Dynamex Inc. Reports Operating Results (10-Q)
Dynamex Inc. has a market cap of $139.7 million; its shares were traded at around $14.35 with a P/E ratio of 14.6 and P/S ratio of 0.4. Dynamex Inc. had an annual average earning growth of 6.6% over the past 10 years.DDMX is in the portfolios of RS Investment Management, Chuck Royce of Royce& Associates, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Net income for the three months ended April 30, 2010 was $2.6 million ($0.27 per fully diluted share) compared to $1.6 million ($0.17 per fully diluted share) for the three months ended April 30, 2009.
Sales were $104 million this quarter, representing a 12.8% year-over-year increase due principally to the stronger Canadian dollar, higher fuel surcharges and higher core sales. The stronger Canadian dollar increased sales approximately $7.1 million, fuel surcharges increased approximately $2.2 million and core sales $2.5 million higher compared to the same quarter last year. The increase in core sales (sales excluding changes in fuel surcharge and foreign exchange), was 2.7% (or 1.1% per day). Core sales-per-day this quarter were flat in Canada and increased 1.9% in the U.S., compared to last year. On a constant dollar basis (converting Canadian dollars at a fixed exchange rate), fuel surcharges increased reported sales by 2.5%. The higher exchange rate between the Canadian dollar and the U.S. dollar increased reported sales by 7.7%.
Salaries and employee benefits for the three months ended April 30, 2010 increased 3.3%, to $20.6 million from $19.9 million for the same period in the prior year. The bulk of this increase is attributable to the increase in the Canadian dollar exchange rate. On a constant dollar basis, salaries and employee benefit costs declined $0.5 million or 2.5%. Salaries and employee benefits were 19.8% of sales for the three months ended April 30, 2010, compared to 21.6% for the three months ended April 30, 2009. The decline is attributable to company initiatives including the FY 2009 fourth quarter management realignment, the closing of the Canadian administrative office and the reduction in force we made in our FY 2009 second quarter. The decline from company initiatives was offset, in part, by higher bonus and severance costs of approximately $0.6 million.
Net income for the nine months ended April 30, 2010 was $7.9 million ($0.81 per fully diluted share) compared to $7.0 million ($0.71 per fully diluted share) for the nine months ended April 30, 2009. A one-time, special payment to the current Chairman of the Board and former President and CEO in the first quarter of fiscal year 2009 of $1.0 million, net of taxes, reduced net income per fully diluted share by approximately $0.10. The current year period includes a pre-tax restructuring charge of $0.3 million, or $0.03 per fully diluted share, related to the closure of the Canadian administrative office.
Net cash used in investing activities in the nine months ended April 30, 2010 was $2.8 million, compared to $4.5 million used during the prior year due. The decrease was due to a purchase of specialized equipment to serve a specific customer in the prior year. Our cash flow from operations has been our primary source of liquidity, and we expect it to continue to be the primary source in the future. The Company does not have significant capital expenditure requirements to replace or expand the number of vehicles used in its operations because substantially all of its drivers are independent contractors who provide their own vehicles. The Company expects fiscal year 2010 capital expenditures to range from $2 to $3 million.
The Board of Directors has authorized the Company to purchase up to $78 million of Dynamex Inc. common stock on the open market. Through July 31, 2009, the Company had repurchased a total of 2.4 million shares at an average price of $20.81 per share for a total dollar cost of $50 million leaving a balance of $28 million in the current authorization. The Company suspended the share repurchase program in the FY 2009 second quarter. Delaware law
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