Dynamex posts flat 2Q net income

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Dynamex Inc., a provider of same-day delivery and logistics services in the United States and Canada, on Wednesday, March 3, announced net income of $2.2 million for the fiscal year second quarter compared to net income of $2.3 million for the fiscal year 2009 second quarter. The current year quarter includes a pretax restructuring charge of $282,000, $192,000 after-tax, related to the closure of the Canadian administrative office.

“Despite the continuing macroeconomic headwinds, we are pleased to report sales that were slightly better than last year’s results,” said James L. Welch, president and chief executive officer of Dynamex, based in Dallas. “Importantly, the fiscal second quarter represented the second consecutive quarter in which we increased core sales per day. During the quarter, we continued our efforts to optimize our cost structure and position the company for a return to more historical levels of demand. To that end, we expect core sales in our fiscal third quarter to be above both the current quarter and last year’s third quarter. Moreover, while the near-term outlook for the broader economy remains uncertain, we are effectively managing through the recessionary environment and continue to position Dynamex for long-term growth.”

Sales were $98 million, representing a slight year-over-year increase due principally to a stronger Canadian dollar and higher fuel surcharges that were offset, in part, by lower core sales. Core sales per day (sales excluding changes in fuel surcharge and foreign exchange), declined 6.1 percent. Core sales per day declined about 7.0 percent in Canada and 5.6 percent in the United States. The stronger Canadian dollar increased sales about $5.2 million, and fuel surcharges were about $0.4 million higher.

Operating income was $3.4 million, an increase of 7.3 percent, including a restructuring charge of $282,000 that reduced operating income 7.4 percent. Purchased transportation costs, the largest component of operating expenses, represented 64.3 percent of sales compared to 63.1 percent, attributable to the change in business mix and the impact of a more competitive pricing environment.

Long-term debt was zero at Jan. 31, 2010, and cash flow generated from operations was sufficient to fund operations and capital expenditures. “Our debt-free balance sheet, variable cost structure and cash flow from operations position us well to continue to run our business effectively and navigate through the current economic climate,” Welch said. “Further, we are confident in our ability to find the right balance between our ongoing cost reduction efforts and continued investment to fuel growth.”

Net cash provided by operating activities was $3.6 million for the six months ended Jan, 31, 2010, compared to cash used in operating activities of $1.7 million in the prior-year period. The increase was attributable principally to lower working capital requirements, including $4.9 million this quarter compared to $11.0 million in the prior-year quarter due to the timing of payments and cash receipts from customers. The company had cash and cash equivalents of $12.6 million at Jan. 31, 2010.