, on you we at comfortable where numbers that feel we've conversion

pay a XX% philosophically, of looking equipment. XX% equipment XX% still we're Yeah, on And cash financed we're so split, that kind still right. at XX% --

hasn't as loans, equipment much the debt You as gone the spread know, on loan and cost debt. our term obviously, the the of equipment up

that'll So We versus equipment it's we cash still way growth in think of near the optionality. that debt. a with FUND our that create and return more of at better least probably cash do to think and can kind the we prudent there's CAPEX, cost for rather that outsized preserve we'd things term

least philosophy today. So at as now it that's stands our

Good guys. thanks, luck. Alright,

you. Thank

turn Thank to Jonathan remarks. the And for like I conference back closing to would you. over Shepko

the I'd XXXX XXXX Slide and and final Daseke close Michelle. call thoughts you, Thank like on some opportunity on performance for to today's our XX, with beyond.

delivered As EBITDA. adjusted year the consecutive record market growth leading servicer solid to complex of end we third revenue industrial markets, and

provide needs that the includes to commitment a XXXX to across with will breadth cycles. of a Our unique business support fleet with our of expansive resilient plus geographic financial and unique growth. serves customers a with portfolio strength to strategic dozen drivers expand model growth more the markets Large non diverse correlated diversified than industrial end multiple that and verticals, industry continue and resilience optionality to that over support us

and Thank relying accelerate business execution our strategic We with to a on our in current our flow goals. effect the vector strong goal outperformance to committed over company, to XXXX, cycle on our business. our members, and enable we our team an share a free generate will With expectations to improvement challenging initially in the our earnings sheet, flat deleveraging ownership our fortress for us immediately cash continuous that backdrop, build generation to for a shareholders positioned increased remain option accretive when and flow within into expanding growth levels, are confidence performance to repurchase, which committed This changing the of to in We We our economic continuing opportunity you your to and an our in today. balance call. XXXX of strong And time year profile we transportation for industry. perspective believe the even to concludes our providing results. cash QX focus midst earnings foundation well outsized inflects. are record intense XXXX full as attractive low single funneled logistics and digit

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

You disconnect. may now