Dynamex Announces First Quarter FY2001 EPS Of $0.05.Business Editors DALLAS--(BUSINESS WIRE)--Dec. 6, 2000 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Equal to $4.4 Million or 6.8% of Revenues Sales Management Sales Management Role and Goal Importance of sales management is critical for any commercial organization. Expanding business in not possible without increasing sales volumes, and effective sales management goal is to organize sales team work in such a manner that ensures a Reorganization Completed Dynamex Inc. (AMEX AMEX See: American Stock Exchange :DDN (Defense Data Network) An Internet-based global communications network created by the U.S. Department of Defense. In April 1996, users were moved to the more modern Defense Information Systems Network (DISN) made up of NIPRnet (Non-classified IP Router Network) and ), a leading provider of same-day delivery and logistics services in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , today announced first quarter fiscal year 2001 net income increased 23% from the prior year period to $498,000 or $0.05 per share. First quarter sales increased 3.3% from the prior year period to $64.8 million on one additional business day. EBITDA in the first quarter 2001 was 6.8% of sales or $4.4 million, unchanged from the first quarter 2000, but up from 6.5% of sales in the fourth quarter 2000. First Quarter Fiscal Year 2001 Highlights: -- Adjusted Sales Per Day(1) increased 3.4% -- Constant F/X Sales Per Day increased 2.0% -- Consolidated Sales Per Day increased 1.8% -- Gross Margin 30.9% vs. 30.6% in Q4 2000 and 32.6% in Q1 2000 -- EBITDA Margin 6.8% vs. 6.6%(2)(3) in Q4 2000 and 7.0% in Q1 2000 -- Operating Income Margin 3.7% vs. 3.0%(2)(3) in Q4 2000 and 3.2% in Q1 2000 -- Cash from Operations(4) equal to $3.0 million (1) Adjusted Sales Per Day excludes the following locations: Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Prairies prairies, generally level, originally grass-covered and treeless plains of North America, stretching from W Ohio through Indiana, Illinois, and Iowa to the Great Plains region. , Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. and Hartford Hartford, city (1990 pop. 139,739), state capital, Hartford co., central Conn., on the west bank of the Connecticut River; settled as Newtown 1635–36 on the site of a Dutch trading post (1633; abandoned 1654), inc. 1784. . The excluded branches' revenues equal approximately 9% of total revenues. (2) Excludes non-recurring cost of approximately $450,000 associated with temporary accounting assistance in the audit and re-audit process and for legal costs associated with the shareholder lawsuit lawsuit: see procedure; tort. . (3) Excludes $2.3 million charge related to preliminary agreement to settle the pending shareholder class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax . (4) Cash flow from operating activities before changes in current operating assets Operating Assets Another term for working capital. and liabilities. Rick McClelland McClelland is the surname of:
The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: of document work. The (3-Dimensional) on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front market, distribution and vehicle outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. markets remain strong. We expect to see our new sales management team capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this opportunity, especially with existing clients that want to take advantage of our full service menu and the geographic scope of our company in the United States and Canada. "The changes in our sales management structure include: -- The placement of three Regional Sales Managers sales manager n → gerente m/f de ventas sales manager n → directeur commercial sales manager sale n → in the United States. The focus of this group is to (a) strategically deploy additional sale reps and (b) increase production from the field sales organization. -- Adding a Telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. Group Manager to oversee and expand our telemarketing operation. Telemarketers maintain and expand our relationships with small-to-mid size accounts and develop new accounts. -- Hiring a Director of National Accounts to oversee a group of U.S.-based National Accounts sales executives that is similar to our structure in Canada. "In addition to our strong commitment to growth, we continue to be very focused on driver income quality and their general work environment. We need to be effective at driver retention and recruitment in order to have the necessary capacity to support our sales initiatives and in order to achieve our service quality goals. Service quality also has a strong bearing on our image in the marketplace. "The priorities for our branch operations this year are: Growth -- Service -- Capacity -- Image. "I believe that Dynamex has never been in a stronger market position vs. our national competitors. We have great coverage, a strong service menu and our cost structure is sound. We intend to continue to stay very focused on growth, capacity and service and thereby leverage our infrastructure in order to increase EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. . We also intend to be responsive to any other opportunities that can enhance shareholder value." Sales Per Day Growth Sales Per Day in the first quarter was impacted by (a) one additional business day, (b) a negative exchange rate effect, (c) the decision to exit approximately $4 million annually of marginally profitable business in several locations in Canada, and (d) sales increases in the Western U.S. and Canada that were offset by a sales per day decline in the Eastern U.S. One extra business day negatively affects accounts that are billed a flat monthly fee regardless of working days. Monthly billed accounts normally are associated with scheduled and distribution and other specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. service revenues. Excluding the exchange rate effect, Sales Per Day increased 2.0% in the first quarter and Adjusted Sales Per Day, as discussed in previous press releases, increased 3.4% in the first quarter. Over the last twelve months, management has discussed the Company's Adjusted Sales Per Day that excludes branches in the Canadian Prairies The Canadian prairies is a large area of flat sedimentary land stretching throughout western Canada between the Canadian Shield in the east and the Canadian Rockies. The Canadian prairies – the portion of the Great Plains landform that supports various grasses and shrubs , Boston, Hartford and Dallas. The effect of the exclusion has declined as a full comparable time period has passed in most of these branches. Adjusted Sales Per Day increased 3.4% in the first quarter overall, and 2.9% in the U.S. and 4.5% in Canada. On an unadjusted basis Unadjusted Basis A basis used for depreciation purposes. Unadjusted basis uses the original cost of property or equipment without regard to salvage value. Notes: This method of calculating depreciation is used for ACRS and MACRS. , Sales Per Day in the Company's U.S. operations increased 0.8% in the first quarter over the prior year period. Sales Per Day in the Company's Canadian operations increased 3.6% in U.S. dollars in the first quarter in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the decision to exit the $4 million contract. Excluding the negative exchange rate effect, Canadian Sales Per Day increased 4.4% in the quarter. The Canadian Sales Per Day continued their positive momentum established in the fourth quarter 2000. Excluding the exited $4 million contract, Canadian Sales Per Day increased 6.4% in U.S. dollars and 7.2% in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Margins and Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Gross margins increased slightly in the first quarter 2001 versus the fourth quarter 2000, but declined from the prior year period as a result of the continuing shift in business mix to a higher percentage of scheduled distribution and dedicated fleet revenues for regional and national accounts as opposed to on-demand revenues. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. the change in business mix combined with continued expense controls and infrastructure synergies resulted in lower SG&A expenses as a percent of sales in the first quarter 2001 versus the prior year periods. Scheduled distribution and dedicated fleet revenues generally have lower administrative requirements than on-demand revenues. Depreciation and Amortization Depreciation and amortization in the first quarter 2001 decreased to $2.1 million from $2.3 million in the first quarter 2000. As a percent of sales D&A decreased to 3.1% from 3.7%. This decrease is attributable to the reduction in amortization of covenants not-to-compete that are fully amortized after three years. Since most of the Company's acquisitions occurred in fiscal years 1996 through 1998, all covenants not-to-compete will be fully amortized in fiscal year 2001. In addition certain property and equipment acquired through acquisitions, although still in use, has been fully depreciated Fully depreciated An asset that has already been charged with the maximum amount of depreciation allowed by the IRS for accounting purposes. fully depreciated Of or relating to a fixed asset that has been depreciated to a book value of zero. . Interest Expense Interest expense decreased 29% from the fourth quarter 2000 to $1.3 million as a result of the amendment to the bank facility effective July July: see month. 31, 2000 that lowered the margin over Prime charged by the banks by 1.25% as well as less average outstanding debt. However, interest expense for the three months ended October October: see month. 31, 2000 increased $171,000 from the same period ended in 1999. This increase primarily results from a 0.25% increase in the margin over Prime and the 1.50% increase in the Prime lending rate The lowest rate of interest that a financial institution, such as a bank, charges its best customers, usually large corporations, for short-term unsecured loans. The prime lending rate is an economic indicator and is often used as a measuring point for adjusting interest over the last 18 months. Earnouts The Company reached agreement with three out of four former owners regarding overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. earnout Earnout A contractual provision stating that the seller of a business is to obtain additional future compensation based on the business achieving certain future financial goals. Notes: The financial goals are usually stated as a percentage of gross sales or earnings. payments and paid $437,000 during the first quarter to these former owners. The remaining $550,000 in liabilities were converted to two-year notes payable. An additional earnout payment of $175,000 was made in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with terms of its agreement at the end of November November: see month. . The Company intends to continue negotiation with the one remaining former owner regarding overdue earnout payments that could range from a minimum of $350,000 to a contractual maximum of $4 million. Outlook The following outlook is provided in connection with Regulation FD and to ensure that all investors continue to have equal access to information. The following outlook contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve assumptions regarding Company operations and future prospects. Caution should be taken that the actual results could differ materially from those stated or implied in this and other Company communications. For FY2001, the Company expects Total Sales Per Day growth in the 2% to 4% range on 2.5 fewer working days than FY2000. The rate is lower than the targeted 10% levels as a result of the exiting approximately $4.0 million of marginally profitable business in Canada, an anticipated moderate slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the economy, and to a lesser extent attrition of the document business, and a negative exchange rate effect. Dynamex expects gross margins in the 30.5% to 31.5% range for FY2001 as the business mix continues to shift to scheduled distribution and dedicated fleet revenues associated with regional and national accounts. Generally, the Company's on-demand services provide higher gross margins than do scheduled distribution or fleet management services because driver compensation for on-demand services is generally lower as a percentage of sales from such services. However, scheduled distribution and fleet management services generally have fewer administrative requirements related to order taking, dispatching drivers and billing. As a result of these offsetting variances, the Company's EBITDA margins should not be materially impacted by business mix in any particular period. As the Company pursues new opportunities with national accounts, management anticipates that on-demand revenues will decrease as a percentage of total sales, and therefore that gross margin may decline over-time. However, the Company expects to leverage its SG&A expenses with increased sales resulting in expanding EBITDA margins. SG&A expenses as a percent of sales is expected to continue to decline slightly each quarter versus the prior year as continued cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. and fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). are offset by increases in insurance expenses and continued system conversion expenses. EBITDA margins are expected to be in the 6.0% to 7.0% range for FY2001. The EBITDA margin will be toward the lower end of the range in the second and third quarters as a result of the fewer business days, but should expand toward 7.0% or slightly higher in the fourth quarter with 64.0 business days. Depreciation and amortization is expected to continue to decline by $50,000 to $100,000 per quarter over the next two years as acquired assets are fully depreciated and covenants not-to-compete are fully amortized. Assuming no change in the Prime rate of lending, interest expense is expected to remain relatively flat throughout the current fiscal year and decline in future years as debt is repaid. The Company's effective tax rate will remain high due to higher profits in its Canadian subsidiary than in the U.S. Management is considering proposals to reduce taxes, but the timing and effect are uncertain at this time. The Company expects to spend approximately $3.5 million for capital expenditures during the current fiscal year to complete its front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. systems conversions, continue back-end (programming) back-end - Any software performing either the final stage in a process, or a task not apparent to the user. A common usage is in a compiler. A compiler's back-end generates machine language and performs optimisations specific to the machine's architecture. Oracle implementation and upgrade 2-way mobile data devices for its drivers. The remaining $3.2 million capex for FY2001 is expected to be approximately spread evenly over the last three quarters. Net income is expected to be approximately breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations , plus or minus $0.02 per share, in the second quarter and third quarter of fiscal year 2001. Fourth quarter net income is expected to increase to $0.08 to $0.12 as a result of 2.5 more business days than in the second quarter or third quarter, increased revenues, decreased D&A, and lower interest expense. EPS also may vary slightly depending upon the issuance date of the one million shares related to the settlement of the class action lawsuit. Investor Call The Company will host an investor conference call on Thursday Thursday: see week. , December December: see month. 7, 2000, at 11:00 a.m. Eastern time at (800) 388-8975. A telephone replay of the conference call will be available for 24 hours Adv. 1. for 24 hours - without stopping; "she worked around the clock" around the clock, round the clock at 800-428-6051, Passcode 146631. The conference call also will be available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through Investor Broadcast Networks' Vcall website, located at www.vcall.com and the Company's website at www.dynamex.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those who cannot listen to the live broadcast, an internet replay will be available shortly after the call for 90 days. Dynamex is a leading provider of same-day delivery and logistics services in the United States and Canada. Additional press releases and investor relations Investor relations The process by which the corporation communicates with its investors. information as well as the Company's internet e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. services package, dxNow(TM), is available at www.dynamex.com and www.dxnow.com. This release contains forward-looking statements that involve assumptions regarding Company operations and future prospects. Although the Company believes its expectations are based on reasonable assumptions, such statements are subject to risk and uncertainty, including, among other things, the outcome of the shareholder class action and SEC inquiry, including the ability to obtain final approval of the settlement, acquisition strategy, competition, foreign exchange, and risks associated with the local delivery industry. These and other risks are mentioned from time to time in the Company's filings with the Securities and Exchange Commission. In light of such risks and uncertainties, the Company's actual results could differ materially from such forward-looking statements. The Company does not undertake any obligation to publicly release any revision to any forward-looking statements contained herein to reflect events and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events. Caution should be taken that these factors could cause the actual results to differ from those stated or implied in this and other Company communications. - Tables follow -
DYNAMEX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, July 31,
2000 2000
---------- ----------
ASSETS
CURRENT
Cash and cash equivalents $ 5,858 $ 5,600
Accounts receivable (net of allowance for
doubtful accounts of $986 and $940,
respectively) 27,674 26,887
Prepaid and other current assets 2,426 2,890
Deferred income tax 1,387 1,518
---------- ----------
TOTAL CURRENT ASSETS 37,345 36,895
Property and equipment -- net 6,677 7,225
Intangibles -- net 76,898 78,230
Deferred income taxes 2,949 3,273
Other assets 698 901
---------- ----------
TOTAL ASSETS $ 124,567 $ 126,524
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable trade $ 5,137 $ 5,517
Accrued liabilities 15,006 16,627
Current portion of long-term debt 5,491 3,729
---------- ----------
TOTAL CURRENT LIABILITIES 25,634 25,873
Long-term debt 39,128 40,928
Provision for lawsuit settlement 1,313 1,313
---------- ----------
TOTAL LIABILITIES 66,075 68,114
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock; $0.01 par value, 10,000
shares authorized; none outstanding -- --
Common stock; $0.01 par value, 50,000 shares
authorized; 10,207 and 10,207 outstanding,
respectively 102 102
Additional paid-in capital 72,759 72,759
Retained deficit (13,103) (13,601)
Unrealized foreign currency translation
adjustment (1,266) (850)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 58,492 58,410
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 124,567 $ 126,524
========== ==========
DYNAMEX INC.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended
October 31,
--------------------
2000 1999
------ ------
Sales $ 64,824 $ 62,723
Cost of sales 44,820 42,297
-------- --------
Gross profit 20,004 20,426
Selling, general and administrative
expenses 15,589 16,033
Depreciation and amortization 2,029 2,318
(Gain) loss on disposal of property
and equipment (2) 54
-------- --------
Operating income 2,388 2,021
Interest expense 1,344 1,173
Other (income) expense (45) (16)
-------- --------
Income before taxes 1,089 864
Income tax expense 591 459
-------- --------
Net income $ 498 $ 405
======== ========
Earnings per common share - basic: $ 0.05 $ 0.04
======== ========
Earnings per common share
- assuming dilution: $ 0.05 $ 0.04
======== ========
Weighted average shares:
Common shares outstanding 10,207 10,207
Adjusted common shares - assuming
exercise of stock options 10,210 10,207
Selected items as a percentage of sales
---------------------------------------
Sales 100.0% 100.0%
Cost of sales 69.1% 67.4%
-------- --------
Gross profit 30.9% 32.6%
Selling, general and administrative
expenses 24.0% 25.6%
Depreciation and amortization 3.1% 3.7%
(Gain) loss on disposal of property
and equipment 0.0% 0.1%
-------- --------
Operating income 3.7% 3.2%
EBITDA Margin 6.8% 7.0%
EBITDA 4,415 4,393
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(In thousands)
Three months ended
October 31,
----------------------
2000 1999
---- ----
OPERATING ACTIVITIES
Net income $ 498 $ 405
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 800 968
Amortization of intangible assets 1,263 1,350
Provision for losses on accounts
receivable 258 257
Deferred income taxes 209 272
(Gain) loss on disposal of property
and equipment 2 54
Changes in current operating assets
and liabilities:
Accounts receivable (1,045) (3,772)
Prepaids and other assets 464 1,227
Accounts payable and accrued
liabilities (789) (581)
------- -------
Net cash provided by operating
activities 1,660 180
------- -------
INVESTING ACTIVITIES
Payments for acquisitions (437) (104)
Purchase of property and equipment (324) (1,486)
Proceeds from sale of property and
equipment
Net proceeds from disposal of
property and equipment (4) --
------- -------
Net cash used in investing activities (765) (1,590)
======= =======
FINANCING ACTIVITIES
Principal payments on long-term debt (92) (79)
Net borrowings under line of credit (500) 3,200
Proceeds from shareholder's note -- 25
Other assets and deferred offering costs 203 31
------- -------
Net cash provided by financing
activities (389) 3,177
------- -------
EFFECT OF EXCHANGE RATES ON CASH (248) 145
------- -------
NET INCREASE (DECREASE) IN CASH 258 1,912
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 5,600 2,933
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,858 $ 4,845
======= =======
SUPPLEMENTAL DISCLOSURE ON NON-CASH
INFORMATION
Cash paid for interest $ 2,483 $ 889
======= =======
Cash paid for taxes $ 361 $ 487
======= =======
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Assets acquired, liabilities paid and
consideration paid for acquisitions
were as follows:
Fair value of net assets acquired $ 26 $ 104
Payable to former owners 411 --
------- -------
Consideration paid $ 437 $ 104
======= =======
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