##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended July 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 000-21057
 DYNAMEX INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    86-0712225(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 5429 LBJ Freeway, Suite 1000, Dallas, Texas
    
    75240(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
(214) 560-9000
 Securities registered pursuant to Section 12 of the Act:
None
 Securities registered pursuant to Section 12 of the Act:
Common Stock, $.01 par value
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



TABLE OF CONTENTS
 PagePART IITEM 1.
    
    BUSINESS
    
    
    2ITEM 1A.
    
    RISK FACTORS
    
    
    7ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
    
    
    10ITEM 2.
    
    PROPERTIES
    
    
    10ITEM 3.
    
    LEGAL PROCEEDINGS
    
    
    12ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    13PART IIITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    14ITEM 6.
    
    SELECTED FINANCIAL DATA
    
    
    17ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
    
    
    18ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    
    
    27ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    28ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
    
    
    28ITEM 9A.
    
    CONTROLS AND PROCEDURES
    
    
    28ITEM 9B.
    
    OTHER INFORMATION
    
    
    28PART IIIITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    29ITEM 11.
    
    EXECUTIVE COMPENSATION
    
    
    29ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
    
    
    29ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    29ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    29PART IVITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    30EXHIBIT 10.14EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2EXHIBIT 99.1
  1




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PART I
 Statements and information presented within this Annual Report on Form 10-K for Dynamex Inc.
(the Company and Dynamex) contain forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be
identified by the use of predictive, future tense or forward-looking terminology, such as
believes, anticipates, expects, estimates, may, will or similar terms. Forward-looking
statements also include projections of financial performance, statements regarding managements
plans and objectives and statements concerning any assumptions relating to the foregoing. Certain
important factors which may cause actual results to vary materially from these forward-looking
statements accompany such statements and appear elsewhere in this report, including without
limitation, the factors disclosed under Risk Factors. All subsequent written or oral
forward-looking statements attributable to the Company or persons acting on its behalf are
expressly qualified by these factors.
 
 ITEM 1.
    
    BUSINESS
 General
  Industry Overview
   2




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Business Strategy
  Focus on Primary Services
 Target National, Regional and Local Accounts
 Create Strategic Alliances
 License Technology and Business Practices.
 Services
  Same-Day On-Demand Delivery
 Same-Day Local and Regional Distribution
 3




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Operations
  Same-Day On-Demand Delivery.
 4




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Same-Day Local and Regional Distribution.
    Sales and Marketing
    5




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Customers
   Competition
     Regulation
   6




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Safety
  Intellectual Property
  Employees
   Available Information
 HTTP://WWW.DYNAMEX.COM HTTP://WWW.SEC.GOV.
 
 ITEM 1A.
    
    RISK FACTORS
 In addition to other information in this report, the following risk factors should be
considered carefully in evaluating the Company and its business. This report contains
forward-looking statements, which involve risks and uncertainties. The Companys actual results
could differ materially from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth in the following risk factors and elsewhere in this
report.
 Competition May Adversely Affect Our Results
  7




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An Increase in Claims May Expose Us to Losses
  We Rely on Independent Contractor Owner-Operator Drivers to Make Deliveries for Our Customers
  We May Be Adversely Affected by Local Delivery Industry and General Economic Conditions
  Fluctuations of Foreign Exchange Rates May Adversely Affect Our Results
  Failure to Maintain Permits and Licensing May Adversely Affect Our Ability to Operate
  8




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We Depend Upon Key Personnel for Our Continued Operations
  Technological Advances May Adversely Affect Our Business
  We Are Highly Dependent Upon Our Technology Infrastructure
  We Are Dependent on Availability of Qualified Delivery Personnel
  We May Need for Additional Financing to Pursue Our Acquisition Strategy
  Factors Beyond Our Control May Affect the Volatility of Our Stock Price
  9




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Escalating Fuel Costs May Adversely Affect Our Financial Condition and Results of Operations
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
  Number ofLocation
    
    Leased PropertiesCanadaAlberta
    
    
    4British Columbia
    
    
    6Manitoba
    
    
    2Newfoundland
    
    
    1Nova Scotia
    
    
    1Ontario
    
    
    13Quebec
    
    
    3Saskatchewan
    
    
    2Canadian Total
    
    
    32
 10




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Number ofLocation
    
    Leased PropertiesUnited StatesArizona
    
    
    1California
    
    
    11Colorado
    
    
    1Connecticut
    
    
    1Delaware
    
    
    1Florida
    
    
    1Georgia
    
    
    1Illinois
    
    
    2Indiana
    
    
    1Kansas
    
    
    1Maryland
    
    
    1Massachusetts
    
    
    1Minnesota
    
    
    1Nevada
    
    
    1New Jersey
    
    
    3New York
    
    
    6North Carolina
    
    
    2Ohio
    
    
    1Pennsylvania
    
    
    3Tennessee
    
    
    1Texas
    
    
    6Virginia
    
    
    3Washington
    
    
    2United States Total
    
    
    52Total
    
    
    84
   11




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ITEM 3.
    
    LEGAL PROCEEDINGS
       12




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ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  13




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Market Information
 BidFiscal 2008
    
    High
    
    LowFirst Quarter
    
    $
    29.95
    
    
    $
    23.50Second Quarter
    
    
    30.47
    
    
    
    22.70Third Quarter
    
    
    26.46
    
    
    
    21.55Fourth Quarter
    
    
    29.57
    
    
    
    23.05Fiscal 2007
    
    High
    
    LowFirst Quarter
    
    $
    22.42
    
    
    $
    19.00Second Quarter
    
    
    24.86
    
    
    
    20.51Third Quarter
    
    
    27.39
    
    
    
    22.56Fourth Quarter
    
    
    29.00
    
    
    
    23.65
 Stock Price Performance
  14




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COMPARATIVE CUMULATIVE TOTAL RETURN
AMONG DYNAMEX INC.,
NASDAQ COMPOSITE INDEX, AMEX COMPOSITE INDEX
AND RUSSELL 2000 INDEX
 
 
 
 **
    
    The Company transferred its listing to the Nasdaq Global Select Market from the AMEX on March
14, 2005.***
    
    The Russell 2000 Stock Index represents companies with a market capitalization similar to
that of the Company. The Company does not believe it can reasonably identify a peer group
because it believes that there is only one public company engaged in lines of business
directly comparative to those of the Company. Holders
 Dividends
 Securities Authorized for Issuance Under Equity Compensation Plans
 15




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Number of securities to be
    
    
    
    
    
    
    Number of securitiesissued upon exercise of
    
    
    Weighted-average exercise
    
    
    remaining available for futureoutstanding options,
    
    
    price of outstanding
    
    
    issuance under equityPlan category
    
    warrants and rights
    
    
    options, warrants and rights
    
    
    compensation plansEquity compensation
plans approved by
security holders
    
    
    512,250
    
    
    $
    20.66
    
    
    
    1,059,500Equity compensation
plans not approved
by security
holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    512,250
    
    
    $
    20.66
    
    
    
    1,059,500
 Common Stock Repurchase
  Total number
    
    Average
    
    Total number of
    
    Approximate dollar valueof shares
    
    price paid
    
    shares purchased as part of
    
    of shares that may yet bePeriod
    
    purchased
    
    per share
    
    a publicly announced plan
    
    purchased under the planMay 1 to May 31,
2008
    
    
    105,800
    
    
    $
    24.06
    
    
    
    105,800
    
    
    $19.1 millionJuly 1 to July 31,
2008
    
    
    15,200
    
    
    $
    27.61
    
    
    
    15,200
    
    
    $18.6 million
  16




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##### Table of Contents



ITEM 6.
    
    SELECTED FINANCIAL DATA
  Years ending July 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands, except per share amounts)Statements of operations data:Sales
    
    $
    455,776
    
    
    $
    413,774
    
    
    $
    358,374
    
    
    $
    321,103
    
    
    $
    287,856Cost of sales
    
    
    334,378
    
    
    
    304,339
    
    
    
    259,311
    
    
    
    232,023
    
    
    
    206,487Gross profit
    
    
    121,398
    
    
    
    109,435
    
    
    
    99,063
    
    
    
    89,080
    
    
    
    81,369Selling, general and administrative expenses (1)
    
    
    93,360
    
    
    
    85,341
    
    
    
    77,125
    
    
    
    69,049
    
    
    
    64,026Depreciation and amortization
    
    
    2,825
    
    
    
    2,357
    
    
    
    1,931
    
    
    
    1,648
    
    
    
    1,890(Gain) loss on disposal of property and equipment
    
    
    (8
    )
    
    
    (20
    )
    
    
    1
    
    
    
    (21
    )
    
    
    (41
    )Operating income
    
    
    25,221
    
    
    
    21,757
    
    
    
    20,006
    
    
    
    18,404
    
    
    
    15,494Interest expense, net
    
    
    232
    
    
    
    299
    
    
    
    295
    
    
    
    466
    
    
    
    1,406Other (income) expense, net (2)
    
    
    (516
    )
    
    
    (2,079
    )
    
    
    (275
    )
    
    
    (226
    )
    
    
    (182
    )Income before income taxes
    
    
    25,505
    
    
    
    23,537
    
    
    
    19,986
    
    
    
    18,164
    
    
    
    14,270Income taxes (3)
    
    
    9,722
    
    
    
    8,575
    
    
    
    7,594
    
    
    
    6,979
    
    
    
    1,437Net income
    
    $
    15,783
    
    
    $
    14,962
    
    
    $
    12,392
    
    
    $
    11,185
    
    
    $
    12,833Earnings per share:basic
    
    $
    1.55
    
    
    $
    1.41
    
    
    $
    1.12
    
    
    $
    0.97
    
    
    $
    1.13diluted
    
    $
    1.53
    
    
    $
    1.39
    
    
    $
    1.11
    
    
    $
    0.95
    
    
    $
    1.11Weighted average common shares outstanding:basic
    
    
    10,207
    
    
    
    10,612
    
    
    
    11,057
    
    
    
    11,544
    
    
    
    11,314diluted
    
    
    10,297
    
    
    
    10,738
    
    
    
    11,197
    
    
    
    11,804
    
    
    
    11,532Other data:Earnings before interest, taxes, depreciation and
amortization (EBITDA) (4)Net income
    
    $
    15,783
    
    
    $
    14,962
    
    
    $
    12,392
    
    
    $
    11,185
    
    
    $
    12,833Adjustments:Income taxes
    
    
    9,722
    
    
    
    8,575
    
    
    
    7,594
    
    
    
    6,979
    
    
    
    1,437Interest expense, net
    
    
    232
    
    
    
    299
    
    
    
    295
    
    
    
    466
    
    
    
    1,406Depreciation and amortization
    
    
    2,825
    
    
    
    2,357
    
    
    
    1,931
    
    
    
    1,648
    
    
    
    1,890EBITDA
    
    $
    28,562
    
    
    $
    26,193
    
    
    $
    22,212
    
    
    $
    20,278
    
    
    $
    17,566
 July 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(in thousands)Balance sheet data:Working capital
    
    $
    39,874
    
    
    $
    23,337
    
    
    $
    18,889
    
    
    $
    22,917
    
    
    $
    16,704Total assets
    
    
    138,624
    
    
    
    121,040
    
    
    
    110,525
    
    
    
    109,475
    
    
    
    102,072Long-term debt, excluding current portion
    
    
    
    
    
    
    
    
    
    
    905
    
    
    
    8
    
    
    
    10,000Stockholders equity
    
    
    97,634
    
    
    
    81,409
    
    
    
    79,212
    
    
    
    83,896
    
    
    
    69,310
 17




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1)
    
    Selling, general and administrative expenses include salaries, wages and employee benefits as
well as facility costs, communication, travel and entertainment, office supplies, equipment
rentals and general corporate expenses.2)
    
    The increase in other income in the year ended July 31, 2007, is principally attributable to
the resolution of inter-company, cross-border transfer pricing issues for fiscal years 2001
through 2005. As a result, the Company realized interest income of approximately $425,000
from the overpayment of prior year Canadian taxes without a corresponding increase in interest
expense from the U.S. as the Company had available U.S. net operating losses to offset the
additional income, and the realization of $937,000 in foreign currency transaction gains on
cash settlement of those inter-company charges. These inter-company charges were denominated
in Canadian dollars, the value of which increased in U.S. dollars from those prior year
levels. The result was to increase net income by $972,000, $0.09 per fully diluted share, for
the 2007 year. See Footnote 13 of Notes to the Consolidated Financial Statements for
additional information.3)
    
    Income tax expense for the year ended July 31, 2004, was reduced by $3.7 million as a result
of recognizing the tax benefit of U.S. net operating loss carryforwards of approximately $10.6
million that were not recognized in prior years due to uncertainty in those prior periods.
Accordingly, net income increased $3.7 million, $0.32 per fully diluted share for 2004.
Without the income tax adjustment, fully diluted earnings per share for the year ending July
31, 2004 would have been reported as $0.79.4)
    
    EBITDA is defined as income excluding interest, taxes, depreciation and amortization (as
presented on the face of the income statement). EBITDA is supplementally presented because
management believes that it is a widely accepted and useful financial indicator regarding our
results of operations. Management believes EBITDA assists in analyzing and benchmarking the
performance and value of our business. Although our management uses EBITDA as a financial
measure to assess the performance of our business compared to that of others in our industry,
the use of EBITDA is limited because it does not include certain costs that are material in
amount, such as interest, taxes, depreciation and amortization, necessary to operate our
business. EBITDA is not a recognized term under generally accepted accounting principles and,
when analyzing our operating performance, investors should use EBITDA in addition to, not as
an alternative for, operating income, net income and cash flows from operating activities. In
addition, the Companys definition of EBITDA may not be identical to similarly entitled
measures used by other companies. 
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 The following discussion should be read in conjunction with the information contained in the
Companys consolidated financial statements, including the notes thereto, and the other financial
information appearing elsewhere in this report. Statements regarding future economic performance,
managements plans and objectives, and any statements concerning its assumptions related to the
foregoing contained in Managements Discussion and Analysis of Financial Condition and Results of
Operation constitute forward-looking statements. Certain factors, which may cause actual results
to vary materially from these forward-looking statements, accompany such statements or appear
elsewhere in this report, including without limitation, the factors disclosed under Risk Factors.
 General
    18




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Critical Accounting Policies
  Use of estimates
 Revenue recognition 
 Intangibles 
 19




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Other assets  Recoverable contract contingency costs
 Self-insured claims liability
 Allowance for doubtful accounts
 Income taxes  .
  Stock-based compensation
   20




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Foreign currency translation  .
 Treasury stock acquired and retired 
 Other long-term liabilities 
 21




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Results of Operations
  Years Ended July 31,2008
    
    2007
    
    2006Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales:Purchased transportation
    
    
    65.9
    %
    
    
    65.4
    %
    
    
    65.0
    %Other direct costs
    
    
    7.5
    %
    
    
    8.1
    %
    
    
    7.3
    %Cost of sales
    
    
    73.4
    %
    
    
    73.5
    %
    
    
    72.3
    %Gross profit
    
    
    26.6
    %
    
    
    26.5
    %
    
    
    27.7
    %Selling, general and administrative expenses:Salaries and employee benefits
    
    
    14.4
    %
    
    
    14.1
    %
    
    
    15.0
    %Other
    
    
    6.1
    %
    
    
    6.5
    %
    
    
    6.5
    %Selling, general and administrative expenses
    
    
    20.5
    %
    
    
    20.6
    %
    
    
    21.5
    %Depreciation and amortization
    
    
    0.6
    %
    
    
    0.6
    %
    
    
    0.5
    %(Gain) loss on disposal of property and
equipment
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Operating income
    
    
    5.5
    %
    
    
    5.3
    %
    
    
    5.7
    %Interest expense
    
    
    0.0
    %
    
    
    0.1
    %
    
    
    0.1
    %Other (income) expense, net
    
    
    -0.1
    %
    
    
    -0.5
    %
    
    
    0.1
    %Income before income taxes
    
    
    5.6
    %
    
    
    5.7
    %
    
    
    5.7
    %Income taxes
    
    
    2.1
    %
    
    
    2.1
    %
    
    
    2.1
    %Net income
    
    
    3.5
    %
    
    
    3.6
    %
    
    
    3.6
    %
  Years Ended July 31,2008
    
    
    2007
    
    
    2006Sales by service type:On demand
    
    $
    148,410
    
    
    
    32.6
    %
    
    $
    137,418
    
    
    
    33.2
    %
    
    $
    134,179
    
    
    
    37.5
    %Scheduled/distribution
    
    
    307,366
    
    
    
    67.4
    %
    
    
    276,356
    
    
    
    66.8
    %
    
    
    224,195
    
    
    
    62.5
    %Total sales
    
    $
    455,776
    
    
    
    100.0
    %
    
    $
    413,774
    
    
    
    100.0
    %
    
    $
    358,374
    
    
    
    100.0
    %Sales by country:United States
    
    $
    280,583
    
    
    
    61.6
    %
    
    $
    257,025
    
    
    
    62.1
    %
    
    $
    230,768
    
    
    
    64.4
    %Canada
    
    
    175,193
    
    
    
    38.4
    %
    
    
    156,749
    
    
    
    37.9
    %
    
    
    127,606
    
    
    
    35.6
    %Total sales
    
    $
    455,776
    
    
    
    100.0
    %
    
    $
    413,774
    
    
    
    100.0
    %
    
    $
    358,374
    
    
    
    100.0
    %
 Year Ended July 31, 2008 Compared to Year Ended July 31, 2007
  22




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Year Ended July 31, 2007 Compared to Year Ended July 31, 2006
        24




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Liquidity and Capital Resources
      Compliance Area
    
    Covenant
    
    Level at July 31, 2008Ratio of funded debt to EBITDA
    
    Maximum of 2.00 to 1.00
    
    0.20 to 1.00Total indebtedness
    
    $20 million, including LOCs
    
    $6.1 millionLetters of credit sublimit
    
    $7.5 million
    
    $6.1 millionMaximum treasury stock purchases in any fiscal year
    
    $20 million
    
    $3.0 millionFixed charge coverage ratio
    
    Equal to or greater than 1.50 to 1.00
    
    1.75 to 1.00
  25




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Contractual Obligations
  Less thanTotal
    
    
    1 year
    
    
    1  3 years
    
    
    3  5 years
    
    
    ThereafterOperating Leases
    
    $
    37,796
    
    
    $
    10,851
    
    
    $
    15,438
    
    
    $
    7,480
    
    
    $
    4,027
  Income Taxes
   Inflation
  Financial Condition
  Recent Accounting Pronouncements
   26




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##### Table of Contents



Safe Harbor Statement Under The Private Securities Litigation Reform Act:
   
    
    The competitive nature of the same-day delivery business.
    
    The ability of the Company to attract and retain qualified courier personnel as well as
retain key management personnel.
    
    A change in the current tax status of courier drivers from independent contractor
drivers to employees.
    
    A significant increase in the number of workers compensation or vehicle liability
claims such that the Companys self insurance expense would increase significantly.
    
    A significant reduction in the exchange rate between the Canadian dollar and the U.S.
dollar.
    
    Failure of the Company to maintain required certificates, permits or licenses, or to
comply with applicable laws, ordinances or regulations could result in substantial fines or
possible revocation of the Companys authority to conduct certain of its operations.
    
    The ability of the Company to obtain adequate financing.
    
    The ability of the Company to pass on fuel cost increases to customers to maintain
profit margins and the quality of driver pay.
 
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 Foreign Exchange Exposure
  27




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##### Table of Contents



Interest Rate Exposure
  
 ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
      
 ITEM 9B.
    
    OTHER INFORMATION
  28




---



##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED                          
             
          
                   
STOCKHOLDER
MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
  29




---



##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) (1)
    
    Financial Statements
  (b)
    
    Exhibits
  (c)
    

    Financial Statement Schedules
  30




---



##### Table of Contents



SIGNATURES
  
 By:
    /s/ Ray E. SchmitzRay E. Schmitz, Vice-President and Chief Financial OfficerDated: October 14, 2008  Name
    
    Title/s/ Richard K. McClelland

Richard K. McClelland
    
    Chairman of the Board, Chief Executive 
Officer, President and Director
(Principal Executive Officer)/s/ Ray E. Schmitz

Ray E. Schmitz
    
    Vice President, Chief Financial Officer
(Principal Financial Officer)/s/ Gilbert Jones

Gilbert Jones
    
    Corporate Controller
(Principal Accounting Officer)/s/ Wayne Kern

Wayne Kern
    
    Director/s/ Stephen P. Smiley

Stephen P. Smiley
    
    Director/s/ Brian J. Hughes

Brian J. Hughes
    
    Director/s/ Bruce E. Ranck

Bruce E. Ranck
    
    Director/s/ Craig R. Lentzsch

Craig R. Lentzsch
    
    Director
 31




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageDynamex Inc.Managements Report on Internal Controls over Financial Reporting
    
    F-2Reports of Independent Registered Public Accounting Firm
    
    F-3Consolidated Balance Sheets, July 31, 2008 and 2007
    
    F-5Consolidated Statements of Operations for the fiscal years ended
July 31, 2008, 2007 and 2006
    
    F-6Consolidated Statements of Stockholders Equity for the fiscal years ended
July 31, 2008, 2007 and 2006
    
    F-7Consolidated Statements of Cash Flows for the fiscal years ended
July 31, 2008, 2007 and 2006
    
    F-8Notes to the Consolidated Financial Statements
    
    F-9
 F - 1




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 
     /s/ Richard K. McClelland
    
    /s/ Ray E. SchmitzRichard K. McClelland
    
    Ray E. SchmitzChairman of the Board, Chief Executive
Officer, President and Director
(Principal Executive Officer)
    
    Vice President, Chief Financial Officer
(Principal Financial Officer) F - 2




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Internal Control  Integrated Framework
 
 
 F - 3




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal
Control  Integrated Framework
      
 
 F - 4




---



##### Table of Contents



DYNAMEX INC.
 2008
    
    
    2007ASSETSCURRENTCash and cash equivalents
    
    $
    19,888
    
    
    $
    8,857Accounts receivable (net of allowance for doubtful
accounts of $915 and $866, respectively)
    
    
    47,288
    
    
    
    42,649Income taxes receivable
    
    
    1,546
    
    
    
    1,092Prepaid and other current assets
    
    
    4,429
    
    
    
    3,559Deferred income taxes
    
    
    3,504
    
    
    
    3,136Total current assets
    
    
    76,655
    
    
    
    59,293PROPERTY AND EQUIPMENT  net
    
    
    8,670
    
    
    
    8,495GOODWILL
    
    
    48,109
    
    
    
    47,613INTANGIBLES  net
    
    
    808
    
    
    
    326DEFERRED INCOME TAXES
    
    
    
    
    
    
    1,398OTHER
    
    
    4,382
    
    
    
    3,915Total assets
    
    $
    138,624
    
    
    $
    121,040LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable trade
    
    $
    12,621
    
    
    $
    15,426Accrued liabilities
    
    
    24,160
    
    
    
    20,530Total current liabilities
    
    
    36,781
    
    
    
    35,956LONG-TERM DEBT
    
    
    
    
    
    
    OTHER LONG-TERM LIABILITIES
    
    
    4,209
    
    
    
    3,675Total liabilities
    
    
    40,990
    
    
    
    39,631COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITYPreferred stock; $0.01 par value, 10,000 shares
authorized; none outstanding
    
    
    
    
    
    
    Common stock; $0.01 par value, 50,000 shares
authorized; 10,148 and 10,145 outstanding,
respectively
    
    
    101
    
    
    
    101Additional paid-in capital
    
    
    45,311
    
    
    
    45,671Retained earnings
    
    
    46,905
    
    
    
    31,122Accumulated other comprehensive income:Cumulative translation adjustment
    
    
    5,317
    
    
    
    4,515Total stockholders equity
    
    
    97,634
    
    
    
    81,409Total liabilities and stockholders equity
    
    $
    138,624
    
    
    $
    121,040
  F -5




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##### Table of Contents



DYNAMEX INC.
 2008
    
    
    2007
    
    
    2006Sales
    
    $
    455,776
    
    
    $
    413,774
    
    
    $
    358,374Cost of sales:Purchased transportation
    
    
    300,211
    
    
    
    270,910
    
    
    
    233,084Other direct costs
    
    
    34,167
    
    
    
    33,429
    
    
    
    26,227Cost of sales
    
    
    334,378
    
    
    
    304,339
    
    
    
    259,311Gross profit
    
    
    121,398
    
    
    
    109,435
    
    
    
    99,063Selling, general and administrative expenses:Salaries and employee benefits
    
    
    65,639
    
    
    
    58,420
    
    
    
    53,707Other
    
    
    27,721
    
    
    
    26,921
    
    
    
    23,418Selling, general and administrative expenses
    
    
    93,360
    
    
    
    85,341
    
    
    
    77,125Depreciation and amortization
    
    
    2,825
    
    
    
    2,357
    
    
    
    1,931(Gain) loss on disposal of property and
equipment
    
    
    (8
    )
    
    
    (20
    )
    
    
    1Operating income
    
    
    25,221
    
    
    
    21,757
    
    
    
    20,006Interest expense
    
    
    232
    
    
    
    299
    
    
    
    295Other income, net
    
    
    (516
    )
    
    
    (2,079
    )
    
    
    (275
    )Income before income taxes
    
    
    25,505
    
    
    
    23,537
    
    
    
    19,986Income taxes
    
    
    9,722
    
    
    
    8,575
    
    
    
    7,594Net income
    
    $
    15,783
    
    
    $
    14,962
    
    
    $
    12,392Basic earnings per common share
    
    $
    1.55
    
    
    $
    1.41
    
    
    $
    1.12Diluted earnings per common share
    
    $
    1.53
    
    
    $
    1.39
    
    
    $
    1.11Weighted average shares:Common shares outstanding
    
    
    10,207
    
    
    
    10,612
    
    
    
    11,057Adjusted common shares  assuming
exercise of stock options
    
    
    10,297
    
    
    
    10,738
    
    
    
    11,197
  F -6




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##### Table of Contents



DYNAMEX INC.
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBALANCE AT JULY 31, 2005
    
    
    11,612
    
    
    $
    116
    
    
    $
    77,196
    
    
    $
    3,768
    
    
    $
    2,816
    
    
    $
    83,896Issuance of common stock, including
tax benefit of $1,044
    
    
    245
    
    
    
    3
    
    
    
    2,126
    
    
    
    
    
    
    
    
    
    
    
    2,129Stock option compensation
    
    
    
    
    
    
    
    
    
    
    717
    
    
    
    
    
    
    
    
    
    
    
    717Treasury stock purchase and
retirement
    
    
    (1,219
    )
    
    
    (13
    )
    
    
    (21,525
    )
    
    
    
    
    
    
    
    
    
    
    (21,538
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,392
    
    
    
    
    
    
    
    12,392Unrealized foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,616
    
    
    
    1,616Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,008BALANCE AT JULY 31, 2006
    
    
    10,638
    
    
    
    106
    
    
    
    58,514
    
    
    
    16,160
    
    
    
    4,432
    
    
    
    79,212Issuance of common stock, including
tax benefit of $142
    
    
    128
    
    
    
    1
    
    
    
    1,244
    
    
    
    
    
    
    
    
    
    
    
    1,245Stock option compensation
    
    
    
    
    
    
    
    
    
    
    771
    
    
    
    
    
    
    
    
    
    
    
    771Treasury stock purchase and
retirement
    
    
    (621
    )
    
    
    (6
    )
    
    
    (14,858
    )
    
    
    
    
    
    
    
    
    
    
    (14,864
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,962
    
    
    
    
    
    
    
    14,962Unrealized foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83
    
    
    
    83Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,045BALANCE AT JULY 31, 2007
    
    
    10,145
    
    
    
    101
    
    
    
    45,671
    
    
    
    31,122
    
    
    
    4,515
    
    
    
    81,409Issuance of common stock, including
tax benefit of $328
    
    
    124
    
    
    
    1
    
    
    
    1,425
    
    
    
    
    
    
    
    
    
    
    
    1,426Stock option compensation
    
    
    
    
    
    
    
    
    
    
    1,180
    
    
    
    
    
    
    
    
    
    
    
    1,180Treasury stock purchase and
retirement
    
    
    (121
    )
    
    
    (1
    )
    
    
    (2,965
    )
    
    
    
    
    
    
    
    
    
    
    (2,966
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,783
    
    
    
    
    
    
    
    15,783Unrealized foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    802
    
    
    
    802Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,585BALANCE AT JULY 31, 2008
    
    
    10,148
    
    
    $
    101
    
    
    $
    45,311
    
    
    $
    46,905
    
    
    $
    5,317
    
    
    $
    97,634
  F -7




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##### Table of Contents



DYNAMEX INC.
 2008
    
    
    2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    15,783
    
    
    $
    14,962
    
    
    $
    12,392Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    2,825
    
    
    
    2,357
    
    
    
    1,931Amortization of deferred bank financing fees
    
    
    10
    
    
    
    28
    
    
    
    24Provision for losses on accounts receivable
    
    
    1,039
    
    
    
    499
    
    
    
    695Stock option compensation
    
    
    1,180
    
    
    
    771
    
    
    
    717Deferred income taxes
    
    
    1,472
    
    
    
    3,368
    
    
    
    1,716Lessor financed leasehold improvements
    
    
    
    
    
    
    1,997
    
    
    
    Non-cash rent expense
    
    
    49
    
    
    
    860
    
    
    
    (Gain) loss on disposal of property and equipment
    
    
    (8
    )
    
    
    (19
    )
    
    
    1Changes in current operating assets and liabilities:Accounts receivable
    
    
    (5,678
    )
    
    
    (6,722
    )
    
    
    (5,417
    )Prepaids and other current assets
    
    
    (1,405
    )
    
    
    (105
    )
    
    
    (1,377
    )Accounts payable and accrued liabilities
    
    
    1,087
    
    
    
    6,589
    
    
    
    4,837Net cash provided by operating activities
    
    
    16,354
    
    
    
    24,585
    
    
    
    15,519INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (2,845
    )
    
    
    (4,961
    )
    
    
    (2,193
    )Cash payment for acquisition
    
    
    (491
    )
    
    
    
    
    
    
    Purchase of investments
    
    
    (322
    )
    
    
    (278
    )
    
    
    (160
    )Net cash used in investing activities
    
    
    (3,658
    )
    
    
    (5,239
    )
    
    
    (2,353
    )FINANCING ACTIVITIESPrincipal payments on long-term debt
    
    
    
    
    
    
    (5
    )
    
    
    (3
    )Net (payments) receipts under line of credit
    
    
    
    
    
    
    (900
    )
    
    
    900Proceeds from stock option exercise
    
    
    1,099
    
    
    
    1,103
    
    
    
    1,084Tax benefit realized from exercise of stock options
    
    
    328
    
    
    
    142
    
    
    
    1,044Purchase and retirement of treasury stock
    
    
    (2,966
    )
    
    
    (14,864
    )
    
    
    (21,538
    )Other assets and deferred financing fees
    
    
    (176
    )
    
    
    (1,212
    )
    
    
    (964
    )Net cash used in financing activities
    
    
    (1,715
    )
    
    
    (15,736
    )
    
    
    (19,477
    )EFFECT OF EXCHANGE RATES ON CASH
    
    
    50
    
    
    
    (811
    )
    
    
    691NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    11,031
    
    
    
    2,799
    
    
    
    (5,620
    )CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    8,857
    
    
    
    6,058
    
    
    
    11,678CASH AND CASH EQUIVALENTS, END OF YEAR
    
    $
    19,888
    
    
    $
    8,857
    
    
    $
    6,058SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid for interest
    
    $
    157
    
    
    $
    262
    
    
    $
    304Cash paid for taxes
    
    $
    8,043
    
    
    $
    5,226
    
    
    $
    6,910
 F -8




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##### Table of Contents



1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Description of business
  
    
    Dynamex Operations East Inc. (U.S.)
    
    Dynamex Operations West Inc. (U.S.)
    
    Dynamex Fleet Services, Inc. (U.S.)
    
    Dynamex Franchise Holdings, Inc. (U.S.)
    
    Dynamex Domestic Franchising, Inc. (U.S.)
    
    Dynamex Canada Corp. (Canada)
    
    Dynamex Canada Franchise Holdings, Inc. (Canada)
 Principles of consolidation
 Use of estimates
 Property and equipment
 Equipment
    
    3-7 yearsSoftware
    
    3-5 yearsFurniture
    
    7 yearsVehicles
    
    5 years
   Business and credit concentrations 
 F-9




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##### Table of Contents



Goodwill and intangibles 
 Revenue recognition
 Cash and cash equivalents
 Allowance for doubtful accounts
 Financial instruments
 F-10




---



##### Table of Contents



Financing costs
 Other assets  Recoverable contract contingency costs
 Other long-term liabilities
 Self-insured claims liability 
 Income taxes  .
 Stock-based compensation
   F-11




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##### Table of Contents



Net income per share
 Foreign currency translation  .
 Treasury stock acquired and retired 
 New accounting pronouncements
   Reclassification
 2.
    
    COMPUTATION OF EARNINGS PER SHARE
  F-12




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##### Table of Contents



Years Ended July 31,2008
    
    
    2007
    
    
    2006Net income
    
    $
    15,783
    
    
    $
    14,962
    
    
    $
    12,392Weighted average common shares outstanding
    
    
    10,207
    
    
    
    10,612
    
    
    
    11,057Common share equivalents related to options
    
    
    90
    
    
    
    126
    
    
    
    140Common shares and common share equivalents
    
    
    10,297
    
    
    
    10,738
    
    
    
    11,197Basic earnings per common share
    
    $
    1.55
    
    
    $
    1.41
    
    
    $
    1.12Diluted earnings per common share
    
    $
    1.53
    
    
    $
    1.39
    
    
    $
    1.11
 3.
    
    INTANGIBLES
  July 31,2008
    
    
    2007Carrying amount:Deferred bank financing fees
    
    $
    132
    
    
    $
    132Customer lists
    
    
    583
    
    
    
    92Trademarks
    
    
    470
    
    
    
    4701,185
    
    
    
    694Less accumulated amortization:Deferred bank financing fees
    
    
    (132
    )
    
    
    (123
    )Customer lists
    
    
    (59
    )
    
    
    (78
    )Trademarks
    
    
    (186
    )
    
    
    (167
    )(377
    )
    
    
    (368
    )Intangibles  net
    
    $
    808
    
    
    $
    326
 F-13




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##### Table of Contents



4.
    
    PROPERTY AND EQUIPMENT
  July 31,2008
    
    
    2007Equipment
    
    $
    20,852
    
    
    $
    18,621Software
    
    
    8,633
    
    
    
    8,592Furniture
    
    
    2,098
    
    
    
    2,030Vehicles
    
    
    544
    
    
    
    567Leasehold improvements
    
    
    4,066
    
    
    
    4,948Other
    
    
    
    
    
    
    136,193
    
    
    
    34,759Less accumulated depreciation
    
    
    (27,523
    )
    
    
    (26,264
    )Property and equipment  net
    
    $
    8,670
    
    
    $
    8,495
  5.
    
    ACCRUED LIABILITIES
  July 31,2008
    
    
    2007Salaries and wages
    
    $
    3,936
    
    
    $
    3,816Independent contractor settlements
    
    
    8,067
    
    
    
    5,870Workers compensation estimated claims
    
    
    1,483
    
    
    
    1,711Vehicle liability estimated claims
    
    
    2,268
    
    
    
    2,234Vacation
    
    
    2,621
    
    
    
    2,400Deferred revenue
    
    
    352
    
    
    
    177Taxes  other
    
    
    1,104
    
    
    
    1,100Other
    
    
    4,329
    
    
    
    3,222Total accrued liabilities
    
    $
    24,160
    
    
    $
    20,530
 6.
    
    LONG-TERM DEBT AND OTHER LONG-TERM LIABILITIES
  July 31,2008
    
    
    2007Operating leases (a)
    
    $
    2,327
    
    
    $
    2,526Deferred compensation
    
    
    1,440
    
    
    
    1,149Deferred income taxes
    
    
    442
    
    
    
    Total other long-term liabilties
    
    $
    4,209
    
    
    $
    3,675
 F-14




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##### Table of Contents



7.
    
    COMMITMENTS AND CONTINGENCIES
    OperatingLeases2009
    
    $
    10,8512010
    
    
    8,8452011
    
    
    6,5932012
    
    
    4,5712013
    
    
    2,909Thereafter
    
    
    4,027$
    37,796
     F-15




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##### Table of Contents



F-16




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##### Table of Contents



8. INCOME TAXES
  Years ended July 31,2008
    
    
    2007
    
    
    2006Canada
    
    $
    10,598
    
    
    $
    10,547
    
    
    $
    7,857United States
    
    
    14,907
    
    
    
    12,990
    
    
    
    12,129$
    25,505
    
    
    $
    23,537
    
    
    $
    19,986
  Years ended July 31,2008
    
    
    2007
    
    
    2006Current tax expense:Canada
    
    $
    3,509
    
    
    $
    1,641
    
    
    $
    2,784United States  Federal
    
    
    3,893
    
    
    
    2,935
    
    
    
    2,578United States  States
    
    
    848
    
    
    
    631
    
    
    
    517Total current tax expense
    
    
    8,250
    
    
    
    5,207
    
    
    
    5,879Deferred tax expense:Canada
    
    
    12
    
    
    
    50
    
    
    
    14United States  Federal
    
    
    1,242
    
    
    
    3,021
    
    
    
    1,148United States  States
    
    
    218
    
    
    
    297
    
    
    
    553Total deferred tax expense
    
    
    1,472
    
    
    
    3,368
    
    
    
    1,715Total income tax provision
    
    $
    9,722
    
    
    $
    8,575
    
    
    $
    7,594
  F-17




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##### Table of Contents



July 31,2008
    
    
    2007Deferred tax asset:Allowance for doubtful accounts
    
    $
    276
    
    
    $
    254Amortization of intangibles
    
    
    
    
    
    
    1,745Accrued vacation
    
    
    690
    
    
    
    637Accrued liabilities and other
    
    
    2,414
    
    
    
    2,120Stock option expense
    
    
    602
    
    
    
    396Deferred compensation
    
    
    543
    
    
    
    424WOTC tax credit carryforward
    
    
    125
    
    
    
    125Capitalized start-up costs
    
    
    35
    
    
    
    35Total deferred tax benefits
    
    
    4,685
    
    
    
    5,736Less valuation allowance
    
    
    
    
    
    
    Net deferred tax asset
    
    
    4,685
    
    
    
    5,736Deferred tax liability:Fixed assets
    
    
    (1,185
    )
    
    
    (1,202
    )Amortization of intangibles
    
    
    (438
    )
    
    
    Total deferred tax liability
    
    
    (1,623
    )
    
    
    (1,202
    )Net deferred tax asset
    
    $
    3,062
    
    
    $
    4,534Financial statements:Current deferred tax asset
    
    $
    3,504
    
    
    $
    3,136Non-current deferred tax asset (liability)
    
    $
    (442
    )
    
    $
    1,398
       F-18




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##### Table of Contents



Years ended July 31,2008
    
    
    2007
    
    
    2006Income taxes at statutory rate
    
    $
    8,927
    
    
    $
    8,003
    
    
    $
    6,995Effect on taxes resulting from:State taxes
    
    
    1,066
    
    
    
    928
    
    
    
    823Impact on NY State net operating loss
carryforward from merging subsidiary
    
    
    
    
    
    
    
    
    
    
    248Foreign taxes (refunds)
    
    
    (182
    )
    
    
    (1,971
    )
    
    
    314(Increase) decrease in foreign tax credit
    
    
    
    
    
    
    3,608
    
    
    
    (1,504
    )Increase (decrease) in valuation
allowance
    
    
    
    
    
    
    (1,724
    )
    
    
    430Other (including permanent differences)
    
    
    (89
    )
    
    
    (269
    )
    
    
    288$
    9,722
    
    
    $
    8,575
    
    
    $
    7,594
 9. RESERVE FOR DOUBTFUL ACCOUNTS
  Balance at
    
    Additions Charges
    
    
    
    
    
    BalanceBeginning of
    
    to Costs and
    
    
    
    
    
    at End ofYear
    
    Expenses
    
    Deductions
    
    YearFiscal year ended:July 31, 2008
    
    $
    866
    
    
    $
    1,039
    
    
    $
    990
    
    
    $
    915July 31, 2007
    
    
    676
    
    
    
    499
    
    
    
    309
    
    
    
    866July 31, 2006
    
    
    767
    
    
    
    695
    
    
    
    786
    
    
    
    676
 10. STOCK OPTION PLAN
   F-19




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##### Table of Contents



WeightedNumber of
    
    AverageShares
    
    Exercise PriceNumber of shares under option:Outstanding at beginning of year
    
    
    485,050
    
    
    $
    15.47Granted
    
    
    182,000
    
    
    
    28.81Exercised
    
    
    (113,300
    )
    
    
    9.70Forfeited
    
    
    (41,500
    )
    
    
    25.59Outstanding at end of year
    
    
    512,250
    
    
    
    20.66Exercisable at end of year
    
    
    182,650
    
    
    
    15.56
  Weighted Avg.Number of
    
    Grant DateShares
    
    Fair ValueNumber of nonvested shares:Nonvested at beginning of year
    
    
    276,000
    
    
    $
    10.52Granted
    
    
    167,000
    
    
    
    15.07Vested
    
    
    (74,300
    )
    
    
    10.26Forfeited
    
    
    (39,100
    )
    
    
    13.57Nonvested at end of year
    
    
    329,600
    
    
    
    12.52
  Stock Options Outstanding
    
    
    Stock Options ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    WeightedRange of
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    AverageExercise Prices
    
    Shares
    
    
    Rem. Life (Yrs)
    
    
    Exercise Price
    
    
    Shares
    
    
    Rem. Life (Yrs)
    
    
    Exercise Price$1.44 - 10.00
    
    
    26,650
    
    
    
    3.52
    
    
    $
    2.37
    
    
    
    26,650
    
    
    
    3.52
    
    
    $
    2.37$10.01 - 20.00
    
    
    176,000
    
    
    
    6.53
    
    
    
    15.38
    
    
    
    94,000
    
    
    
    6.25
    
    
    
    14.87$20.01 -30.00
    
    
    309,600
    
    
    
    8.71
    
    
    
    25.24
    
    
    
    62,000
    
    
    
    8.40
    
    
    
    22.27512,250
    
    
    
    7.69
    
    
    $
    20.66
    
    
    
    182,650
    
    
    
    6.58
    
    
    $
    15.56
   F-20




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##### Table of Contents



Years ended July 31,2008
    
    2007
    
    2006Weighted average grant date fair
value for options granted
    
    $
    14.80
    
    
    $
    11.97
    
    
    $
    8.82Total Intrinsic value of shares
underlying options:Options exercised
    
    $
    2.1 million
    
   
    $
    1.9 million
    
    
    $
    3.6 millionOptions becoming exercisable
    
    $
    0.8 million
    
    
    $
    1.0 million
    
    
     $
    0.8 million
 11. REPURCHASE OF EQUITY SECURITIES
  12. EMPLOYEES DEFINED CONTRIBUTION PLAN
  13. OTHER INCOME
    F-21




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##### Table of Contents



Year endedJuly 31,2008
    
    
    2007
    
    
    2006Income before income taxes  As reported
    
    $
    25,505
    
    
    $
    23,537
    
    
    $
    19,986Income from transfer pricing (foreign exchange
gain and interest income)
    
    
    
    
    
    
    1,362
    
    
    
    Income before income taxes  Excluding
transfer pricing effects
    
    $
    25,505
    
    
    $
    22,175
    
    
    $
    19,986Income taxes  As reported
    
    $
    9,722
    
    
    $
    8,575
    
    
    $
    7,594Income tax effects (foreign exchange
gain, interest income and intercompany services)
    
    
    
    
    
    
    390
    
    
    
    Income taxes  Excluding transfer pricing effects
    
    $
    9,722
    
    
    $
    8,185
    
    
    $
    7,594Net income  As reported
    
    $
    15,783
    
    
    $
    14,962
    
    
    $
    12,392Net income  Excluding transfer pricing effects
    
    $
    15,783
    
    
    $
    13,990
    
    
    $
    12,392Net income from the transfer pricing transactions
    
    $
    
    
    
    $
    972
    
    
    $
    Earnings per share:Basic  As reported
    
    $
    1.55
    
    
    $
    1.41
    
    
    $
    1.12Transfer pricing adjustment
    
    
    
    
    
    
    0.09
    
    
    
    Basic  Excluding transfer pricing effects
    
    $
    1.55
    
    
    $
    1.32
    
    
    $
    1.12Fully diluted  As reported
    
    $
    1.53
    
    
    $
    1.39
    
    
    $
    1.11Transfer pricing adjustment
    
    
    
    
    
    
    0.09
    
    
    
    Basic  Excluding transfer pricing effects
    
    $
    1.53
    
    
    $
    1.30
    
    
    $
    1.11
 14. GEOGRAPHIC AREA INFORMATION
  F-22




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##### Table of Contents



UnitedStates
    
    Canada
    
    Total2008Sales
    
    $
    280,583
    
    
    $
    175,193
    
    
    $
    455,776Operating income
    
    
    12,855
    
    
    
    12,366
    
    
    
    25,221Identifiable assets
    
    
    100,397
    
    
    
    38,227
    
    
    
    138,624Goodwill, net
    
    
    36,111
    
    
    
    11,998
    
    
    
    48,109Capital expenditures
    
    
    1,981
    
    
    
    864
    
    
    
    2,845Depreciation and amortization
    
    
    2,370
    
    
    
    455
    
    
    
    2,825Amortization of deferred bank
financing fees
    
    
    10
    
    
    
    
    
    
    
    102007Sales
    
    $
    257,025
    
    
    $
    156,749
    
    
    $
    413,774Operating income
    
    
    9,896
    
    
    
    11,861
    
    
    
    21,757Identifiable assets
    
    
    91,334
    
    
    
    29,706
    
    
    
    121,040Goodwill, net
    
    
    36,111
    
    
    
    11,502
    
    
    
    47,613Capital expenditures
    
    
    4,579
    
    
    
    382
    
    
    
    4,961Depreciation and amortization
    
    
    2,079
    
    
    
    278
    
    
    
    2,357Amortization of deferred bank
financing fees
    
    
    28
    
    
    
    
    
    
    
    282006Sales
    
    $
    230,768
    
    
    $
    127,606
    
    
    $
    358,374Operating income
    
    
    10,376
    
    
    
    9,630
    
    
    
    20,006Identifiable assets
    
    
    78,760
    
    
    
    31,765
    
    
    
    110,525Goodwill, net
    
    
    36,111
    
    
    
    10,823
    
    
    
    46,934Capital expenditures
    
    
    1,860
    
    
    
    333
    
    
    
    2,193Depreciation and amortization
    
    
    1,670
    
    
    
    261
    
    
    
    1,931Amortization of deferred bank
financing fees
    
    
    24
    
    
    
    
    
    
    
    24
 F-23




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##### Table of Contents



15. QUARTERLY DATA (Unaudited)
  Quarter EndedOctober 31,
    
    
    January 31,
    
    
    April 30,
    
    
    July 31,2008Sales
    
    $
    111,752
    
    
    $
    111,957
    
    
    $
    112,976
    
    
    $
    119,092Gross proft
    
    
    29,705
    
    
    
    29,833
    
    
    
    29,590
    
    
    
    32,270Net income
    
    
    3,994
    
    
    
    3,419
    
    
    
    3,774
    
    
    
    4,596Net income per share:Basic
    
    
    0.39
    
    
    
    0.33
    
    
    
    0.37
    
    
    
    0.45Assuming dilution
    
    
    0.39
    
    
    
    0.33
    
    
    
    0.37
    
    
    
    0.45Average shares outstanding
    
    
    10,174
    
    
    
    10,232
    
    
    
    10,243
    
    
    
    10,181Number of business days
    
    
    64
    
    
    
    60
    
    
    
    63
    
    
    
    642007Sales
    
    $
    100,615
    
    
    $
    100,988
    
    
    $
    103,526
    
    
    $
    108,644Gross proft
    
    
    26,927
    
    
    
    26,175
    
    
    
    27,261
    
    
    
    29,071Net income
    
    
    3,649
    
    
    
    3,722
    (1)
    
    
    3,487
    
    
    
    4,105Net income per share:Basic
    
    
    0.34
    
    
    
    0.35
    (1)
    
    
    0.33
    
    
    
    0.39Assuming dilution
    
    
    0.34
    
    
    
    0.35
    (1)
    
    
    0.32
    
    
    
    0.38Average shares outstanding
    
    
    10,601
    
    
    
    10,602
    
    
    
    10,643
    
    
    
    10,605Number of business days
    
    
    64
    
    
    
    62
    
    
    
    62
    
    
    
    64
 
 (1)
    
    Includes net income of $972, $0.09 per basic and fully diluted earnings per share, resulting
from resolution of cross-border transfer pricing issues, a foreign currency transaction gain and
interest income. See Note 13 of the Notes to Consolidated Financial Statements for additional
information. F-24




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNumber
    
    
    
    Description3.1(2)
    
    
    
    Restated Certificate of Incorporation of Dynamex Inc.3.2(3)
    
    
    
    Bylaws, as amended and restated, of Dynamex Inc.10.1(4)
    
    
    
    Amendment No. 2 to Employment Agreement of Richard K. McClelland.10.2(3)
    
    
    
    Dynamex Inc. Amended and Restated 1996 Stock Option Plan.10.3(2)
    
    
    
    Marketing and Transportation Services Agreement, between Purolator
Courier Ltd. and Parcelway Courier Systems Canada Ltd., dated
November 20, 1995.10.4(2)
    
    
    
    Form of Indemnity Agreements with Executive Officers and Directors.10.14(5)
    
    
    
    Credit Agreement by and among the Company and Bank of America
N.A., as administrative agent for the lenders therein, dated March
2, 2004.10.14(6)
    
    
    
    First Amendment to the $30,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated April 22, 2005.10.14(7)
    
    
    
    Second Amendment to the $30,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated November 10, 2005.10.14(7)
    
    
    
    Third Amendment to the $30,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated December 23, 2005 (but effective as of
October 31, 2005).10.14(8)
    
    
    
    Fourth Amendment to the $30,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated April 22, 2005.10.14(9)
    
    
    
    Fifth Amendment to the $30,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated October 5, 2006.10.14(10)
    
    
    
    Sixth Amendment to the $30,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated July 31, 2007.10.14(1)
    
    
    
    Seventh Amendment to the $40,000,000 Revolving Credit Facility by
and among the Company and Bank of America, N.A., as administrative
agent and a lender, dated September 17, 2008.11.1
    
    
    
    Statement regarding computation of earnings (loss) per share. All
information required by Exhibit 11.1 is presented in Note 2 of the
Companys Consolidated Financial Statements in accordance with the
provisions of SFAS No. 12821.1(8)
    
    
    
    Subsidiaries of the Registrant.23.1(1)
    
    
    
    Consent of BDO Seidman, LLP.31.1(1)
    
    
    
    Certification of Chief Executive Officer of the Registrant,
pursuant to 17 CFR 240.13a  14(a) Or 17 CFR 240.15d  14(a)31.2(1)
    
    
    
    Certification of Chief Financial Officer of the Registrant,
pursuant to 17 CFR 240.13a  14(a) Or 17 CFR 240.15d  14(a)32.1(1)
    
    
    
    Certification of Chief Executive Officer of the Registrant,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2(1)
    
    
    
    Certification of Chief Financial Officer of the Registrant,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.99.1(1)
    
    
    
    Dynamex Inc. 2008 Equity Compensation Plan.
 
 (1)
    
    Filed herewith.(2)
    
    Filed as an exhibit to the registrants Registration Statement on Form S-1 (File No.
333-05293), and incorporated herein by reference.(3)
    
    Filed as an exhibit to the registrants annual report on Form 10-K for the fiscal year ended
July 31, 1997, and incorporated herein by reference.(4)
    
    Filed as an exhibit to Registration Statement on Form S-1 (File No. 333-49603), and
incorporated herein by reference.(5)
    
    Filed as an exhibit to the registrants quarterly report on Form 10-Q for the quarterly
period ended April 30, 2004, and incorporated herein by reference. E-1




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##### Table of Contents



(6)
    
    Filed as an exhibit to the registrants quarterly report on Form 10-Q for the quarterly
period ended April 30, 2005, and incorporated herein by reference.(7)
    
    Filed as an exhibit to the registrants quarterly report on Form 10-Q for the quarterly
period ended January 31, 2006, and incorporated herein by reference.(8)
    
    Filed as an exhibit to the registrants annual report on Form 10-K for the fiscal year ended
July 31, 2006, and incorporated herein by reference.(9)
    
    Filed as an exhibit to the registrants quarterly report on Form 10-Q for the quarterly
period ended October 31, 2006, and incorporated herein by reference.(10)
    
    Filed as an exhibit to the registrants annual report on Form 10-K for the fiscal year ended
July 31, 2007, and incorporated herein by reference. E-2