Dynamex Announces Second Quarter Fiscal Year 2008 Results.Second Quarter Highlights: * Sales increase 10.9% to $112 million. * Gross margin improvement fuels 25% increase in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . * Five new franchise locations signed. * Company affirms FY 2008 outlook of $1.45 to $1.55 earnings per share. DALLAS -- Dynamex Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DDMX), the 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, today announced net income of $3.4 million or $0.33 fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per share for the FY 2008 second quarter compared to $3.7 million or $0.35 per fully diluted share in the prior year. The prior year quarter includes a one-time, after tax benefit of $1.0 million from interest and foreign exchange gains from the resolution of prior year cross-border transfer pricing Transfer pricing refers to the pricing of goods and services within a multi-divisional organization, particularly in regard to cross-border transactions. For example, goods from the production division may be sold to the marketing division, or goods from a parent company may be issues between Canada and the U.S. Excluding this one-time benefit, last year's net income would have been $2.8 million or $0.26 per fully diluted share. Sales increased 10.9% to $112 million this quarter compared to the prior year. The exchange rate between the Canadian dollar 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 and the U.S. dollar was approximately 16% higher this quarter than the same quarter last year. The Company estimates that higher fuel surcharges account for approximately 2.7% of the increase in sales. The core growth rate, the rate excluding the impact of the stronger Canadian dollar and higher fuel surcharges, was approximately 2.2%. The core growth rate was negatively impacted by one and a half less business days this year due to the Christmas and New Year's holidays falling on Tuesday. On a sales per day basis, the core growth rate was 4.9%. The prior year quarter includes approximately $2.0 million in sales for services provided on an interim basis to one customer in Canada. Excluding those sales, the core growth rate per day was approximately 7.0%. Selling, general and administrative ("SG&A") expenses increased 11.7% to $23.9 million compared to the same quarter last year. As a percentage of sales, SG & A expenses were 21.3% in the current year compared to 21.2% in the prior year quarter. The current year percentage includes the impact of one and one half less business days than the prior year. Normal wage increases as well as additional personnel required to manage and operate new business started over the last year contributed to the increase in SG&A expenses. As the core growth rate accelerates above the current level, management expects to realize additional leverage from its relatively fixed cost infrastructure. Operating income increased 25% compared to the prior year quarter on a 10.9% increase in sales and a reduction in cost of sales from 74.1% last year to 73.3% in the current year. Purchased transportation costs, the largest component of cost of sales represented 65.7% of sales in the current year quarter, compared to 65.5% in the prior year reflecting the change in business mix as on demand sales declined slightly as a percentage of total sales. Other direct cost of sales declined from 8.6% last year to 7.6% in the current year quarter. Income tax expense was $2.0 million, 36.6% of income before taxes in the current year quarter compared to $2.0 million, 34.8% of income before taxes in the prior year. The current year benefited from the reduction in the 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. tax rate. The prior year rate was impacted by the settlement of cross border transfer pricing issues. We expect the effective tax rate to be in the 37% to 38% range for the remainder of the 2008 fiscal year. Second Quarter Highlights "The second quarter was another positive period for our business," said Dynamex Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Rick McClelland. "Top line growth was 10.9% while earnings per share grew 30% excluding the year ago one-time benefit. We expect year-over-year sales growth for the remainder of the 2008 fiscal year to be in the 10% to 12% range. "The higher costs associated with the unprecedented new business activity and delivery model changes we experienced in fiscal 2007 have also normalized and are now providing the bottom-line benefits we expected," McClelland continued. "During the quarter, we continued to expand our franchise program adding five quality locations in the United States. New business activity remains strong and we continue to focus on expanding relationships with our existing customer base. The financial benefits of our outsourced distribution model versus running an in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. distribution fleet becomes more compelling to potential customers given the current economic conditions. And as the economy has softened soft·en v. soft·ened, soft·en·ing, soft·ens v.tr. 1. To make soft or softer. 2. To undermine or reduce the strength, morale, or resistance of. 3. , we have also seen an increase in the number of opportunities to acquire customer lists. "Our outlook remains positive for the remainder of the year," concluded McClelland. "Our balance sheet is extremely strong with zero long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Margins remain within our targeted range and both our top and bottom lines continue to grow. We continue to believe we have a significant opportunity for continued growth and profitability that will result in solid returns for our shareholders." Long-Term Debt Long-term debt was zero at January 31, 2008. Cash flow generated from operations was sufficient to fund operations and capital expenditures. Margins The gross margin was 26.7% of sales in the current quarter, in-line with our stated target range for FY 2008 of 26.5% to 27.0%, and higher than the 25.9% in the same quarter last year. Management expects the gross margin percentage for each of the remaining quarters of this fiscal year will be above the comparable quarters in the prior year. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Cash Flow from Operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses Net cash provided by operating activities was $1.0 million compared to $6.2 million in the prior year. The reduction in cash provided by operating activities this year is principally attributable to higher cash taxes, the increase in working capital to finance the increase in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and the payment in August 2007 for stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. transactions consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. in FY 2007 while the prior year included the benefit of lessor One who rents real property or Personal Property to another. A lessor of land is a landlord. Cross-references Landlord and Tenant. lessor n. the owner of real property who rents it to a lessee pursuant to a written lease. financed leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. and higher rent abatements. The increase in accounts receivable, although higher than the FY 2007 yearend balance after considering the growth in sales and changes in the Canadian dollar, is in line with the increase for the same period last year. We believe this is temporary and that days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). at the end of our next quarter will be more in-line with the prior year. Depreciation and Amortization Depreciation and amortization ("D&A") increased to $702,000 in this quarter from $596,000 in the second quarter last year due principally to the higher level of capital additions in FY 2007, due, in large part, to lessor-financed leasehold improvements last year related to the lease for the corporate headquarters in Dallas. As a percent of sales, D&A was 0.6%, unchanged from the prior year period. Interest Expense Interest expense for the three months ended October 31, 2007 was $54,000, $62,000 below the prior year period. The current year had a lower average level of outstanding debt than the prior year. Outlook The following outlook for FY 2008 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. The Company expects year-over-year sales growth of between 10% and 12% for FY 2008. The Company continues to expect FY 2008 net income to range from $1.45 to $1.55 per fully diluted share. Investor Call The Company will host an investor conference call on Thursday, March 6, 2008 at 10:00 a.m. Central Standard Time. All interested parties may access the call Toll-Free at 1-877-407-9039. A participant will need the following information to access the conference call: Company name - "Dynamex". A telephone replay of the conference call will be available through March 13, 2008 at, Toll-Free, 1-877-660-6853, enter Account Number 3055 and Conference ID Number 273171. The conference call will also be available on the Internet through Thomson's website, located at www.earnings.com, and the link is also available through the Company's website at www.dynamex.com. To listen to the live call, please go to the website 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 30 days. Dynamex is the 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 services package, dxNow[TM], is available at www.dynamex.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 effect of changing economic conditions, acquisition strategy, competition, foreign exchange, the ability to meet the terms of current borrowing arrangements, 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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