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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2004ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934Commission file number: 000-21057
 DYNAMEX INC.  Delaware
(State of incorporation)
    
    86-0712225
(I.R.S. Employer Identification No.)
 1870 Crown Drive
Dallas, Texas
(Address of principal executive offices)
    
    75234
(Zip Code)
 Registrants telephone number, including area code:
(214) 561-7500 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes x     No Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes     x     No The number of shares of the registrants common stock, $.01 par value,
outstanding as of June 4, 2004 was 11,357,497 shares.




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DYNAMEX INC.    
 INDEX PagePart I.Financial InformationItem 1. Financial Statements.Condensed Consolidated Balance Sheets
    
    2April 30, 2004 (Unaudited) and July 31, 2003Condensed Statements of Consolidated Operations (Unaudited)
    
    3Three and Nine Months ended April 30, 2004 and 2003Condensed Statements of Consolidated Cash Flows (Unaudited)
    
    4Nine Months ended April 30, 2004 and 2003Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    5Item 2. Managements Discussion and Analysis of Financial Condition
    
    8and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market Risk
    
    16Item 4. Controls and Procedures
    
    17Part II.Other InformationItem 1. Legal Proceedings
    
    18Item 6. Exhibits and Reports on Form 8-K
    
    18Signature
    
    19Exhibit Index
    
    E-1Credit AgreementCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive OfficerCertification of Chief Financial Officer
 1




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DYNAMEX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)  April 30,
    
    July 31,2004
    
    2003(Unaudited)ASSETSCURRENTCash and cash equivalents
    
    $
    3,579
    
    
    $
    4,338Accounts receivable (net of allowance for doubtful accounts
of $811 and $721, respectively)
    
    
    30,458
    
    
    
    26,109Prepaid and other current assets
    
    
    2,049
    
    
    
    2,453Deferred income taxes
    
    
    1,931
    
    
    
    1,976Total current assets
    
    
    38,017
    
    
    
    34,876Property and equipment  net
    
    
    4,385
    
    
    
    4,287Goodwill
    
    
    44,984
    
    
    
    44,743Intangibles  net
    
    
    485
    
    
    
    981Deferred income taxes
    
    
    12,169
    
    
    
    10,064Other assets
    
    
    1,121
    
    
    
    590Total assets
    
    $
    101,161
    
    
    $
    95,541LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable trade
    
    $
    4,998
    
    
    $
    6,564Accrued liabilities
    
    
    15,105
    
    
    
    14,805Current portion of long-term debt
    
    
    
    
    
    
    5,728Total current liabilities
    
    
    20,103
    
    
    
    27,097LONG-TERM DEBT
    
    
    15,766
    
    
    
    14,116Total liabilities
    
    
    35,869
    
    
    
    41,213COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITYPreferred stock; $0.01 par value, 10,000 shares authorized;
none outstanding
    
    
    
    
    
    
    Common stock; $0.01 par value, 50,000 shares authorized;
11,358 and 11,208 outstanding, respectively
    
    
    114
    
    
    
    112Additional paid-in capital
    
    
    74,906
    
    
    
    74,064Accumulated deficit
    
    
    (10,480
    )
    
    
    (20,250
    )Unrealized foreign currency translation adjustment
    
    
    752
    
    
    
    402Total stockholders equity
    
    
    65,292
    
    
    
    54,328Total liabilities and stockholders equity
    
    $
    101,161
    
    
    $
    95,541
 See accompanying notes to condensed consolidated financial statements. 2




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DYNAMEX INC.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(in thousands, except per share data)
(Unaudited)  Three months ended
    
    Nine months endedApril 30,
    
    April 30,2004
    
    2003
    
    2004
    
    2003Sales
    
    $
    74,016
    
    
    $
    62,146
    
    
    $
    213,465
    
    
    $
    183,209Cost of sales
    
    
    53,090
    
    
    
    44,321
    
    
    
    153,352
    
    
    
    129,626Gross profit
    
    
    20,926
    
    
    
    17,825
    
    
    
    60,113
    
    
    
    53,583Selling, general and administrative expenses
    
    
    16,207
    
    
    
    14,422
    
    
    
    48,070
    
    
    
    42,827Depreciation and amortization
    
    
    474
    
    
    
    518
    
    
    
    1,453
    
    
    
    1,609(Gain) loss on disposal of property and equipment
    
    
    
    
    
    
    (3
    )
    
    
    (20
    )
    
    
    10Operating income
    
    
    4,245
    
    
    
    2,888
    
    
    
    10,610
    
    
    
    9,137Interest expense
    
    
    614
    
    
    
    571
    
    
    
    1,268
    
    
    
    1,787Other income
    
    
    (30
    )
    
    
    (19
    )
    
    
    (134
    )
    
    
    (93
    )Income before taxes
    
    
    3,661
    
    
    
    2,336
    
    
    
    9,476
    
    
    
    7,443Income tax expense (benefit)
    
    
    1,361
    
    
    
    238
    
    
    
    (294
    )
    
    
    2,070Net income
    
    $
    2,300
    
    
    $
    2,098
    
    
    $
    9,770
    
    
    $
    5,373Basic earnings per common share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.87
    
    
    $
    0.48Diluted earnings per common share:
    
    $
    0.20
    
    
    $
    0.18
    
    
    $
    0.85
    
    
    $
    0.47Weighted average shares:Common shares outstanding
    
    
    11,351
    
    
    
    11,208
    
    
    
    11,285
    
    
    
    11,207Adjusted common shares  assuming
exercise of stock options
    
    
    11,631
    
    
    
    11,379
    
    
    
    11,538
    
    
    
    11,332
 See accompanying notes to condensed consolidated financial statements. 3




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DYNAMEX INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(in thousands)
(Unaudited)  Nine months endedApril 30,2004
    
    2003OPERATING ACTIVITIESNet income
    
    $
    9,770
    
    
    $
    5,373Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    1,453
    
    
    
    1,609Provision for losses on accounts receivable
    
    
    626
    
    
    
    677Deferred income taxes
    
    
    (2,060
    )
    
    
    788Stock option compensation
    
    
    251
    
    
    
    (Gain) loss on disposal of property and equipment
    
    
    (20
    )
    
    
    10Changes in current operating assets and liabilities:Accounts receivable
    
    
    (4,975
    )
    
    
    (3,388
    )Prepaids and other assets
    
    
    404
    
    
    
    1,302Accounts payable and accrued liabilities
    
    
    (1,265
    )
    
    
    1,594Net cash provided by operating activities
    
    
    4,184
    
    
    
    7,965INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (1,516
    )
    
    
    (1,366
    )Net proceeds from disposal of property and equipment
    
    
    12
    
    
    
    62Net cash used in investing activities
    
    
    (1,504
    )
    
    
    (1,304
    )FINANCING ACTIVITIESPrincipal payments on long-term debt
    
    
    (2,979
    )
    
    
    (4,346
    )Net borrowings under line of credit
    
    
    (1,100
    )
    
    
    (2,075
    )Net proceeds from sale of common stock
    
    
    593
    
    
    
    3Other assets and deferred financing fees
    
    
    (50
    )
    
    
    (83
    )Net cash used in financing activities
    
    
    (3,536
    )
    
    
    (6,501
    )EFFECT OF EXCHANGE RATES ON CASH
    
    
    97
    
    
    
    709NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (759
    )
    
    
    869CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    4,338
    
    
    
    4,489CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    3,579
    
    
    $
    5,358SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATIONCash paid for interest
    
    $
    710
    
    
    $
    1,369Cash paid for taxes
    
    $
    1,593
    
    
    $
    938
 See accompanying notes to condensed consolidated financial statements. 4




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DYNAMEX INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)  1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Dynamex Inc. (the Company and Dynamex) provides
same-day delivery and logistics services in the United States and Canada. The
Companys primary services are (i) same-day, on-demand delivery, (ii) scheduled
distribution and (iii) fleet management. The operating subsidiaries of the Company, with country of incorporation, are as follows:  
    
    Dynamex Operations East, Inc. (U.S.)
    
    Dynamex Operations West, Inc. (U.S.)
    
    Dynamex Dedicated Fleet Services, Inc. (U.S.)
    
    Dynamex Canada Corp. (Canada)
    
    Alpine Enterprises Ltd. (Canada)
    
    Roadrunner Transportation, Inc. (U.S.)
    
    New York Document Exchange Corp. (U.S.) Basis of presentation The consolidated financial statements include the
accounts of Dynamex Inc. and its wholly-owned subsidiaries. All significant
inter-company accounts and transactions have been eliminated. All dollar
amounts in the financial statements and notes to the financial statements
except per share data are stated in thousands of dollars unless otherwise
indicated. Except as otherwise indicated, references to years mean our fiscal
year ending July 31, 2004 or ended July 31 of the year referenced, and
comparisons are to the corresponding period of the prior year. The accompanying interim financial statements are unaudited. Certain
information and disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted, although the Company believes the disclosures included herein are
adequate to make the information presented not misleading. The results of the
interim periods presented are not necessarily indicative of results to be
expected for the full fiscal year, and should be read in conjunction with the
Companys audited financial statements for the fiscal year ended July 31, 2003. The accompanying interim financial statements contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the Companys financial position at April 30, 2004, the results
of its operations for the three and nine month periods ended April 30, 2004 and
2003, and cash flows for the nine month periods ended April 30, 2004 and 2003.
The tax provision for the three and nine month periods ended April 30, 2004 and
2003 are based upon managements estimate of the Companys annualized effective
tax rate. 2. COMPREHENSIVE INCOME The two components of comprehensive income are net income and foreign currency
translation adjustments. Comprehensive income for the three and nine months
ended April 30, 2004 was as follows: Three months ended
    
    Nine months endedApril 30,
    
    April 30,2004
    
    2003
    
    2004
    
    2003Net income
    
    $
    2,300
    
    
    $
    2,098
    
    
    $
    9,770
    
    
    $
    5,373Foreign currency translation gain (loss)
    
    
    (564
    )
    
    
    946
    
    
    
    350
    
    
    
    1,455Comprehensive income
    
    $
    1,736
    
    
    $
    3,044
    
    
    $
    10,120
    
    
    $
    6,828
 3. INTANGIBLES 5




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DYNAMEX INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)  At April 30, 2004, intangibles and related amortization expense for the three
and nine months ended April 30, 2004 and 2003 consist of the following: Amortization ExpenseAccumulated
    
    
    
    
    
    Three Months Ended April 30,
    
    Nine Months Ended April 30,Asset
    
    Amortization
    
    Net
    
    2004
    
    2003
    
    2004
    
    2003Deferred bank financing fees
    
    $
    121
    
    
    $
    3
    
    
    $
    118
    
    
    $
    474
    
    
    $
    189
    
    
    $
    602
    
    
    $
    528Trademarks and other
    
    
    470
    
    
    
    103
    
    
    
    367
    
    
    
    5
    
    
    
    5
    
    
    
    16
    
    
    
    27Total
    
    $
    591
    
    
    $
    106
    
    
    $
    485
    
    
    $
    479
    
    
    $
    194
    
    
    $
    618
    
    
    $
    555
 Amortization of deferred financing fees is classified as interest expense in
the consolidated statement of operations. Estimated amortization expense for
the succeeding five fiscal years, including deferred bank financing fees, is
$631 for 2004, $54 for 2005 through 2007 and approximately $29 in 2008. During
the third quarter of fiscal 2004, in connection with the refinancing of the
Companys credit facility, the Company wrote off $450 of deferred bank
financing costs. 4. COMPUTATION OF EARNINGS PER SHARE The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share computation as required by Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Common stock
equivalents related to stock options are excluded from diluted earnings per
share calculation if their effect would be anti-dilutive to earnings per share
before cumulative effect of change in accounting principle. Three months ended
    
    Nine months endedApril 30,
    
    April 30,2004
    
    2003
    
    2004
    
    2003Net income
    
    $
    2,300
    
    
    $
    2,098
    
    
    $
    9,770
    
    
    $
    5,373Weighted average common
shares outstanding
    
    
    11,351
    
    
    
    11,208
    
    
    
    11,285
    
    
    
    11,207Common share equivalents related
to options and warrants
    
    
    280
    
    
    
    171
    
    
    
    253
    
    
    
    125Common shares and common share
equivalents
    
    
    11,631
    
    
    
    11,379
    
    
    
    11,538
    
    
    
    11,332Net income per common share:Basic
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.87
    
    
    $
    0.48Diluted
    
    $
    0.20
    
    
    $
    0.18
    
    
    $
    0.85
    
    
    $
    0.47
 5. STOCK OPTION PLAN Effective August 1, 2003, the Company adopted the fair value recognition
provisions of Statement of Financial Accounting Standards No. 123, Accounting
for Stock-Based Compensation (SFAS No. 123) for stock-based employee
compensation. Under the modified prospective method of adoption selected by the
Company under the provisions of Statement of Financial Accounting Standards No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure,
stock-based employee compensation cost recognized in 2004 is the same as that
which would have been recognized had the fair value 6




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DYNAMEX INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)  recognition provisions of
SFAS No. 123 been applied to all awards granted after August 1, 1995. Results
for prior periods have not been restated. During the three and nine month
periods ended April 30, 2004, the company recognized $49 and $251,
respectively, related to stock based compensation. Prior to fiscal 2004, the Company applied APB Opinion No. 25 and related
interpretations in accounting for its stock options. The exercise price of
stock options granted was equal to the market price of the stock on the date of
grant; therefore, using the intrinsic value method to value the options, no
compensation cost had been recognized for stock options in the financial
statements. Had the Company determined compensation cost based on the fair
value at the grant date for its stock options consistent with the method set
forth under SFAS No. 123, the Companys net earnings would have been reduced to
the pro forma amounts indicated below: Three months
    
    Nine monthsended
    
    endedApril 30,
    
    April 30,2003
    
    2003Net income:As reported
    
    $
    2,098
    
    
    $
    5,373Deduct: Total stock based compensation
expense determined under fair value based
method for all awards, net of related tax effects
    
    
    68
    
    
    
    198Pro forma net income
    
    $
    2,030
    
    
    $
    5,175Earning per share:Basic  as reported
    
    $
    0.19
    
    
    $
    0.48Basic  pro forma
    
    $
    0.18
    
    
    $
    0.46Diluted  as reported
    
    $
    0.18
    
    
    $
    0.47Diluted  pro forma
    
    $
    0.18
    
    
    $
    0.46
 The fair value of each grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in 2004 and 2003, respectively: dividend yield of
0% for all years; expected volatility of 86% and 76%; risk-free interest rate
of 4.11% and 4.10%; and expected lives of an average of 10 years for all years.
The weighted average fair value of options granted during 2004 and 2003 was
$10.40 and $3.13, respectively. 7




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 This discussion contains forward-looking statements, which involve
assumptions regarding Company operations and future prospects. Although the
Company believes its expectations are based on reasonable assumptions, such
statements are subject to risk and uncertainty, including, among other things,
competition, foreign exchange, and risks associated with the same-day
transportation industry. These and other risks are mentioned from time to time
in the Companys filings with the Securities and Exchange Commission. Caution
should be taken that these factors could cause the actual results to differ
from those stated or implied in this and other Company communications. General The Company is the leading provider of same-day delivery and logistics services
in the United States and Canada. Through internal growth and acquisitions, the
Company has built a national network of same-day delivery and logistics systems
in Canada and has established operations in 23 U.S. metropolitan areas. A significant portion of the Companys revenues is generated in Canada. For
the three and nine month periods ended April 30, 2004, Canadian revenues
accounted for approximately 32.3% and 33.4%, respectively of total consolidated
revenue, compared to 34.3% and 33.8% the same periods during 2003. The exchange
rate translating the Canadian dollar to the U.S. dollar increased 11.1% and
15.3%, respectively, in the three and nine month periods ended April 30, 2004
compared to the corresponding periods in the prior year. Had the exchange rate
been the same as in those prior periods, Canadian sales for the three and nine
month periods ended April 30, 2004 would have accounted for 30.0% and 30.3%,
respectively, of total sales. Critical Accounting Policies The Companys discussion and analysis of its financial condition and results of
operations are based on the Companys financial statements, which have been
prepared in accordance with accounting policies generally accepted in the
United States of America. The Company believes certain critical accounting
policies affect its more significant judgments and estimates used in the
preparation of financial statements. A description of the Companys critical
accounting policies is set forth in the Companys Form 10-K for the year ended
July 31, 2003. As of, and for the three and nine month periods ended April 30,
2004, there have been no material changes or updates to the Companys critical
accounting policies except for the adoption of the fair value recognition
provisions of SFAS No. 123 for stock-based employee compensation (see Note 5). Results of Operations Three months ended
    
    Nine months endedApril 30,
    
    April 30,2004
    
    2003
    
    2004
    
    2003Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    71.7
    %
    
    
    71.3
    %
    
    
    71.8
    %
    
    
    70.8
    %Gross profit
    
    
    28.3
    %
    
    
    28.7
    %
    
    
    28.2
    %
    
    
    29.2
    %Selling, general and administrative expenses
    
    
    21.9
    %
    
    
    23.2
    %
    
    
    22.5
    %
    
    
    23.4
    %Depreciation and amortization
    
    
    0.7
    %
    
    
    0.9
    %
    
    
    0.7
    %
    
    
    0.8
    %(Gain) loss on disposal of property and equipment
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Operating income
    
    
    5.7
    %
    
    
    4.6
    %
    
    
    5.0
    %
    
    
    5.0
    %Interest expense
    
    
    0.8
    %
    
    
    0.9
    %
    
    
    0.6
    %
    
    
    1.0
    %Other income
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    -0.1
    %
    
    
    -0.1
    %Income before taxes
    
    
    4.9
    %
    
    
    3.7
    %
    
    
    4.5
    %
    
    
    4.1
    %Income tax expense
    
    
    1.9
    %
    
    
    0.4
    %
    
    
    -0.1
    %
    
    
    1.1
    %Net income
    
    
    3.0
    %
    
    
    3.3
    %
    
    
    4.6
    %
    
    
    3.0
    %
 8




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 Three months ended April 30, 2004 compared to three months ended April 30, 2003 Net income for the three months ended April 30, 2004 was $2.3 million ($0.20
per fully diluted share) compared to $2.1 million ($0.18 per fully diluted
share) for the three months ended April 30, 2003. The increase was attributable
to increased sales volume and the associated increase in gross profit, which
were offset in part by higher selling, general and administrative expenses (SG
& A) and income taxes. Sales for the three months ended April 30, 2004 were $74 million, a 19.1%
increase over the sales in the same period in 2003 of $62 million. Sales in
the U.S. increased $9.3 million, or 22.7%, virtually all of which came from our
scheduled, distribution and outsourcing services. The average conversion rate
between the Canadian dollar and the U.S. dollar increased 11.1% over the prior
year quarter, which had the effect of increasing sales for the three months
ended April 30, 2004 by approximately $2.4 million had the conversion rate been
the same as the prior year period. Excluding the effect of this increase,
sales would have been approximately 15.3% higher in the current quarter
compared to the prior year. If the exchange rate had been the same in 2004 as
it was in 2003, on-demand sales would have increased approximately $0.3
million, or 1.2%, in the current period and scheduled, distribution and
outsourcing services would have shown an increase of $9.2 million, or 26.8%. Cost of sales for the three months ended April 30, 2004 increased $8.8 million,
or 19.8%, to $53.1 million from $44.3 million for the same period in 2003.
Cost of sales, as a percentage of sales, increased to 71.7% for the three
months ended April 30, 2004 from 71.3% for the same period ended in 2003. The
primary reason for the increase in cost of sales percentage is the change in
business mix. Sales of scheduled, distribution and outsourcing services
continue to grow faster than on-demand sales. On-demand sales generally
produce a higher gross margin primarily due to the smaller size of delivery
vehicles compared to other services; however, on-demand services are
transaction intensive, requiring higher SG & A costs compared to other services. While on-demand sales will
continue to be a major component of our comprehensive service menu, management
expects on-demand sales will comprise a smaller portion of anticipated sales
growth, while scheduled, distribution and outsourcing services likely will
account for most of the projected growth. On-demand sales were approximately
40% of total sales in the current year quarter compared to 45% in the prior
year. SG & A expenses for the three months ended April 30, 2004 increased $1.8
million, or 12.4%, to $16.2 million from $14.4 million for the same period in
2003. Approximately $0.5 million of this increase is due to the increase in
the exchange rate between the Canadian dollar and the U.S. dollar. Excluding
the impact of the exchange rate, the largest increase in SG & A was salaries
and benefits ($1.0 million). This increase is primarily attributable to
additional personnel necessary to manage the new business and pay commissions
on those sales. The improved operating performance during the current quarter
also led to higher bonuses earned by management and operating personnel. The
Company also incurred the following additional SG & A expenses in this quarter
compared to the same quarter in the prior year: higher medical and state
unemployment insurance premiums ($125,000), stock options expense ($49,000) and
software maintenance costs ($75,000). As a percentage of sales, SG & A
expenses were 21.9% for the three months ended April 30, 2004, compared to
23.2% in the same period last year. For the three months ended April 30, 2004, depreciation and amortization was
slightly lower ($44,000) than for the same period in 2003. Management expects
that this expense will remain relatively flat over the next several quarters. Interest expense for the three months ended April 30, 2004 was $0.6 million, an
increase of $43,000 over the prior year. During this quarter, the Company
replaced its existing credit agreement with a new $30,000,000 Senior Secured
Revolving Credit Facility (Credit Facility) that matures on November 30,
2007. As a result of this transaction, in accordance with generally accepted
accounting principles, the Company wrote off $0.4 million in unamortized
deferred financing costs on the old credit agreement. Excluding this
write-off, interest expense was down 71% compared to the prior year. This
decrease is attributable to lower outstanding debt, a reduced margin charged by
the Companys lenders and lower amortization of deferred financing costs. The
weighted average interest rate on the Companys outstanding debt at April 30,
2004 was 2.9%, compared to 4.9% at April 30, 2003. The rate is lower in the
current quarter because of the reduced margin on the Companys debt due to the
Companys improved EBITDA ratio, and the lower interest provided for in the new
Credit Facility. The effective income tax rate was 37% in the current quarter compared to 10% in
the prior year quarter. Income tax expense in 2003 was reduced by
approximately $425,000 associated with a foreign tax credit created by Dynamex
Canada Corp.s 9




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 payment of a $2.5 million cash dividend to Dynamex Inc.
Excluding the tax benefit of this transaction, the effective income tax rate in
the quarter ended April 30, 2003 would have been 33%. Nine months ended April 30, 2004 compared to nine months ended April 30, 2003 Net income for the nine months ended April 30, 2004 was $9.8 million ($0.85 per
fully diluted share). During the quarter ended January 31, 2004, the Company
determined that it is more likely than not that the benefits of the net
operating loss (NOL) carryforward totaling $10.6 million will be realized. The
Company had provided a 100% valuation allowance on this NOL and based on the
determination that the Company would be able to realize the NOL, reversed the
valuation allowance during its second fiscal quarter, resulting in a credit to
income tax expense of approximately $3.7 million. Excluding the effects of
this adjustment, net income for the nine months ended April 30, 2004 was $6.1
million ($0.53 per fully diluted share) compared to net income of $5.4 million
($0.48 per fully diluted share) for the same period in 2003. This improvement
results from higher gross profit associated with increased sales, lower
interest, and lower depreciation and amortization expense, partially offset by
increased SG & A expenses and higher income tax expense. Sales for the nine months ended April 30, 2004 increased $30 million, or 16.5%,
to $213 million from $183 million for the same period in 2003. Scheduled,
distribution and outsourcing services increased $27.8 million (28.5%) compared
to the prior year while on-demand sales increased $2.4 million (2.8%). The
average conversion rate between the Canadian dollar and the U.S. dollar
increased 15.3% over the prior year period, which had the effect of increasing
sales for the nine months ended April 30, 2004 by approximately $9.4 million
had the conversion rate been the same as the prior year period. Excluding the
effect of this increase, sales would have been approximately 11.4% higher in
the nine months ended April 30, 2004 compared to the prior year. If the
exchange rate had been the same in 2004 as it was in 2003, on-demand sales
would have decreased approximately $2 million, or 2.3%, in the current period
and scheduled, distribution and outsourcing services would have shown an
increase of $22.8 million, or 23.3%. Cost of sales for the nine months ended April 30, 2004 increased $23.7 million,
or 18.3%, to $153 million and as a percentage of sales from 70.8% to 71.8%
compared to the same period last year. The primary reason for the increase in
cost of sales percentage continues to be the change in business mix. As noted
above, on-demand sales generally produce a higher gross margin than scheduled,
distribution and outsourcing services; however, on-demand sales also require
higher SG & A costs than other services. Sales of scheduled, distribution and
outsourcing services comprised approximately 59% and 53% of total sales in the
nine months ended April 30, 2004 and 2003, respectively. On-demand sales were
approximately 41% of total sales in the current year period compared to 47% in
the prior year. SG & A expenses for the nine months ended April 30, 2004 increased $5.3
million, or 12.2%, to $48.1 million from $42.8 million for the same period in
2003. Approximately $1.8 million of this increase is due to the increase in
the exchange rate between the Canadian dollar and the U.S. dollar. Excluding
the impact of the exchange rate, the largest increase in SG & A was salaries
and wages ($2 million). The Company hired additional personnel to manage and
service the significant new business startups and paid sales commissions on the
new business generated. The improved operating performance during fiscal 2004
also led to higher bonuses earned by management and operating personnel. In
addition, the Company incurred the following increases in costs in this period
compared to the same period in the prior year: stock options expense
($251,000), software maintenance ($200,000), higher medical and state
unemployment insurance premiums ($385,000), and investment in a customer
relationship management system and training for our sales force ($190,000).
Other increases include facilities and communications costs, travel costs and
other costs related to new business start-ups, one-time costs related to
relocation of the Chicago logistics center ($120,000), and additional
professional fees incurred in connection with the Sarbanes-Oxley mandated
reporting ($100,000). As a percentage of sales, SG & A expenses were 22.5%
for the nine months ended April 30, 2004, compared to 23.4% in the same period
last year. Depreciation and amortization for the nine months ended April 30, 2004 was $1.5
million compared to $1.6 million for the same period in 2003. Management does
not expect a significant change in the level of depreciation and amortization
expense in the near future. Interest expense was $1.3 million, a decrease of $0.5 million or 29% for the
nine months ended April 30, 2004 compared to same period in 2003. Interest
expense in the current period included the write-off of $0.4 million in
unamortized deferred financing costs necessitated by the refinancing of the
Companys Credit Facility. Excluding this charge, interest expense as a
percentage of sales was 0.4% compared to 0.9% in the same period last year.
This decrease is attributable to lower outstanding debt, a reduced margin
charged by the Companys lenders and lower amortization of deferred financing
costs. 10




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 The effective income tax rate, before the reversal of the valuation allowance
on the Companys net operating loss carryforward in the current period and the
$0.4 million impact of the foreign tax credit in the prior year, increased from
34% in the nine month period ended April 30, 2003 to 36% in the current period.
The increase in the current year is generally due to higher levels of taxable
income resulting from lower permanent differences, which were partially offset
by the recognition of a foreign tax credit of $174,000 related to an $0.8
million dividend the Companys Canadian subsidiary paid to the U.S. in October
2003. Liquidity and Capital Resources Net cash provided by operating activities was $4.2 million for the nine months
ended April 30, 2004 compared to $8.0 million for the same period in 2003. Net
cash provided by operations, prior to changes in current operating assets and
liabilities and deferred income taxes, was $12.1 million for the nine months
ended April 30, 2004 compared to $7.7 million for the nine months ended April
30, 2003 due primarily to higher net income. The large increase in accounts
receivable in the nine months ended April 30, 2004 is due primarily to the
increase in sales during that period. Capital expenditures for the nine months ended April 30, 2004 were
approximately $1.5 million. Management expects capital expenditures to be in
the $2.0 million range for the full fiscal year. 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
owner-operators who provide their own vehicles. On March 2, 2004, the Company replaced its existing bank credit agreement with
a new $30,000,000 Senior Secured, Revolving Credit Facility that matures on
November 30, 2007. Under the terms of the new facility, interest is payable
quarterly at prime, or LIBOR plus a margin ranging from 1.25% to 1.75% (1.5% at
April 30, 2004), based on the ratio of Funded Debt to EBITDA, as defined in the
Credit Facility. There are no scheduled principal payments; however, the
Company is required to maintain certain financial ratios related to minimum
amounts of stockholders equity, fixed charges to cash flow, funded debt to
cash flow and funded debt to eligible receivables, as defined. Amounts
outstanding under the Credit Facility are secured by all of the Companys U.S.
assets and 100% of the stock of its domestic subsidiaries. The Credit Facility
also contains restrictions on incurring additional debt and investments by the
Company as well as requiring the Company to maintain certain financial ratios. Amounts outstanding under the Credit Facility included borrowings of $15.8
million and outstanding letters of credit totaling $3.9 million. The Company
has entered into an interest rate protection arrangement on a portion of the
Credit Facility ($7.5 million at April 30, 2004). The interest rate has been
fixed at the LIBOR margin plus 1.49% (2.99% at April 30, 2004). The portion of
the Credit Facility subject to this interest rate protection agreement is
reduced by $1.375 million per quarter until maturity. This arrangement matures
November 30, 2005. The Companys EBITDA (earnings before interest, taxes, depreciation and
amortization) was approximately $12.2 million (5.7% of sales) for the nine
months ended April 30, 2004, compared to $10.8 million (5.9% of sales) in the
same period last year. The decrease as a percentage of sales is due to the
lower gross margin, and the increased SG & A costs mentioned above including
salaries and wages, stock options expense, the customer relationship management
system implementation and training costs, software maintenance, and medical
insurance premiums, among others. Management
has included EBITDA in its discussion herein as a measure of liquidity because
it believes that it is a widely accepted financial indicator of a companys
ability to service and/or incur indebtedness, maintain current operating levels
of fixed assets and acquire additional operations and businesses. EBITDA
should not be considered as a substitute for statement of operations or cash
flow data from the Companys financial statements, which have been prepared in
accordance with generally accepted accounting principles. In addition, the
Companys definition of EBITDA may not be identical to similarly entitled
measures used by other companies. The following table reconciles net income
presented in accordance with generally accepted accounting principles (GAAP) to
EBITDA, which is a non-GAAP financial measure (in thousands): 11




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 Three months ended
    
    Nine months endedApril 30,
    
    April 30,2004
    
    2003
    
    2004
    
    2003Net income
    
    $
    2,300
    
    
    $
    2,098
    
    
    $
    9,770
    
    
    $
    5,373Adjustments:Income tax expense (benefit)
    
    
    1,361
    
    
    
    238
    
    
    
    (294
    )
    
    
    2,070Interest expense
    
    
    614
    
    
    
    571
    
    
    
    1,268
    
    
    
    1,787Depreciation and amortization
    
    
    474
    
    
    
    518
    
    
    
    1,453
    
    
    
    1,609EBITDA
    
    $
    4,749
    
    
    $
    3,425
    
    
    $
    12,197
    
    
    $
    10,839
 The Companys cash flow prior to changes in current operating assets and
liabilities and deferred income taxes, was $12.1 million. Consequently,
purchases of property and equipment and payments of long-term debt were
financed entirely by internally generated cash flow. Management expects that its future capital requirements will generally be met
from internally generated cash flow. The Companys access to other sources of
capital, such as additional bank borrowings and the issuance of debt
securities, is affected by, among other things, general market conditions
affecting the availability of such capital. The Company completed its last
acquisition in August 1998. Should the Company pursue acquisitions in the
future, the Company may be required to incur additional debt. There can be no
assurance that the Companys primary lenders will consent to such acquisitions
or that if additional financing is necessary, it can be obtained on terms the
Company deems acceptable. Deferred Taxes As of April 30, 2004 the Company has a U.S. net operating loss carryforward
totaling approximately $8.5 million. The Company had previously established a
100% valuation allowance in accordance with the provisions of Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes, (SFAS No.
109) for U.S. operating losses not currently deductible. The Company
generated U.S. taxable income of approximately $2.1 million in the year ended
July 31, 2003, has estimated U.S. taxable income of approximately $3.1 million
through the first nine months of fiscal 2004, expects to generate taxable
income for the remainder of 2004, and projects that it will generate taxable
income over the next three years sufficient to realize the benefits of the NOL
carryforward. Accordingly, during the quarter ended January 31, 2004, the
Company determined that it is more likely than not that the benefits of the NOL
will be realized and reversed the valuation allowance, resulting in a credit to
income tax expense of approximately $3.7 million. As a result, management
expects that the U.S. effective tax rate, before the impact of any foreign tax
credits generated, for the remainder of fiscal 2004 will be approximately 38%.
The remaining deferred tax assets represent deductions for financial statement
purposes that will reduce future taxable income. Inflation The Company does not believe that inflation has had a material effect on the
Companys results of operations nor does it believe it will do so in the
foreseeable future. However, there can be no assurance the Companys business
will not be affected by inflation in the future. 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. Certain Tax Matters Related to Drivers Substantially all of the Companys drivers supply their own vehicles and as of
April 30, 2004, over 90% of these owner-operators were independent contractors
as opposed to employees of the Company. The Company does not pay or withhold
any federal, state or provincial employment tax with respect to or on behalf of
independent contractors. From time to time, taxing authorities in the U.S. and
Canada have sought to assert that owner-operators in the transportation
industry, including 12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 those utilized by the Company, are employees, rather than
independent contractors. The Company believes that the owner-operators utilized
by the Company are not employees under existing interpretations of federal
(U.S. and Canadian), state and provincial laws. However, there can be no
assurance that federal (U.S. and Canadian), state or provincial authorities
will not challenge this position, or that other laws or regulations, including
tax laws, or interpretations thereof, will not change. If, as a result of any
of the foregoing, the Company were required to pay withholding taxes and pay
for and administer added employee benefits to these drivers, the Companys
operating costs would increase. Additionally, if the Company is required to pay
back-up withholding with respect to amounts previously paid to such drivers, it
may also be required to pay penalties or be subject to other liabilities as a
result of incorrect classification of such drivers. Any of the foregoing
circumstances could have a material adverse impact on the Companys financial
condition and results of operations, and/or require the Company to restate
financial information from prior periods. The Company had filed for an income
tax refund for prior years in the U.S., and the Internal Revenue Service (IRS)
elected to audit the amended returns for those periods. As part of this
process, the IRS conducted an employment tax audit including a review of our
use of independent contractors and concluded that no reclassification of
independent contractors was required. In addition to the drivers that are independent contractors, certain of the
Companys drivers are employed by the Company and supply and operate their own
vehicles during the course of their employment. The Company reimburses these
employees for all or a portion of the operating costs of those vehicles. The
Company believes that these reimbursement arrangements do not represent
additional compensation to those employees. However, there can be no assurance
that federal (U.S. and Canadian), state or provincial taxing authorities will
not seek to recharacterize some or all of such payments as additional
compensation. If such amounts were so recharacterized, the Company would have
to pay additional employment related taxes on such amounts, and may also be
required to pay penalties, which could have an adverse impact on the Companys financial
condition and results of operations, and/or to restate financial information
from prior periods. Claims Exposure As of April 30, 2004, the Company utilized the services of approximately 4,300
drivers and messengers. From time to time such persons are involved in
accidents or other activities that may give rise to liability claims. The
Company currently carries liability insurance with a per occurrence and an
aggregate limit of $20 million. Owner-operators are required to maintain
liability insurance of at least the minimum amounts required by applicable
state or provincial law (generally such minimum requirements range from $35,000
to $75,000). The Company also has insurance policies covering property and
fiduciary trust liability, which coverage includes all drivers and messengers.
There can be no assurance that claims against the Company, whether under the
liability insurance or the surety bonds, will not exceed the applicable amount
of coverage, that the Companys insurer will be solvent at the time of
settlement of an insured claim, or that the Company will be able to obtain
insurance at acceptable levels and costs in the future. If the Company were to
experience a material increase in the frequency or severity of accidents,
liability claims, workers compensation claims or unfavorable resolutions of
claims, the Companys business, financial condition and results of operations
could be materially adversely affected. In addition, significant increases in
insurance costs could reduce the Companys profitability. Highly Competitive Industry The market for same-day delivery and logistics services has been and is
expected to remain highly competitive. Competition is often intense,
particularly for basic delivery services. High fragmentation and low barriers
to entry characterize the industry. Other companies in the industry compete
with the Company not only for provision of services but also for acquisition
candidates and qualified drivers. Some of these companies have longer operating
histories and greater financial and other resources than the Company.
Additionally, companies that do not currently operate delivery and logistics
businesses may enter the industry in the future. Foreign Exchange Significant portions of the Companys operations are conducted in Canada.
Exchange rate fluctuations between the U.S. and Canadian dollars result in
fluctuations in the amounts relating to the Canadian operations reported in the
Companys consolidated financial statements. The Canadian dollar is the
functional currency for the Companys Canadian operations; therefore, any
change in the exchange rate will affect the Companys reported sales for such
period. The Company historically has not entered into hedging transactions with
respect to its foreign currency exposure, but may do so in the future. There
can be no assurance that fluctuations in foreign currency exchange rates will
not have a material adverse effect on the Companys business, financial
condition or results of operations. 13




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 Permits and Licensing The Companys delivery operations are subject to various federal (U.S. and
Canadian), state, provincial and local laws, ordinances and regulations that in
many instances require certificates, permits and licenses. Failure by 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. Dependence on Key Personnel The Companys success is largely dependent on the skills, experience and
performance of certain key members of its management. The loss of the services
of any of these key employees could have a material adverse effect on the
Companys business, financial condition and results of operations. The
Companys future success and plans for growth also depend on its ability to
attract and retain skilled personnel in all areas of its business. There is
strong competition for skilled personnel in the same-day delivery and logistics
businesses. Risks Associated with the Same-day Transportation Industry; General Economic Conditions The Companys sales and earnings are especially sensitive to events that affect
the same-day transportation industry including extreme weather conditions,
economic factors affecting the Companys significant customers and shortages of
or disputes with labor, any of which could result in the Companys inability to
service its clients effectively or the inability of the Company to profitably
manage its operations. In addition, downturns in the level of general economic
activity and employment in the U.S. or Canada may negatively impact demand for
the Companys services. Technological advances in the nature of facsimile and electronic mail have
affected the market for on-demand document delivery services. Although the
Company has shifted its focus to the distribution of non-faxable items and
logistics services, there can be no assurance that these or other technologies
will not have a material adverse effect on the Companys business, financial
condition and results of operations in the future. Dependence on Availability of Qualified Delivery Personnel The Company is dependent upon its ability to attract and retain qualified
delivery personnel who possess the skills and experience necessary to meet the
needs of its operations. The Company competes in markets in which unemployment
is relatively low and the competition for couriers and other employees is
intense. The Company must continually evaluate and upgrade its pool of
available delivery and support personnel to keep pace with demands for delivery
services. There can be no assurance that qualified delivery personnel will
continue to be available in sufficient numbers and on terms acceptable to the
Company. The ability of the Company to retain owner-operators may also be
impacted by our ability to pass on fuel cost increases to customers to maintain
profit margins and the quality of driver pay. The inability to attract and
retain qualified delivery personnel would have a material adverse impact on the
Companys business, financial condition and results of operations. Safe Harbor Statement Under The Private Securities Litigation Reform Act With the exception of historical information, the matters discussed in this
report are forward looking statements as that term is defined in Section 21E
of the Securities Exchange Act of 1934. Several important factors have been identified, which could cause actual
results to differ materially from those predicted. By way of example:  
    
    The competitive nature of the same-day delivery business.
    
    The ability of the Company to attract and retain qualified delivery personnel
as well as retain key management personnel.
    
    A change in the current tax status of independent contractor drivers to employees or a change in the treatment of the
reimbursement of vehicle operating costs to employee drivers. 14




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
  
    
    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 retain owner-operators may be impacted by our ability to pass on fuel cost increases to
customers to maintain profit margins and the quality of driver pay. 15




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk Foreign Exchange Exposure Significant portions of the Companys operations are conducted in Canada.
Exchange rate fluctuations between the U.S. and Canadian dollar result in
fluctuations in the amounts relating to the Canadian operations reported in the
Companys consolidated financial statements. The Company historically has not
entered into hedging transactions with respect to its foreign currency
exposure, but may do so in the future. The sensitivity analysis model used by the Company for foreign exchange
exposure compares the revenue and net income figures from Canadian operations,
at the actual exchange rate, to a 10% decrease in the exchange rate. Based on
this model, a 10% decrease would result in a decrease in quarterly revenue of
approximately $2.4 million and a decrease in quarterly net income of
approximately $0.1 million. There can be no assurances that the above
projected exchange rate decrease will materialize. Fluctuations of exchange
rates are beyond the control of the Companys management. Interest Rate Exposure The Company has entered into an interest rate protection arrangement on a
portion of the Credit Facility. The interest rate has been fixed at the LIBOR
margin plus 1.49% (2.99% at April 30, 2004). This hedging agreement expires on
November 30, 2005. The Company does not hold or issue derivative financial
instruments for speculative or trading purposes. The sensitivity analysis model used by the Company for interest rate exposure
compares interest expense fluctuations over a one-year period based on current
debt levels and current interest rates versus current debt levels at current
interest rates with a 10% increase. Based on this model, a 10% increase would
result in an increase in interest expense of less than $0.1 million. There can
be no assurances that the above projected interest rate increase will
materialize. Fluctuations of interest rates are beyond the control of the
Companys management. 16




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ITEM 4. CONTROLS AND PROCEDURES 
 Item 4. Controls and Procedures The term disclosure controls and procedures is defined in Rules 13a-14(c) and
15d-14(c) of the Securities Exchange Act of 1934 (Exchange Act). These rules
refer to the controls and other procedures of a company that are designed to
ensure that information required to be disclosed by a company in the reports
that it files under the Exchange Act is recorded, processed, summarized and
reported within required time periods. The Companys Chief Executive and Chief
Financial Officer have evaluated the effectiveness of the Companys disclosure
controls and procedures and, based on such evaluation, have determined that
such disclosure controls and procedures were effective as of April 30, 2004
(the end of the period covered by this Quarterly Report on Form 10-Q). The Company maintains a system of internal accounting controls that is designed
to provide reasonable assurance that the Companys books and records accurately
reflect its transactions and that the established policies and procedures are
followed. Subsequent to the date of our most recent evaluation, there were no
significant changes to internal controls or in other factors that could
significantly affect the Companys internal controls. 17




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##### Table of Contents



PART II. OTHER INFORMATION 
 Part II. Other Information 
 Item 1. Legal Proceedings. The Company is a party to various legal proceedings arising in the ordinary
course of its business. Management believes that the ultimate resolution of
these proceedings will not, in the aggregate, have a material adverse effect on
the financial condition, results of operations, or liquidity of the Company. 
 Item 6. Exhibits and Reports on Form 8-K.  (a)
    
    Exhibits:  10.14
    
    Credit Agreement by and among the Company and
Bank of America, N.A., as administrative agent for the lenders
therein, dated March 2, 200431.1
    
    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
    
    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
    
    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 200232.2
    
    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  (b)
    
    Reports on Form 8-K: Report on Form 8-K filed on March 5, 2004 concerning the March
3, 2004 press release announcing second quarter fiscal year 2004
results 18




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##### Table of Contents



SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. DYNAMEX INC.Dated: June 7, 2004
    by
    /s/ Richard K. McClellandRichard K. McClellandPresident, Chief Executive Officer and
Chairman of the Board
(Principal Executive Officer) Dated: June 7, 2004
    by
    /s/ Ray E. SchmitzRay E. SchmitzVice President - Chief Financial Officer
(Principal Financial Officer) Dated: June 7, 2004
    by
    /s/ George S. StephensGeorge S. StephensCorporate Controller
(Principal Accounting Officer) 19




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##### Table of Contents



EXHIBIT INDEX ExhibitsNumber
    
    Description10.14
    
    Credit Agreement by and among the Company and Bank of
America, N.A., as administrative agent for the lenders therein,
dated March 2, 200431.1
    
    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
    
    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
    
    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 200232.2
    
    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
 E-1