Dynamex Inc., a provider of same-day delivery and logistics services in the United States and Canada, on Wednesday, March 4, announced net income of $2.3 million for its fiscal year 2009 second quarter compared to $3.4 million in the prior year. The current quarter includes an $800,000 increase in the reserve for doubtful accounts, one-time currency gains of $215,000 and a U.S. tax benefit of $140,000 due to a change in the effective tax rate. The company said the current quarter also was impacted negatively by the weaker Canadian dollar that reduced net income by about $345,000.
Sales were $98 million, down 12.9 percent; the company said the lower U.S./Canadian dollar exchange rate accounts for about 7.3 percent of the decline, while reduced fuel surcharges account for about 2.9 percent. Operating income declined 39.5 percent.
“Our business performed very well during the second quarter despite the ongoing challenges in the economy,” said James Welch, president and chief executive officer of Dallas-based Dynamex. “Our core sales have been relatively stable, which I believe is a very good indicator of our ability to adapt and perform well in any operating environment. We continue to be very well positioned in our market and with our customers, and while the current environment remains challenging, it is also creating opportunities for our business, as many smaller carriers do not have the financial strength to continue to do business.”
Welch said Dynamex is continuing to invest in its sales force to leverage these opportunities and will be increasing its size during fiscal 2009. “These costs are reflected in our current outlook, yet we will not realize the full benefit of this investment until fiscal 2010,” he said. “Given the current economic challenges, which are forecast to continue in the near term, we believe it is fiscally responsible to increase our reserve for doubtful accounts. This decision is not attributable to any particular customers, but rather the fact that the economy is providing challenges to many of our customers across the board.”
Welch said that Dynamex is pleased overall with its market position and current business trends. “We have suspended our share repurchase program to be more aggressive with acquisitions, as the current environment is creating more attractive opportunities to expand our business,” he said. “With our debt-free position, we certainly have the financial strength to pursue attractive acquisition opportunities.”