Dynamex Profit Falls 61 Percent

Same-day delivery and logistics provider Dynamex cut back operations and administrative staff and built its sales force to hang on to profits in its fourth fiscal quarter.

Net income of $1.8 million for the fiscal 2009 fourth quarter ended July 31 was down 61 percent from earnings of $4.6 million in the prior year. The results include a pre-tax restructuring charge of $1.1 million related to the closure of the Canadian administrative office in Toronto, Canada and moving all finance and accounting functions to the Dallas corporate office and the elimination of the position of President U.S.

Core sales and fuel surcharges declined to bring revenue down 18.7 percent compared with last year to $97 million. Excluding changes in fuel surcharge and foreign exchange, core sales declined 8.3 percent in the quarter compared to the prior year.

“We are pleased with our fiscal fourth quarter results given the continued overall weakness in the economy,” said James L. Welch, president and chief executive officer of Dynamex. “Our sales and earnings per share for the quarter were certainly at the higher end of our expectations given the ongoing weakness in shipment volumes. Our variable, direct cost structure continues to validate our business model in even the most challenging business environment.

Operating income was $2.7 million, a decline of 65% compared to the prior year quarter. Purchased transportation costs, the largest component of operating expenses represented 63% of sales in the current year quarter, down from 64.3% last year.

Salaries and employee benefit costs declined $3.1 million, or 13.3 percent compared to the same quarter last year. A little more than half the cost savings was due to the weaker Canadian dollar, lower bonus accruals and the reduction in force announced in the second quarter. Lower shipment volume was the cause of the balance of the decline. Cost reductions were partially offset by higher salaries and benefits of approximately $0.3 million from the expansion of the sales force.

For the full fiscal year ended July 31, 2009, the company reported net income of $8.8 million compared with net income of $15.8 million in the prior year.

Contact Thomas L. Gallagher at tgallagher@joc.com.