**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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**FORM 10-Q**

 

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**ý****        QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period ended October 31, 2004**

 

**OR**

 

**o****        TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

 

**Commission file number: 000-21057**

 

**DYNAMEXINC.**

(Exactname of registrant as specified in its charter)

 

| **Delaware**                                             | **86-0712225**                       |
|----------------------------------------------------------|--------------------------------------|
| (State of incorporation)                                 | (I.R.S. Employer Identification No.) |
|                                                     |                                 |
| **1870 Crown Drive, Dallas, Texas**                      | **75234**                            |
| (Address of principal executive offices)                 | (Zip Code)                           |
|                                                     |                                 |
| Registrant’s telephone number, including area code: |
| **(214) 561-7500**                                       |

 

Indicate bycheck mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes  ý  No  o

 

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes  ý  No  o

 

The number ofshares of the registrant’s common stock, $.01 par value, outstanding as of December 1,2004 was 11,486,397 shares.

 

 

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| **INDEX** |   |
|-----------|--------|

 
| **PART I  FINANCIAL INFORMATION** |                                                                                                            |
|-----------------------------------|-----------------------------------------------------------------------------------------------------------------|
|                              |                                                                                                            |   |
| Item 1.                           | Financial Statements                                                                                            |   |
|                              |                                                                                                            |   |
|                              | Condensed  Consolidated Balance Sheets  October 31, 2004 (Unaudited) and July 31, 2004                |   |
|                              |                                                                                                            |   |
|                              | Condensed  Statements of Consolidated Operations (Unaudited)  Three months ended October 31, 2004 and 2003 |   |
|                              |                                                                                                            |   |
|                              | Condensed  Statements of Consolidated Cash Flows (Unaudited)  Three months ended October 31, 2004 and 2003 |   |
|                              |                                                                                                            |   |
|                              | Notes  to Condensed Consolidated Financial Statements (Unaudited)                                               |   |
|                              |                                                                                                            |   |
| Item 2.                           | Management’s Discussion  and Analysis of Financial Condition and Results of Operations                     |   |
|                              |                                                                                                            |   |
| Item 3.                           | Quantitative and  Qualitative Disclosures About Market Risk                                                     |   |
|                              |                                                                                                            |   |
| Item 4.                           | Controls and Procedures                                                                                         |   |
|                              |                                                                                                            |   |
| **PART II  OTHER INFORMATION**    |                                                                                                            |
|                              |                                                                                                            |   |
| Item 1.                           | Legal Proceedings                                                                                               |   |
|                              |                                                                                                            |   |
| Item 6.                           | Exhibits and  Reports on Form 8-K                                                                               |   |
|                              |                                                                                                            |   |
| Signatures                        |                                                                                                            |
|                              |                                                                                                            |
| Exhibit  Index                    |                                                                                                            |

 

1

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**PART I****FINANCIAL INFORMATION**

 

Item 1.             Financial Statements

 

**DYNAMEX INC.**Condensed Consolidated Balance Sheets(in thousands, except per share data)

 
| ** **                                                                                             | ** ** | **October 31,  2004** | ** ** | **July 31,  2004** | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------------|------------|
| ** **                                                                                             | ** ** | **(Unaudited)**            | ** ** | ** **              | ** ** |
| **ASSETS**                                                                                             | ** ** | ** **                 | ** ** | ** **              | ** ** |
| CURRENT                                                                                                |       |                       |       |                    |       |
| Cash and  cash equivalents                                                                             |       | $                          | 4,712      |                    | $          | 7,927 |   |
| Accounts  receivable (net of allowance for doubtful accounts of $822 and $751,  respectively)          |       | 31,351                     |       | 27,355                  |       |
| Prepaid and  other current assets                                                                      |       | 4,109                      |       | 1,825                   |       |
| Deferred  income taxes                                                                                 |       | 2,010                      |       | 2,359                   |       |
| Total  current assets                                                                                  |       | 42,182                     |       | 39,466                  |       |
|                                                                                                   |       |                       |       |                    |       |
| PROPERTY AND  EQUIPMENT - net                                                                          |       | 5,043                      |       | 4,731                   |       |
| GOODWILL                                                                                               |       | 46,118                     |       | 45,271                  |       |
| INTANGIBLES  - net                                                                                     |       | 461                        |       | 475                     |       |
| DEFERRED  INCOME TAXES                                                                                 |       | 10,168                     |       | 10,910                  |       |
| OTHER                                                                                                  |       | 1,346                      |       | 1,219                   |       |
| Total assets                                                                                           |       | $                          | 105,318    |                    | $          | 102,072 |   |
|                                                                                                   |       |                       |       |                    |       |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                         | ** ** | ** **                 | ** ** | ** **              | ** ** |
| CURRENT  LIABILITIES                                                                                   |       |                       |       |                    |       |
| Accounts  payable trade                                                                                |       | $                          | 6,578      |                    | $          | 5,216 |   |
| Accrued  liabilities                                                                                   |       | 15,919                     |       | 17,546                  |       |
| Total  current liabilities                                                                             |       | 22,497                     |       | 22,762                  |       |
|                                                                                                   |       |                       |       |                    |       |
| LONG-TERM  DEBT                                                                                        |       | 8,310                      |       | 10,000                  |       |
| Total  liabilities                                                                                     |       | 30,807                     |       | 32,762                  |       |
|                                                                                                   |       |                       |       |                    |       |
| COMMITMENTS  AND CONTINGENCIES                                                                         |       |                       |       |                    |       |
|                                                                                                   |       |                       |       |                    |       |
| STOCKHOLDERS’  EQUITY                                                                             |       |                       |       |                    |       |
| Preferred  stock; $0.01 par value, 10,000 shares authorized; none outstanding                          |       | —                     |       | —                  |       |
| Common  stock; $0.01 par value, 50,000 shares authorized; 11,486 and 11,435  outstanding, respectively |       | 115                        |       | 114                     |       |
| Additional  paid-in capital                                                                            |       | 75,783                     |       | 75,309                  |       |
| Accumulated  deficit                                                                                   |       | (4,244                     | )          | (7,417                  | )          |
| Accumulated  other comprehensive income                                                                |       | 2,857                      |       | 1,304                   |       |
| Total  stockholders’ equity                                                                       |       | 74,511                     |       | 69,310                  |       |
| Total  liabilities and stockholders’ equity                                                       |       | $                          | 105,318    |                    | $          | 102,072 |   |
|                                                                                                        |            |                            |            |                         |            |  |  |  |  |

 

See accompanying notes to thecondensed consolidated financial statements.

 

2

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**DYNAMEX INC.**Condensed Statements of ConsolidatedOperations(in thousands except per share data)(Unaudited)

 
| ** **                                                   | ** ** | **Three months ended  October 31,** | ** ** |
|--------------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                   | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
|                                                         |       |                                     |       |   |   |
| Sales                                                        |       | $                                        | 76,560     |   | $ | 70,073 |   |
|                                                         |       |                                     |       |   |   |
| Cost of  sales:                                              |       |                                     |       |   |   |
| Purchased  transportation                                    |       | 48,437                                   |       | 43,945 |   |
| Other direct  costs                                          |       | 6,241                                    |       | 6,505 |   |
| Cost of  sales                                               |       | 54,678                                   |       | 50,450 |   |
|                                                         |       |                                     |       |   |   |
| Gross profit                                                 |       | 21,882                                   |       | 19,623 |   |
|                                                         |       |                                     |       |   |   |
| Selling,  general and administrative expenses:               |       |                                     |       |   |   |
| Salaries and  employee benefits                              |       | 11,387                                   |       | 10,867 |   |
| Other                                                        |       | 5,007                                    |       | 4,617 |   |
| Selling,  general and administrative expenses                |       | 16,394                                   |       | 15,484 |   |
|                                                         |       |                                     |       |   |   |
| Depreciation  and amortization                               |       | 376                                      |       | 512 |   |
| (Gain) loss  on disposal of property and equipment           |       | 5                                        |       | (19 | ) |
|                                                         |       |                                     |       |   |   |
| Operating  income                                            |       | 5,107                                    |       | 3,646 |   |
|                                                         |       |                                     |       |   |   |
| Interest  expense                                            |       | 157                                      |       | 332 |   |
| Other  income, net                                           |       | (50                                      | )          | (88 | ) |
|                                                         |       |                                     |       |   |   |
| Income  before income taxes                                  |       | 5,000                                    |       | 3,402 |   |
|                                                         |       |                                     |       |   |   |
| Income taxes                                                 |       | 1,827                                    |       | 1,152 |   |
|                                                         |       |                                     |       |   |   |
| Net income                                                   |       | $                                        | 3,173      |   | $ | 2,250 |   |
|                                                         |       |                                     |       |   |   |
| Basic  earnings per common share:                            |       | $                                        | 0.28       |   | $ | 0.20 |   |
|                                                         |       |                                     |       |   |   |
| Diluted  earnings per common share:                          |       | $                                        | 0.27       |   | $ | 0.20 |   |
|                                                         |       |                                     |       |   |   |
| Weighted  average shares:                                    |       |                                     |       |   |   |
| Common  shares outstanding                                   |       | 11,445                                   |       | 11,237 |   |
| Adjusted  common shares - assuming exercise of stock options |       | 11,695                                   |       | 11,515 |   |

 

See accompanying notes to thecondensed consolidated financial statements.

 

3

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**DYNAMEX INC.**Condensed Statements of Consolidated CashFlows(in thousands)(Unaudited)

 
| ** **                                                                                    | ** ** | **Three months ended  October 31,** | ** ** |
|-----------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                                                    | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
| OPERATING  ACTIVITIES                                                                         |       |                                     |       |   |   |
| Net income                                                                                    |       | $                                        | 3,173      |   | $ | 2,250 |   |
| Adjustments  to reconcile net income to net cash provided by (used in) operating  activities: |       |                                     |       |   |   |
| Depreciation  and amortization                                                                |       | 376                                      |       | 512 |   |
| Amortization  of deferred bank financing fees                                                 |       | 8                                        |       | 64 |   |
| Provision  for losses on accounts receivable                                                  |       | 175                                      |       | 203 |   |
| Stock option  compensation                                                                    |       | 80                                       |       | 49 |   |
| Deferred  income taxes                                                                        |       | 1,092                                    |       | 493 |   |
| Tax benefit  realized by exercise of stock options                                            |       | 126                                      |       | — |   |
| (Gain) loss  on disposal of property and equipment                                            |       | 5                                        |       | (19 | ) |
| Changes in  current operating assets and liabilities:                                         |       |                                     |       |   |   |
| Accounts  receivable                                                                          |       | (4,171                                   | )          | (3,203 | ) |
| Prepaids and  other current assets                                                            |       | (2,259                                   | )          | 268 |   |
| Accounts payable  and accrued liabilities                                                     |       | (263                                     | )          | (488 | ) |
| Net cash  provided by (used in) operating activities                                          |       | (1,658                                   | )          | 129 |   |
|                                                                                          |       |                                     |       |   |   |
| INVESTING  ACTIVITIES                                                                         |       |                                     |       |   |   |
| Purchase of  property and equipment                                                           |       | (615                                     | )          | (928 | ) |
| Net proceeds  from disposal of property and equipment                                         |       | —                                   |       | 10 |   |
| Purchase of  investments                                                                      |       | (154                                     | )          | — |   |
| Net cash  used in investing activities                                                        |       | (769                                     | )          | (918 | ) |
|                                                                                          |       |                                     |       |   |   |
| FINANCING  ACTIVITIES                                                                         |       |                                     |       |   |   |
| Principal  payments on long-term debt                                                         |       | (1,700                                   | )          | (1,604 | ) |
| Net payments  under line of credit                                                            |       | —                                   |       | 1,000 |   |
| Proceeds from  stock option exercise                                                          |       | 268                                      |       | 107 |   |
| Other assets  and deferred financing fees                                                     |       | —                                   |       | (190 | ) |
| Net cash  used in financing activities                                                        |       | (1,432                                   | )          | (687 | ) |
|                                                                                          |       |                                     |       |   |   |
| EFFECT OF  EXCHANGE RATES ON CASH                                                             |       | 644                                      |       | 373 |   |
|                                                                                          |       |                                     |       |   |   |
| NET DECREASE  IN CASH AND CASH EQUIVALENTS                                                    |       | (3,215                                   | )          | (1,103 | ) |
| CASH AND  CASH EQUIVALENTS, BEGINNING OF YEAR                                                 |       | 7,927                                    |       | 4,338 |   |
| CASH AND  CASH EQUIVALENTS, END OF YEAR                                                       |       | $                                        | 4,712      |   | $ | 3,235 |   |
|                                                                                          |       |                                     |       |   |   |
| SUPPLEMENTAL  DISCLOSURE OF CASH FLOW INFORMATION                                             |       |                                     |       |   |   |
| Cash paid  for interest                                                                       |       | $                                        | 112        |   | $ | 282 |   |
| Cash paid  for taxes                                                                          |       | $                                        | 855        |   | $ | 462 |   |

 

See accompanying notes to theconsolidated financial statements.

 

4

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**Notesto Condensed Consolidated Financial Statements (Unaudited)**

 

**1.****                                     ****Summary of Significant AccountingPolices**

 

*Description of Business* - Dynamex Inc. (the “Company” or “Dynamex”) provides same-day deliveryand logistics services in the United States and Canada.  The Company’s primary services are (i)same-day, on-demand delivery, (ii) scheduled and distribution and (iii) fleetoutsourcing and facilities management.

 

The operating subsidiaries of the Company, with countryof incorporation, are as follows:

 

•                                          Dynamex Operations EastInc. (U.S.)

•                                          Dynamex Operations WestInc. (U.S.)

•                                          Dynamex Dedicated FleetServices, Inc. (U.S.)

•                                          Dynamex Fleet Services,Inc. (U.S.)

•                                          Dynamex Canada Corp.(Canada)

•                                          Alpine Enterprises Ltd.(Canada)

•                                          RoadrunnerTransportation, Inc. (U.S.)

•                                          New York DocumentExchange Corp. (U.S.)

 

*Basis ofpresentation -*Theconsolidated financial statements include the accounts of Dynamex Inc. and itswholly-owned subsidiaries.  Allsignificant inter-company accounts and transactions have been eliminated.  All dollar amounts in the financialstatements and notes to the financial statements except per share data arestated in thousands of dollars unless otherwise indicated.  Except as otherwise indicated, references toyears mean our fiscal year ending July 31, 2004 or ended July 31 ofthe year referenced, and comparisons are to the corresponding period of theprior year.

 

Theaccompanying interim financial statements are unaudited.  Certain information and disclosures normallyincluded in financial statements prepared in accordance with generally acceptedaccounting principles have been condensed or omitted, although the Companybelieves the disclosures included herein are adequate to make the informationpresented not misleading.  The results ofthe interim periods presented are not necessarily indicative of results to beexpected for the full fiscal year, and should be read in conjunction with theCompany’s audited financial statements for the fiscal year ended July 31,2004.

 

Theaccompanying interim financial statements contain all adjustments, consistingonly of normal recurring adjustments, necessary for a fair presentation of theCompany’s financial position at October 31, 2004, the results of itsoperations for the three month periods ended October 31, 2004 and 2003,and cash flows for the three month periods ended October 31, 2004 and 2003.  The tax provision for the three month periodsended October 31, 2004 and 2003 are based upon management’s estimate ofthe Company’s annualized effective tax rate.

 

Certain reclassifications have been made toconform prior period data to the current presentation.

 

**2.****                                     ****Comprehensive Income**

 

Thethree components of comprehensive income are net income, foreign currencytranslation adjustments and unrealized gains (losses) on investments.  Investments consist of payroll withholdingsfrom participants in the Company’s deferred compensation plan that are investedin funds designated by the individual participants.  Comprehensive income for the three monthsended October 31, 2004 was as follows:

 

5

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| ** **                         | ** ** | **Three months ended  October 31,** | ** ** |
|------------------------------------|------------|------------------------------------------|------------|
| ** **                         | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
|                               |       |                                     |       |   |   |
| Net income                         |       | $                                        | 3,173      |   | $ | 2,250 |   |
|                               |       |                                     |       |   |   |
| Unrealized  gains on investments   |       | 6                                        |       | — |   |
| Foreign  currency translation gain |       | 1,547                                    |       | 1,026 |   |
|                               |       |                                     |       |   |   |
| Comprehensive  income              |       | $                                        | 4,726      |   | $ | 3,276 |   |

 

**3.****                                     ****Intangibles**

 

At October 31, 2004, intangibles and related amortization expensefor the three months ended October 31, 2004 and 2003 consisted of thefollowing:

 
| ** **                    | ** ** | ** ** | ** ** | **Accumulated**  | ** ** | ** ** | ** ** | **Amortization expense  Three months ended October 31,** | ** ** |
|-------------------------------|------------|------------|------------|------------------|------------|------------|------------|---------------------------------------------------------------|------------|
| ** **                    | ** ** | **Asset**  | ** ** | **amortization** | ** ** | **Net**    | ** ** | **2004**                                                      | ** ** | **2003** | ** ** |
|                          |       |       |       |             |       |       |       |                                                          |       |   |   |
| Deferred  bank financing fees |       | $          | 124        |             | $          | (20        | )          | $                                                             | 104        |   | $ | 8 |   | $ | 64 |   |
|                          |       |       |       |             |       |       |       |                                                          |       |   |   |
| Trademarks  and other         |       | 470        |       | (113             | )          | 357        |       | 5                                                             |       | 5 |   |
|                          |       |       |       |             |       |       |       |                                                          |       |   |   |
| Total                         |       | $          | 594        |             | $          | (133       | )          | $                                                             | 461        |   | $ | 13 |   | $ | 69 |   |

 

Amortizationof deferred financing fees is classified as interest expense in the condensedstatements of consolidated operations. Estimated amortization expense for the succeeding five fiscal years,including deferred bank financing fees, is $55 for 2005, $53 for 2006, $52 for2007, $29 for 2008 and $18 in 2009.

 

**4.****                                     ****Computationof Earnings Per Share**

 

The following is a reconciliation of the numerators anddenominators of the basic and diluted earnings per share computation asrequired by Statement of Financial Accounting Standards No. 128, *Earnings Per Share*. Common stock equivalents related to stock options are excluded fromdiluted earnings per share calculation if their effect would be anti-dilutiveto earnings per share.

 

| ** **                                   | ** ** | **Three months ended  October 31,** | ** ** |
|----------------------------------------------|------------|------------------------------------------|------------|
| ** **                                   | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
|                                         |       |                                     |       |   |   |
| Net income                                   |       | $                                        | 3,173      |   | $ | 2,250 |   |
|                                         |       |                                     |       |   |   |
| Weighted  average common shares outstanding  |       | 11,445                                   |       | 11,237 |   |
|                                         |       |                                     |       |   |   |
| Common share  equivalents related to options |       | 250                                      |       | 278 |   |
|                                         |       |                                     |       |   |   |
| Common  shares and common share equivalents  |       | 11,695                                   |       | 11,515 |   |
|                                         |       |                                     |       |   |   |
| Net income per  common share:                |       |                                     |       |   |   |
| Basic                                        |       | $                                        | 0.28       |   | $ | 0.20 |   |
| Diluted                                      |       | $                                        | 0.27       |   | $ | 0.20 |   |

 

6

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**Item 2****.****          ****Management’s Discussion andAnalysis of Financial Condition and Results of Operations**

 

*This discussion contains forward-looking statements, which involveassumptions regarding Company operations and future prospects.  Although the Company believes itsexpectations are based on reasonable assumptions, such statements are subjectto risk and uncertainty, including, among other things, competition, foreignexchange, and risks associated with the same-day transportation industry.  These and other risks are mentioned from timeto time in the Company’s filings with the Securities and ExchangeCommission.  Caution should be taken thatthese factors could cause the actual results to differ from those stated orimplied in this and other Company communications.*

 

**General**

 

TheCompany, through its national network of same-day delivery and logisticsoperations, is the leading provider of such services in the United States andCanada.

 

Asignificant portion of the Company’s revenues are generated in Canada.  For the three month period ended October 31,2004, Canadian revenues accounted for approximately 33.1% of total consolidatedrevenue, compared to 34.1% for the same period in 2003.  The exchange rate between the Canadian dollarand the U.S. dollar increased 5.9% in the three month period ended October 31,2004 compared to the corresponding period in the prior year.  Had the exchange rate been the same as in theprior period, Canadian sales for the three month period ended October 31,2004 would have accounted for 31.8% of total sales.

 

Sales consist primarily of charges to customers fordelivery services and weekly or monthly charges for recurring services, such asfacilities management.  Sales arerecognized when the service is performed. The yield (value per transaction) for a particular service is dependentupon a number of factors including size and weight of articles transported,distance transported, special handling requirements, requested delivery timeand local market conditions.  Generally,articles of greater weight transported over longer distances and those thatrequire special handling produce higher yields.

 

Costof sales consists of costs relating directly to performance of services,including driver and messenger costs, third party delivery charges,warehousing, facilities management, bad debts, insurance, and workers’compensation costs.  Substantially all ofthe drivers used by the Company provide their own vehicles, and approximately92% of these owner-operators are independent contractors as opposed toemployees of the Company.  Drivers andmessengers are generally compensated based on a percentage of the delivery charge.  Consequently, the Company’s driver andmessenger costs are variable in nature. To the extent that the drivers and messengers are employees of theCompany, employee benefit costs related to them, such as payroll taxes andinsurance, are also included in cost of sales.

 

Selling,general and administrative expenses (“SG & A”) include salaries, wages andbenefit costs incurred at the branch level related to taking orders anddispatching drivers and messengers, as well as administrative costs related to suchfunctions.  Also included in SG &A expenses are regional and corporate level marketing and administrative costsand occupancy costs related to branch and corporate locations.

 

Generally,the Company’s on-demand services provide higher gross profit margins than doscheduled distribution or fleet management services because driver compensationfor on-demand services is generally lower as a percentage of sales from suchservices.  However, scheduleddistribution and fleet management services generally have fewer administrativerequirements related to order taking, dispatching drivers and billing.  As a result of these variances, the Company’smargins are dependent in part on the mix of business for a particular period.

 

Duringthe three months ended October 31, 2004, sales to Office Depot, Inc.represented approximately 9.9% of the Company’s revenue.  Management believes that sales to thiscustomer may exceed 10% of consolidated sales for the full fiscal year.

 

**Critical Accounting Policies**

 

TheCompany’s discussion and analysis of its financial condition and results ofoperations are based on the Company’s financial statements, which have beenprepared in accordance with accounting policies generally accepted in theUnited States of America.  The Company believescertain critical accounting policies, as set forth in the Company’s Form 10-Kfor the year ended July 31, 2004, affect its more significant judgmentsand estimates

 

7

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usedin the preparation of financial statements. As of, and for the three month period ended October 31, 2004, therehave been no material changes or updates to the Company’s critical accountingpolicies.

 

**Results of Operations**

 

Thefollowing table sets forth for the periods indicated, certain items from theCompany’s condensed statements of consolidated operations, expressed as apercentage of sales:

 
| ** **                                         | ** ** | **Three months ended  October 31,** | ** ** |
|----------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                         | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
|                                               |       |                                     |       |   |   |
| Sales                                              |       | 100.0                                    | %          | 100.0 | % |
|                                               |       |                                     |       |   |   |
| Cost of  sales:                                    |       |                                     |       |   |   |
| Purchased  transportation                          |       | 63.3                                     | %          | 62.7 | % |
| Other direct  costs                                |       | 8.1                                      | %          | 9.3 | % |
| Cost of  sales                                     |       | 71.4                                     | %          | 72.0 | % |
|                                               |       |                                     |       |   |   |
| Gross profit                                       |       | 28.6                                     | %          | 28.0 | % |
|                                               |       |                                     |       |   |   |
| Selling,  general and administrative expenses:     |       |                                     |       |   |   |
| Salaries and  employee benefits                    |       | 14.9                                     | %          | 15.5 | % |
| Other                                              |       | 6.5                                      | %          | 6.6 | % |
| Selling,  general and administrative expenses      |       | 21.4                                     | %          | 22.1 | % |
|                                               |       |                                     |       |   |   |
| Depreciation  and amortization                     |       | 0.5                                      | %          | 0.7 | % |
| (Gain) loss  on disposal of property and equipment |       | 0.0                                      | %          | 0.0 | % |
|                                               |       |                                     |       |   |   |
| Operating  income                                  |       | 6.7                                      | %          | 5.2 | % |
|                                               |       |                                     |       |   |   |
| Interest  expense                                  |       | 0.2                                      | %          | 0.5 | % |
| Other  income, net                                 |       | -0.1                                     | %          | -0.1 | % |
|                                               |       |                                     |       |   |   |
| Income  before income taxes                        |       | 6.6                                      | %          | 4.8 | % |
|                                               |       |                                     |       |   |   |
| Income taxes                                       |       | 2.4                                      | %          | 1.6 | % |
|                                               |       |                                     |       |   |   |
| Net income                                         |       | 4.2                                      | %          | 3.2 | % |

 

Thefollowing tables sets forth for the periods indicated, the Company’s salesaccumulated by service type and country:

 
| ** **              | ** ** | **Three months ended  October 31,** | ** ** |
|-------------------------|------------|------------------------------------------|------------|
| ** **              | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
| Sales by  service type: |       |                                     |       |   |   |   |   |   |   |
| On demand               |       | $                                        | 30,640     |   | 40.0 | % | $ | 30,712 |   | 43.8 | % |
| Scheduled/distribution  |       | 22,062                                   |       | 28.8 | % | 18,475 |   | 26.4 | % |
| Outsourcing             |       | 23,858                                   |       | 31.2 | % | 20,886 |   | 29.8 | % |
| Total sales             |       | $                                        | 76,560     |   | 100.0 | % | $ | 70,073 |   | 100.0 | % |
|                    |       |                                     |       |   |   |   |   |   |   |
| Sales by  country:      |       |                                     |       |   |   |   |   |   |   |
| United  States          |       | $                                        | 51,228     |   | 66.9 | % | $ | 46,166 |   | 65.9 | % |
| Canada                  |       | 25,332                                   |       | 33.1 | % | 23,907 |   | 34.1 | % |
| Total sales             |       | $                                        | 76,560     |   | 100.0 | % | $ | 70,073 |   | 100.0 | % |

 

8

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**Three months ended October 31, 2004 compared to three months endedOctober 31, 2003**

 

Netincome for the three months ended October 31, 2004 was $3.2 million ($0.27per fully diluted share) compared to $2.3 million ($0.20 per fully dilutedshare) for the three months ended October 31, 2003.  The increase is attributable to increasedsales, and a higher gross profit margin, which was offset in part by higher SG& A expenses and income taxes.

 

Salesfor the three months ended October 31, 2004 were $77 million, a 9.3%increase over the sales in the same period in 2003 of $70 million.  U.S. sales increased 11% and Canadian salesincreased 5.9%.  The current year quarterhad one less business day than the prior year. On a sales per day basis, sales increased 10.8% in the current yearquarter versus the prior year.  The average conversion rate between the Canadiandollar and the U.S. dollar increased 5.9% over the prior year quarter, whichhad the effect of increasing sales for the three months ended October 31,2004 by approximately $1.4 million had the conversion rate been the same as theprior year period.  Excluding the effectof this increase, sales per day would have been approximately 8.8% higher inthe current quarter compared to the prior year. Canadian sales per day inCanadian dollars increased approximately 1.6% this quarter compared to lastyear.

 

Costof sales for the three months ended October 31, 2004 increased $4.2million, or 8.4%, to $54.7 million from $50.5 million for the same period inthe prior year.  Cost of sales, as apercentage of sales was 71.4% for the three months ended October 31, 2004,the same as the fourth quarter of FY 2004 but lower than the 72% for the sameperiod in the prior year.  The primaryreason for the decrease in cost of sales percentage is a cost saving measureimplemented in the U.S.  Managementexpects the gross margin to decline slightly in future quarters as sales ofscheduled, distribution and outsourcing services continue to grow at a fasterrate than on-demand sales.  On-demandsales generally produce a higher gross margin primarily due to the smaller sizeof delivery vehicles compared to other services; however, on-demand servicesare transaction intensive, requiring higher SG & A costs compared to otherservices.  While on-demand sales willcontinue to be a major component of the Company’s comprehensive service menu,management expects on-demand sales will comprise a smaller portion of overallsales as scheduled, distribution and outsourcing services likely will accountfor the majority of future growth.

 

SG& A expenses for the three months ended October 31, 2004 increased $.9million, or 5.9%, to $16.4 million from $15.5 million for the same period inthe prior year.  Approximately $280 ofthis increase is due to the increase in the exchange rate between the Canadiandollar and the U.S. dollar.  Excludingthe impact of the exchange rate, the largest increase in SG & A wassalaries and benefits ($260).  Thisincrease is primarily attributable to additional personnel necessary to managethe new business and pay commissions on those sales.  The Company also incurred the followingincremental SG & A expenses in this quarter compared to the same quarter inthe prior year: stock options expense ($30), software maintenance costs ($75)and Sarbanes-Oxley consultant costs ($50). As a percentage of sales, SG & A expenses were 21.4% for the threemonths ended October 31, 2004, compared to 22.1% in the same period lastyear.

 

For the three months ended October 31, 2004, depreciation and amortization was $376 compared to $512 for the same period in the prior year.  Management does not expect a significant change in the level of depreciation and amortization expense due to limited capital requirements associated with its non-asset based business.

 

Interestexpense was $157, a decrease of $175 or 52.7% for the current quarter.  This decrease is primarily attributable tolower outstanding debt and a lower interest rate.  Interest expense as a percentage of sales was0.2% in the current quarter compared to 0.5% in the prior period.

 

Theeffective income tax rate was 36.5% for the current quarter compared to 33.9%for the prior year.

 

**Liquidity and Capital Resources**

 

Netcash used in operating activities was $1.7 million for the three months ended October 31,2004 compared to $.1 million net cash provided by operating activities for thesame period in 2003.  The large increasein accounts receivable in the three months ended October 31, 2004 is dueprimarily to the increase in sales during that period and is consistent withchanges in the prior year quarter.  Inaddition, cash was required to prepay annual insurance premiums during thethree months ended October 31, 2004 as opposed to the prior year, wheninsurance premiums were billed and paid on a monthly basis.  Net cash provided by operations, prior tochanges in current operating

 

9

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assetsand liabilities, was $5.0 million for the three months ended October, 2004compared to $3.6 million for the three months ended October 31, 2003 dueprimarily to higher net income.

 

Capitalexpenditures for the three months ended October 31, 2004 wereapproximately $0.6 million.  These expenditures relate primarily toimprovements in the Company’s technology infrastructure to support itsoperations.  Management expects capitalexpenditures to be in the $2 million to $3 million range for the full fiscalyear.  The Company does not havesignificant capital expenditure requirements to replace or expand the number ofvehicles used in its operations because substantially all of its driversprovide their own vehicles.

 

OnMarch 2, 2004, the Company replaced its existing bank credit agreementwith a new $30,000,000 Senior Secured, Revolving Credit Facility that matureson November 30, 2007.  Under theterms of the new facility, interest is payable quarterly at prime, or LIBORplus a margin ranging from 1.25% to 1.75% (1.5% at October 31, 2004),based on the ratio of Funded Debt to EBITDA, as defined in the CreditFacility.  There are no scheduledprincipal payments; however, the Company is required to maintain certainfinancial ratios related to minimum amounts of stockholders’ equity, fixedcharges to cash flow, funded debt to cash flow and funded debt to eligiblereceivables, as defined.  Amounts outstanding under the Credit Facility aresecured by all of the Company’s U.S. assets and 100% of the stock of itsdomestic subsidiaries.  The CreditFacility also contains restrictions on incurring additional debt andinvestments by the Company.  Amountsoutstanding under the Revolving Credit Facility at October 31, 2004included borrowings of $8.3 million and outstanding letters of credit totaling$4.1 million.

 

TheCompany’s EBITDA (earnings before interest, taxes, depreciation andamortization) was approximately $5.5 million (7.2% of sales) for the threemonths ended October 31, 2004, compared to $4.2 million (6.1% of sales) inthe same period last year.  The increaseas a percentage of sales is due to the higher gross margin, partially offset bythe increased SG & A costs mentioned above including salaries and wages,stock options expense, software maintenance, and Sarbanes-Oxley consultantcosts.  Management has included EBITDA inits discussion herein as a measure of liquidity because it believes that it isa widely accepted financial indicator of a company’s ability to service and/orincur indebtedness, maintain current operating levels of fixed assets andacquire additional operations and businesses. EBITDA should not be considered as a substitute for statement ofoperations or cash flow data from the Company’s financial statements, whichhave been prepared in accordance with generally accepted accountingprinciples.  In addition, the Company’sdefinition of EBITDA may not be identical to similarly entitled measures usedby other companies.  The following tablereconciles net income presented in accordance with generally acceptedaccounting principles (“GAAP”) to EBITDA, which is a non-GAAP financialmeasure:

 

| ** **                     | ** ** | **Three months ended  October 31,** | ** ** |
|--------------------------------|------------|------------------------------------------|------------|
| ** **                     | ** ** | **2004**                                 | ** ** | **2003** | ** ** |
|                           |       |                                     |       |   |   |
| Net income                     |       | $                                        | 3,173      |   | $ | 2,250 |   |
| Adjustments:                   |       |                                     |       |   |   |
| Income tax  expense            |       | 1,827                                    |       | 1,152 |   |
| Interest  expense              |       | 157                                      |       | 332 |   |
| Depreciation  and amortization |       | 376                                      |       | 512 |   |
| EBITDA                         |       | $                                        | 5,533      |   | $ | 4,246 |   |

 

Management expects that its future capital requirementswill generally be met from internally generated cash flow.  The Company’s access to other sources ofcapital, such as additional bank borrowings and the issuance of debt securities,is affected by, among other things, general market conditions affecting theavailability of such capital.

 

**Inflation**

 

The Company does not believe that inflation has had amaterial effect on the Company’s results of operations nor does it believe itwill do so in the foreseeable future. However, there can be no assurance the Company’s business will not beaffected by inflation in the future.

 

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**Risk Factors**

 

*In addition to other information inthis report, the following risk factors should be considered carefully inevaluating the Company and its business. This report contains forward-looking statements, which involve risks anduncertainties.  The Company’s actualresults could differ materially from those anticipated in these forward-lookingstatements as a result of certain factors, including those set forth in thefollowing risk factors and elsewhere in this report.*

 

**Certain Tax Matters Related to Drivers**

 

Substantially all of the Company’s drivers supply theirown vehicles and as of October 31, 2004, over 92% of these owner-operatorswere independent contractors as opposed to employees of the Company.  The Company does not pay or withhold anyfederal, state or provincial employment tax with respect to or on behalf ofindependent contractors.  From time totime, taxing authorities in the U.S. and Canada have sought to assert thatowner-operators in the transportation industry, including those utilized by theCompany, are employees, rather than independent contractors.  The Company believes that the owner-operatorsutilized by the Company are not employees under existing interpretations offederal (U.S. and Canadian), state and provincial laws.  However, there can be no assurance thatfederal (U.S. and Canadian), state or provincial authorities will not challengethis position, or that other laws or regulations, including tax laws, orinterpretations thereof, will not change.  If, as a result of any of the foregoing, the Company were required to paywithholding taxes and pay for and administer added employee benefits to thesedrivers, the Company’s operating costs would increase.  Additionally, if the Company is required topay 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 asa result of incorrect classification of such drivers.  Any of the foregoing circumstances could havea material adverse impact on the Company’s financial condition and results ofoperations, and/or require the Company to restate financial information fromprior periods.  The Company hadfiled for an income tax refund for prior years in the U.S., and the InternalRevenue Service (the “IRS”) elected to audit the amended returns for thoseperiods.  As part of this process, theIRS conducted an employment tax audit including a review of our use ofindependent contractors and concluded that no reclassification of independentcontractors was required.

 

In addition to the drivers that are independentcontractors, certain of the Company’s drivers are employed by the Company andsupply and operate their own vehicles during the course of theiremployment.  The Company reimburses theseemployees for all or a portion of the operating costs of those vehicles.  The Company believes that these reimbursementarrangements do not represent additional compensation to those employees.  However, there can be no assurance thatfederal (U.S. and Canadian), state or provincial taxing authorities will notseek to recharacterize some or all of such payments as additionalcompensation.  If such amounts were sorecharacterized, the Company would have to pay additional employment relatedtaxes on such amounts, and may also be required to pay penalties, which couldhave an adverse impact on the Company’s financial condition and results ofoperations, and/or to restate financial information from prior periods.

 

**Claims Exposure**

 

As of October 31, 2004, the Company utilized theservices of approximately 4,400 drivers and messengers.  From time to time such persons are involvedin accidents or other activities that may give rise to liability claims.  The Company currently carries liabilityinsurance with a per occurrence and an aggregate limit of $20 million.  Owner-operators are required to maintainliability insurance of at least the minimum amounts required by applicablestate or provincial law (generally such minimum requirements range from $35 to$75).  The Company also has insurancepolicies covering property and fiduciary trust liability, which coverageincludes all drivers and messengers. There can be no assurance that claims against the Company, whether underthe liability insurance or the surety bonds, will not exceed the applicableamount of coverage, that the Company’s insurer will be solvent at the time ofsettlement of an insured claim, or that the Company will be able to obtaininsurance at acceptable levels and costs in the future.  If the Company were to experience a materialincrease in the frequency or severity of accidents, liability claims, workers’compensation claims or unfavorable resolutions of claims, the Company’sbusiness, financial condition and results of operations could be materiallyadversely affected.  In addition,significant increases in insurance costs could reduce the Company’sprofitability.

 

11

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**Highly Competitive Industr***y*

 

The market for same-day delivery and logistics serviceshas been and is expected to remain highly competitive.  Competition is often intense, particularlyfor basic delivery services.  Highfragmentation and low barriers to entry characterize the industry.  Other companies in the industry compete withthe Company not only for provision of services but also for acquisitioncandidates and qualified drivers.  Someof these companies have longer operating histories and greater financial andother resources than the Company. Additionally, companies that do not currently operate delivery andlogistics businesses may enter the industry in the future.

 

**Foreign Exchange**

 

Significant portions of the Company’s operations areconducted in Canada.  Exchange ratefluctuations between the U.S. and Canadian dollars result in fluctuations inthe amounts relating to the Canadian operations reported in the Company’sconsolidated financial statements.  TheCanadian dollar is the functional currency for the Company’s Canadianoperations; therefore, any change in the exchange rate will affect the Company’sreported sales for such period.  TheCompany historically has not entered into hedging transactions with respect toits foreign currency exposure, but may do so in the future.  There can be no assurance that fluctuationsin foreign currency exchange rates will not have a material adverse effect onthe Company’s business, financial condition or results of operations.

 

**Permits and Licensing**

 

The Company’s delivery operations are subject to variousfederal (U.S. and Canadian), state, provincial and local laws, ordinances andregulations that in many instances require certificates, permits andlicenses.  Failure by the Company tomaintain required certificates, permits or licenses or to comply withapplicable laws, ordinances or regulations could result in substantial fines orpossible revocation of the Company’s authority to conduct certain of itsoperations.

 

**Dependence on Key Personnel**

 

TheCompany’s success is largely dependent on the skills, experience andperformance of certain key members of its management.  The loss of the services of any of these keyemployees 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 itsability to attract and retain skilled personnel in all areas of itsbusiness.  There is strong competitionfor skilled personnel in the same-day delivery and logistics businesses.

 

**Risks Associated with theSame-day Transportation Industry; General Economic Conditions**

 

The Company’s sales and earnings are especiallysensitive to events that affect the same-day transportation industry includingextreme weather conditions, economic factors affecting the Company’s customersand shortages of or disputes with labor, any of which could result in the Company’sinability to service its clients effectively or the inability of the Company toprofitably manage its operations.  Inaddition, downturns in the level of general economic activity and employment inthe U.S. or Canada may negatively impact demand for the Company’s services.

 

**Technological Advances**

 

Technological advances in the nature of facsimile andelectronic mail have affected the market for on-demand document deliveryservices.  Although the Company hasshifted its focus to the distribution of non-faxable items and logisticsservices, there can be no assurance that these or other technologies will nothave a material adverse effect on the Company’s business, financial conditionand results of operations in the future.

 

**Dependence on Availability of QualifiedDelivery Personnel**

 

The Company is dependent upon its ability to attract andretain qualified delivery personnel who possess the skills and experiencenecessary to meet the needs of its operations. The Company competes in markets in which unemployment is relatively lowand the competition for couriers and other employees is intense.  The Company must continually evaluate andupgrade its pool of available delivery and support personnel to keep pace withdemands for delivery services.  There canbe no assurance that qualified delivery personnel will continue to be

 

12

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available in sufficient numbers and on terms acceptableto the Company.  The ability of theCompany to retain owner-operators may also be impacted by our ability to passon fuel cost increases to customers to maintain profit margins and the qualityof driver pay.  The inability to attractand retain qualified delivery personnel would have a material adverse impact onthe Company’s business, financial condition and results of operations.

 

**Fuel Costs**

 

The owner-operators utilized by the Companyare responsible for all vehicle expense including maintenance, insurance, fueland all other operating costs.  TheCompany makes every reasonable effort to include fuel cost adjustments incustomer billings that are paid to owner-operators to offset the impact of fuelprice increases.  If future fuel costadjustments are insufficient to offset owner-operators’ costs, the Company maybe unable to attract a sufficient number of owner-operators which maynegatively impact the Company’s business, financial condition and results ofoperations.

 

**“Safe Harbor” Statement Under ThePrivate Securities Litigation Reform Act**

 

With the exception of historical information, thematters discussed in this report are “forward looking statements” as that termis defined in Section 21E of the Securities Exchange Act of 1934.

 

Several important factors have been identified, whichcould cause actual results to differ materially from those predicted.  By way of example:

 

•                                          The competitive natureof the same-day delivery business.

 

•                                          The ability of theCompany to attract and retain qualified delivery personnel as well as retainkey management personnel.

 

•                                          A change in the currenttax status of independent contractor drivers to employees or a change in thetreatment of the reimbursement of vehicle operating costs to employee drivers.

 

•                                          A significant reductionin the exchange rate between the Canadian dollar and the U.S. dollar.

 

•                                          Failure of the Companyto maintain required certificates, permits or licenses or to comply withapplicable laws, ordinances or regulations could result in substantial fines orpossible revocation of the Company’s authority to conduct certain of its operations.

 

•                                          The ability of theCompany to obtain adequate financing.

 

•                                          The ability of theCompany to retain owner-operators may be impacted by our ability to pass onfuel cost increases to customers to maintain profit margins and the quality ofdriver pay.

 

**Item 3****.****                      ****Quantitative and QualitativeDisclosures About Market Risk**

 

**Foreign Exchange Exposure**

 

Significantportions 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 theCanadian operations reported in the Company’s consolidated financialstatements.  The Company historically hasnot entered into hedging transactions with respect to its foreign currencyexposure, but may do so in the future.

 

Thesensitivity analysis model used by the Company for foreign exchange exposurecompares the revenue and net income figures from Canadian operations, at theactual exchange rate, to a 10% decrease in the exchange rate.  Based on this model, a 10% decrease wouldresult in a decrease in quarterly revenue of approximately $2.5 million and adecrease in quarterly net income of approximately $.1 million.  There can be no assurances that the aboveprojected exchange rate decrease will materialize.  Fluctuations of exchange rates are beyond thecontrol of the Company’s management.

 

13

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**Interest Rate Exposure**

 

TheCompany has entered into an interest rate protection arrangement on a portionof the Credit Facility.  The interestrate has been fixed at the LIBOR margin plus 1.49% (2.99% at October 31,2004).  This hedging agreement expires onNovember 30, 2005.  The Company doesnot hold or issue derivative financial instruments for speculative or tradingpurposes.

 

Thesensitivity analysis model used by the Company for interest rate exposurecompares interest expense fluctuations over a one-year period based on currentdebt levels and current interest rates versus current debt levels at currentinterest rates with a 10% increase. Based on this model, a 10% increase would result in an increase ininterest expense of approximately $13. There can be no assurances that the above projected interest rateincrease will materialize.  Fluctuationsof interest rates are beyond the control of the Company’s management.

 

**Item 4****.****          ****Controlsand Procedures**

 

An evaluation was carried out under the supervision andwith the participation of the Company’s management, including its ChiefExecutive Officer and Chief Financial Officer, of the effectiveness of thedesign and operation of its disclosure controls and procedures (as defined inRule 13a-14(c) under the Securities Exchange Act of 1934) as of October 31,2004 (the end of the period covered by this Quarterly Report on Form10-Q).  Based upon the evaluation, theChief Executive Officer and Chief Financial Officer concluded that the designand operation of these disclosure controls and procedures were effective.

 

There were no significant changes in the Company’sinternal controls or in other factors that could significantly affect thesecontrols subsequent to the date of their evaluation, including any correctiveactions with regard to significant deficiencies and material weaknesses.

 

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**PART II****OTHER INFORMATION**

 

**Item 1.****          ****Legal Proceedings**

 

The Company is a party to various legalproceedings arising in the ordinary course of its business.  Management believes that the ultimateresolution of these proceedings will not, in the aggregate, have a materialadverse effect on the financial condition, results of operations, or liquidityof the Company.

 

**Item 6.****          ****Exhibits and Reports on Form 8-K**

 

(a)                                  Exhibits:

 

31.1                           Certification of Chief Executive Officer ofthe Registrant, pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)

 

31.2                           Certification of Chief Financial Officer ofthe Registrant, pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)

 

32.1                           Certification of Chief Executive Officer ofthe Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002

 

32.2                           Certification of Chief Financial Officer ofthe Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002

 

(b)                                 Reports on Form 8-K:

 

Report on Form 8-K filed on September 17, 2004concerning the September 15, 2004 press release announcing fourth quarterfiscal year 2004 results.

 

Report on Form 8-K filed on September 20, 2004reporting the election of David P. Fortune to the position of CorporateController.

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

 
|   |                  |   | **DYNAMEX INC.**                              |
|--------|-----------------------|--------|-----------------------------------------------|
|   |                  |   | ** **                                    |
|   |                  |   | ** **                                    |
| Dated: | December 6, 2004 | by     | /s/ Richard K. McClelland                     |
|   |                  |   | Richard K. McClelland                         |
|   |                  |   | President, Chief Executive Officer and        |
|   |                  |   | Chairman of the Board                         |
|   |                  |   | (Principal Executive Officer)                 |
|   |                  |   |                                          |
|   |                  |   |                                          |
| Dated: | December 6, 2004 | by     | /s/ Ray E. Schmitz                            |
|   |                  |   | Ray E. Schmitz                                |
|   |                  |   | Vice President – Chief Financial Officer |
|   |                  |   | (Principal Financial Officer)                 |
|   |                  |   |                                          |
|   |                  |   |                                          |
| Dated: | December 6, 2004 | by     | /s/ David P. Fortune                          |
|   |                  |   | David P. Fortune                              |
|   |                  |   | Corporate Controller                          |
|   |                  |   | (Principal Accounting Officer)                |

 

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**EXHIBIT INDEX**

 

| **Exhibits** | ** ** | ** **                                                                                                                                                                       |
|--------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |       |                                                                                                                                                                             |
| 31.1         |       | 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 2002 |
|         |       |                                                                                                                                                                             |
| 32.2         |       | 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 |

 

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