Dynamex Announces Third Quarter Fiscal Year 2007 Results.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): Third Quarter Highlights: * Sales increase 19.1% to $104 million. * Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increase 12.2% to $0.32 per share. * Four new franchise locations signed this quarter, total of 26 locations throughout Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. . * Repurchased 36,100 shares during quarter; repurchased 47,900 shares in May. Dynamex Inc. (NASDAQ: 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 $3.5 million or $0.32 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 2007 third quarter compared to $3.2 million or $0.29 per fully diluted share in the prior year. Sales were $104 million this quarter, 19.1% above the prior year quarter. 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 slightly lower this quarter than the same quarter last year, which had the effect of reducing sales by approximately 0.3%. The Company estimates that higher fuel surcharges increased sales this quarter by approximately 0.2% compared to the prior year resulting in an organic growth rate, the rate excluding the impact of foreign exchange and fuel surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. , of approximately 19.2%. The current quarter includes sales for services provided on an interim basis to one customer in Canada of approximately $4.0 million. We expect additional sales for this interim service to total approximately $2.0 million before the service ends in the fourth quarter of this fiscal year. 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. was $5.4 million, $126,000 above the prior year quarter. As a percentage of sales, operating income was 5.3% this quarter, below the 6.1% in the same quarter last year but higher than the 4.1% in the second quarter of this fiscal year. Purchased transportation costs increased to 65.2% of sales this quarter compared to 64.7% last year, principally due to the decline in on-demand sales as a percentage of total sales. Although on-demand sales increased slightly this quarter compared to the prior year, it represented only 31.2% of total sales compared to 36.7% last year, due to the 29% increase in distribution and dedicated sales. The increase in other cost of sales from 7.1% in last year's quarter to 8.4% this quarter was due principally to additional warehouse personnel, equipment and space required to support new business added this fiscal year. Selling, general and administrative ("SG&A") expenses increased 14.2% to $21.3 million in the current year quarter compared to the same quarter last year. As a percentage of sales, SG&A expenses were 20.6% in current year compared to 21.5% in the prior year. Normal wage increases as well as additional personnel required to manage and operate new business over the last nine months contributed to the increase in SG&A expenses. We also added additional engineering capacity to optimize optimize - optimisation routing, enhance driver economics and reduce costs. Income tax expense was $2.0 million, 35.8% of income before taxes in the current year quarter compared to $2.1 million, 39.5% of income before taxes in the prior year. The lower quarterly tax rate this quarter, compared to the prior year, results principally from a positive tax adjustment of approximately $80,000 this year and the higher percentage of taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. generated in Canada in the current period compared to the prior year, which has a lower income tax rate than the U.S. Third Quarter Highlights "I am pleased with our third quarter performance as we continued to deliver strong top and bottom line growth from the year ago period," 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. "Our focus on enhancing our gross margin relative to recently closed business continued during the quarter and increased our overall gross margin from 25.9% in the second fiscal quarter to 26.4% in the third fiscal quarter. The higher margin resulted in a higher operating income ratio versus the second quarter. We expect gross margin to further increase during the fourth fiscal quarter. During the quarter, we saw a gain on the SG&A front as well. As a percentage of sales, SG&A expenses were 20.6% in current year compared to 21.5% in the prior year. "We are encouraged by the continued interest in our franchising program," McClelland continued. "We presented our value proposition at the annual industry convention in May and received a very positive response. We added four new franchise locations this quarter and now have 26 located throughout the United States and Canada. "Our outlook for the business remains strong and we remain focused on top and bottom line growth," McClelland added. "Our financial performance continues to be solid and with no debt; we have a very strong balance sheet and our cash flow is strong and steady. During the quarter and into May, we used our excess cash to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 84,000 shares of our common stock as we remain committed to improving shareholder value. "With our strong financial position, we believe it is an opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. time to focus on investing for the future," concluded McClelland. "With that in mind, we continued to make important progress on the technology front. The development and ongoing enhancements to our scanning, track and trace capability is being well received by our existing and prospective clients. This technology is an important point of differentiation that will continue to enhance our competitive position. We also continued to invest in our engineering group during the quarter. Our focus here is ongoing improvement to speed of service, overall service quality and our cost structure." 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. The Company had zero bank debt at April 30, 2007 compared to $900,000 at July 31, 2006 and $2.4 million at April 30, 2006. Management expects bank debt to be zero at the end of the current fiscal year. 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 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 $7.6 million compared to $7.9 million in the prior year. The year-over-year decline is primarily due to 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 . The $10.5 million increase in accounts receivable this year is attributable to the 19.1% increase in sales (approximately $7.0 million) with the remaining increase generally due to temporary delays in collecting some of the new accounts. We expect that the percentage increase in accounts receivable will be more in line with the increase in sales by the end of the current fiscal year. Depreciation and Amortization Depreciation and amortization ("D&A") increased to $554,000 in this quarter from $523,000 in the third quarter last year due principally to the capital additions and the amortization 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. . As a percent of sales, D&A was 0.5%, slightly lower than the prior year period. Interest Expense Interest expense for the three months ended April 30, 2007 was $32,000, slightly below the prior year period. Management expects interest expense to remain at current levels in the FY 2007 fourth quarter. Stock Repurchase Plan stock repurchase plan 1. See buyback. 2. See self-tender. During the current quarter of this fiscal year, the Company purchased 36,100 shares of Dynamex common stock at an average price of $25.69 per share. In May 2007, the Company purchased an additional 47,900 shares at an average price of $26.03 per share. Management intends to continue to purchase shares from time to time using available cash or temporary borrowings from the bank facility. Outlook The following outlook for FY 2007 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 FY 2007 year-over-year sales growth to be approximately 15%. The Company expects the gross profit percentage to strengthen in the fourth quarter of FY 2007 compared to the current quarter as additional efficiencies related to new business startups are realized. Income taxes are expected to be in the 38% range of income before taxes for the fourth quarter of FY 2007. The Company expects FY 2007 net income to range from $1.34 to $1.39 per fully diluted share. Investor Call The Company will host an investor conference call on Thursday, June 7, 2007 at 10:00 a.m. Central 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 June 14, 2007 at, Toll-Free, 1-877-660-6853, enter Account Number 3055 and Conference ID Number 242485. The conference call will also be available on the Internet through Thomson's website, located at www.earnings.com, and the link is 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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