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Driver Dividends - Addison Based Company Goes Public

 
 

Story courtesy of Cheryl Hall

Four months ago, Addison businessman Don Daseke took his transportation company public for typical reasons: He needed money to finance his rapid expansion plan.

But one motivation topped all others: Daseke wanted to give his drivers a piece of the action.

Daseke (pronounced dass-key) has made good on a promise he made to himself when he founded his company nine years ago by rolling out a stock giveaway plan for his drivers and behind-the-scenes staffers.

“That’s been my dream, my objective,” says the 77-year-old founder, CEO and major shareholder. “We went public so that everyone could be an owner of Daseke.”

And by “everyone,” Daseke means drivers in particular.

North America’s largest owner of open-deck, heavy-hauling equipment transports such enormous cargo as Triton submarines, aircraft wings and 180-foot-long wind-turbine blades. It uses 3,500 trucks and 7,300 open-deck and specialized trailers.

Boeing, Caterpillar, General Electric, Nucor and Georgia Pacific are among its marquee customers.

Daseke personally owns 15 million shares of the company he founded in 2008 that have a current market value of slightly more than $150 million. But under terms of the IPO, Daseke can’t sell any of it for three years and has to stay put as its CEO for five.

Fine by him, he says. He has no desire to hit the road. He’s just getting started.

Gaining Ground

The now-public company posted sales of $652 million last year, up from $30 million in 2009 — primarily through consolidations. But that still represents less than 1 percent of the highly fragmented $133 billion open-deck freight industry.

Ten U.S. and one Canadian trucking companies now operate under the Daseke corporate umbrella.

Daseke wants more, much more.

His targets are well-managed companies with 200 to 1,000 trucks. Daseke says the company is in various stages of tire-kicking negotiations with 20 companies that fit that bill.

But the most daunting obstacle to his grand plan is hiring and retaining drivers.

The commercial trucking world is about 48,000 drivers short, according to industry estimates. This deficit is even more acute for flatbed long-haulers, who live a lifestyle and have physical requirements that make driving a distribution route for Target or Wal-Mart seem like a cakewalk.

“Our truck drivers have a very challenging life. Sleeping in a cab. Climbing on top of a flatbed, even when it’s raining, snowing and miserable out.

“If you’ve got a load of 45,000 pounds of building materials, you’ve got to keep it properly centered and secure, and you’ve got to be in good physical condition to handle every turn that you make.

“You’re away from home many days at a time — sometimes a week, sometimes two weeks.

“That’s the life of a flatbed trucker. And it takes a very special breed.”

Joining the team

Daseke pays its drivers $45,000 to $80,000 a year — depending on the length and difficulty of their hauls — and offers a 401(k) with a 4 percent company match and medical benefits.

Now there’s one more benefit.

Each of the 2,100 drivers who were at the company in 2016 just got 430 shares currently worth about $4,300. And 800 support staff got an unspecified number of shares. They’ll get more stock every year that they stay with the company. But the stock vests in five-year increments.

That’s the retention piece. The longer you stay, the more stock you actually put into your portfolio.

Newcomers who join the company in 2017 will qualify for a piece of this year’s allocation of about 1 million shares.

“This sends a signal to them that they’re really important to us, and they’re the heart of what we do. Without them, we don’t produce revenue.”

For drivers, it’s sorta like finding money in their jeans.

Vince Piazza, who’s been driving for 15 years — the last 2 1/2 for Daseke’s Fort Worth company — says it “feels good to be recognized and valued as more than a driver. I have always loved working at Lone Star Transportation, and this stock program is just another reason.”

And it may be the first stock market investment for some.

Among those is Melody Poe, who’s been driving for Daseke’s Smokey Point Distributing in Arlington, Wash., for about a year. While she doesn’t feel the stock bonus will affect her everyday work, she says, “It has great impact on my desire to stay with and retire from SPD.”

On the horizon

Does Don Daseke expect the stock plan to help woo companies?

“If this gets somebody’s attention, hey that works,” he says. “The companies we talk to are private companies. They can’t do this with their people. So by joining Daseke, yes, you can do this for your drivers, too.”

Some companies have given employees stock after their IPOs only to see share prices tank.

Think Container Store and Whole Foods.

The best way to keep the Wall Streeters’ confidence and therefore, share prices up, is to be a profit performer, Daseke says.

The company posted $88 million in earnings before interest, depreciation and amortization for 2016. Earnings would have been $101 million if results from two completed acquisitions had been included.

If things continue to go as planned, Daseke says EBITDA will be running at a $140 million annual clip by year’s end and a $200 million annual pace by the end of 2019.

Fifty years ago, Daseke paid about $1,000 for 30 shares of IBM stock through an employee stock purchase plan. He still owns every share — now worth a total of five grand.

But those shares made the 27-year-old Big Blue salesman feel like an owner.

“That’s what we’re trying to get across to all of our people,” he says. “This sends a signal to them that they’re really important to us and they’re the heart of what we do. Without them, we don’t produce revenue.”

Allen Rush, who has been driving for Hornady Transportation in Monroeville, Ala., for 26 years, has gotten the message.

“I have always been a dedicated worker,” Rush says. “But having ownership makes me even more of a committed employee.”

www.daseke.com

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