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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  OR o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  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 o Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes x   No o The number of shares of the registrants common stock, $.01 par value,
outstanding as of March 5, 2004 was 11,306,417 shares.




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DYNAMEX INC. 
 INDEX PagePart I. Financial InformationItem 1.
    
    Financial Statements.Condensed Consolidated Balance Sheets
January 31, 2004 (Unaudited) and July 31, 2003
    
    
    2Condensed Statements of Consolidated Operations (Unaudited)
Three and Six Months ended January 31, 2004 and 2003
    
    
    3Condensed Statements of Consolidated Cash Flows (Unaudited)
Six Months ended January 31, 2004 and 2003
    
    
    4Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    8Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    17Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    18Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    18Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    18Signature
    
    
    19Exhibit Index
    
    
    E-1Certification of Chief Executive OfficerCertification of Chief Financial OfficerCertification Pursuant to 18 U.S.C. Section 1350Certification Pursuant to 18 U.S.C. Section 1350
  1




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DYNAMEX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) 
 January 31,
    
    July 31,2004
    
    2003(Unaudited)ASSETSCURRENTCash and cash equivalents
    
    $
    5,636
    
    
    $
    4,338Accounts receivable (net of allowance for doubtful accounts
of $748 and $721, respectively)
    
    
    28,234
    
    
    
    26,109Prepaid and other current assets
    
    
    1,867
    
    
    
    2,453Deferred income tax
    
    
    1,696
    
    
    
    1,976Total current assets
    
    
    37,433
    
    
    
    34,876Property and equipment  net
    
    
    4,549
    
    
    
    4,287Goodwill
    
    
    45,291
    
    
    
    44,743Intangibles  net
    
    
    843
    
    
    
    981Deferred income taxes
    
    
    13,184
    
    
    
    10,064Other assets
    
    
    1,134
    
    
    
    590Total assets
    
    $
    102,434
    
    
    $
    95,541LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable trade
    
    $
    6,223
    
    
    $
    6,564Accrued liabilities
    
    
    14,878
    
    
    
    14,805Current
portion of long-term debt
    
    
    5,499
    
    
    
    5,728Total current liabilities
    
    
    26,600
    
    
    
    27,097LONG-TERM DEBT
    
    
    12,366
    
    
    
    14,116Total liabilities
    
    
    38,966
    
    
    
    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;
11,302 and 11,208 outstanding, respectively
    
    
    113
    
    
    
    112Additional paid-in capital
    
    
    74,819
    
    
    
    74,064Accumulated deficit
    
    
    (12,780
    )
    
    
    (20,250
    )Unrealized foreign currency translation adjustment
    
    
    1,316
    
    
    
    402Total stockholders equity
    
    
    63,468
    
    
    
    54,328Total liabilities and stockholders equity
    
    $
    102,434
    
    
    $
    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
    
    Six months endedJanuary 31,
    
    January 31,2004
    
    2003
    
    2004
    
    2003Sales
    
    $
    69,375
    
    
    $
    59,331
    
    
    $
    139,449
    
    
    $
    121,063Cost of sales
    
    
    49,812
    
    
    
    41,997
    
    
    
    100,262
    
    
    
    85,306Gross profit
    
    
    19,563
    
    
    
    17,334
    
    
    
    39,187
    
    
    
    35,757Selling, general and administrative expenses
    
    
    16,379
    
    
    
    14,061
    
    
    
    31,863
    
    
    
    28,402Depreciation and amortization
    
    
    467
    
    
    
    511
    
    
    
    979
    
    
    
    1,091(Gain) loss on disposal of property and equipment
    
    
    (2
    )
    
    
    (19
    )
    
    
    (20
    )
    
    
    13Operating income
    
    
    2,719
    
    
    
    2,781
    
    
    
    6,365
    
    
    
    6,251Interest expense
    
    
    322
    
    
    
    604
    
    
    
    654
    
    
    
    1,217Other income
    
    
    (14
    )
    
    
    (60
    )
    
    
    (103
    )
    
    
    (74
    )Income before taxes
    
    
    2,411
    
    
    
    2,237
    
    
    
    5,814
    
    
    
    5,108Income tax expense (benefit)
    
    
    (2,808
    )
    
    
    930
    
    
    
    (1,656
    )
    
    
    1,833Net income
    
    $
    5,219
    
    
    $
    1,307
    
    
    $
    7,470
    
    
    $
    3,275Basic earnings per common share
    
    $
    0.46
    
    
    $
    0.12
    
    
    $
    0.66
    
    
    $
    0.29Diluted earnings per common share:
    
    $
    0.45
    
    
    $
    0.12
    
    
    $
    0.65
    
    
    $
    0.29Weighted average shares:Common shares outstanding
    
    
    11,271
    
    
    
    11,208
    
    
    
    11,254
    
    
    
    11,207Adjusted common shares  assuming
exercise of stock options
    
    
    11,491
    
    
    
    11,334
    
    
    
    11,499
    
    
    
    11,300
 See accompanying notes to condensed consolidated financial statements. 3




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DYNAMEX INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(in thousands)
(Unaudited) 
 Six months endedJanuary 31,2004
    
    2003OPERATING ACTIVITIESNet income
    
    $
    7,470
    
    
    $
    3,275Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    979
    
    
    
    1,091Provision for losses on accounts receivable
    
    
    382
    
    
    
    314Deferred income taxes
    
    
    (2,840
    )
    
    
    1,020Stock option compensation
    
    
    202
    
    
    
    (Gain) loss on disposal of property and equipment
    
    
    (20
    )
    
    
    13Changes in current operating assets and liabilities:Accounts receivable
    
    
    (2,507
    )
    
    
    (848
    )Prepaids and other assets
    
    
    585
    
    
    
    1,417Accounts payable and accrued liabilities
    
    
    (267
    )
    
    
    107Net cash provided by operating activities
    
    
    3,984
    
    
    
    6,389INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (1,198
    )
    
    
    (1,044
    )Net proceeds from disposal of property and equipment
    
    
    12
    
    
    
    29Net cash used in investing activities
    
    
    (1,186
    )
    
    
    (1,015
    )FINANCING ACTIVITIESPrincipal payments on long-term debt
    
    
    (2,979
    )
    
    
    (2,900
    )Net borrowings under line of credit
    
    
    1,000
    
    
    
    (1,100
    )Net proceeds from sale of common stock
    
    
    555
    
    
    
    3Other assets and deferred financing fees
    
    
    (418
    )
    
    
    (177
    )Net cash used in financing activities
    
    
    (1,842
    )
    
    
    (4,174
    )EFFECT OF EXCHANGE RATES ON CASH
    
    
    342
    
    
    
    291NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    1,298
    
    
    
    1,491CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    4,338
    
    
    
    4,489CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    5,636
    
    
    $
    5,980SUPPLEMENTAL DISCLOSURE ON NON-CASH INFORMATIONCash paid for interest
    
    $
    491
    
    
    $
    900Cash paid for taxes
    
    $
    982
    
    
    $
    378
 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 January 31, 2004, the
results of its operations for the three and six month periods ended January 31,
2004 and 2003, and cash flows for the six month periods ended January 31, 2004
and 2003. The tax provision for the three and six month periods ended January
31, 2004 and 2003 are based upon managements estimate of the Companys
annualized effective tax rate and realization of U.S. taxable net operating losses. 2. COMPREHENSIVE INCOME Comprehensive income for the three and six months ended January 31, 2004 was
$5,107 and $8,384, respectively, compared to $1,605 and $3,783, for the same
periods ended January 31, 2003. The two components of comprehensive income are
net income and foreign currency translation adjustments. The changes in the
exchange rate between the U.S. dollar and the Canadian dollar resulted in a
foreign currency translation loss of $112 and a gain of $914 in the three and
six month periods ended January 31, 2004, respectively, compared to gains of
$298 and $508 for the same periods in the prior year. 3. INTANGIBLES At January 31, 2004, intangibles and related amortization expense for the three
and six months ended January 31, 2004 and 2003 consist of the following: Amortization ExpenseThree Months
    
    Six MonthsEnded January 31,
    
    Ended January 31,AccumulatedAsset
    
    Amortization
    
    Net
    
    2004
    
    2003
    
    2004
    
    2003Deferred bank financing fees
    
    
    920
    
    
    
    449
    
    
    
    471
    
    
    
    64
    
    
    
    188
    
    
    
    128
    
    
    
    339Trademarks and other
    
    
    470
    
    
    
    98
    
    
    
    372
    
    
    
    5
    
    
    
    5
    
    
    
    11
    
    
    
    11Total
    
    $
    1,390
    
    
    $
    547
    
    
    $
    843
    
    
    $
    69
    
    
    $
    193
    
    
    $
    139
    
    
    $
    350
 5




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DYNAMEX INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited) 
 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
$277 for 2004, $277 for 2005, $106 for 2006 and approximately $20 per year
thereafter. 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
    
    Six months endedJanuary 31,
    
    January 31,2004
    
    2003
    
    2004
    
    2003Net income
    
    $
    5,219
    
    
    $
    1,307
    
    
    $
    7,470
    
    
    $
    3,275Weighted average common
shares outstanding
    
    
    11,271
    
    
    
    11,208
    
    
    
    11,254
    
    
    
    11,207Common share equivalents related
to options and warrants
    
    
    314
    
    
    
    126
    
    
    
    245
    
    
    
    93Common shares and common share
equivalents
    
    
    11,585
    
    
    
    11,334
    
    
    
    11,499
    
    
    
    11,300Net income per common share:Basic
    
    $
    0.46
    
    
    $
    0.12
    
    
    $
    0.66
    
    
    $
    0.29Diluted
    
    $
    0.45
    
    
    $
    0.12
    
    
    $
    0.65
    
    
    $
    0.29
 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 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 six month
periods ended January 31, 2004, the company recognized $153 and $202,
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: 6




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DYNAMEX INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited) 
 Three months
    
    Six monthsended
    
    endedJanuary 31,
    
    January 31,2003
    
    2003Net income:As reported
    
    $
    1,307
    
    
    $
    3,275Deduct: Total stock based compensation
expense determined under fair value based
method for all awards, net of related tax effects
    
    
    62
    
    
    
    130Pro forma net income
    
    $
    1,245
    
    
    $
    3,145Earning per share:Basic  as reported
    
    $
    0.12
    
    
    $
    0.29Basic  pro forma
    
    $
    0.11
    
    
    $
    0.27Diluted  as reported
    
    $
    0.12
    
    
    $
    0.29Diluted  pro forma
    
    $
    0.11
    
    
    $
    0.27
 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 a 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 six month periods ended January 31, 2004, Canadian revenues
accounted for approximately 33.8% and 34.0%, respectively of total consolidated
revenue, compared to 33.5% in each period during 2003. The exchange rate
translating the Canadian dollar to the U.S. dollar increased 19.1% and 17.5%,
respectively, in the three and six month periods ended January 31, 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 six
month periods ended January 31, 2004 would have accounted for 30.0% and 30.4%,
respectively, of total sales. Results of Operations Three months ended
    
    Six months endedJanuary 31,
    
    January 31,2004
    
    2003
    
    2004
    
    2003Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    71.8
    %
    
    
    70.8
    %
    
    
    71.9
    %
    
    
    70.5
    %Gross profit
    
    
    28.2
    %
    
    
    29.2
    %
    
    
    28.1
    %
    
    
    29.5
    %Selling, general and administrative expenses
    
    
    23.6
    %
    
    
    23.7
    %
    
    
    22.8
    %
    
    
    23.5
    %Depreciation and amortization
    
    
    0.7
    %
    
    
    0.9
    %
    
    
    0.7
    %
    
    
    0.9
    %(Gain) loss on disposal of property and equipment
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Operating income
    
    
    3.9
    %
    
    
    4.6
    %
    
    
    4.6
    %
    
    
    5.1
    %Interest expense
    
    
    0.5
    %
    
    
    1.0
    %
    
    
    0.5
    %
    
    
    1.0
    %Other income
    
    
    0.0
    %
    
    
    -0.1
    %
    
    
    -0.1
    %
    
    
    -0.1
    %Income before taxes
    
    
    3.4
    %
    
    
    3.7
    %
    
    
    4.2
    %
    
    
    4.2
    %Income tax expense
    
    
    -4.0
    %
    
    
    1.6
    %
    
    
    -1.2
    %
    
    
    1.5
    %Net income
    
    
    7.4
    %
    
    
    2.1
    %
    
    
    5.4
    %
    
    
    2.7
    %
 Three months ended January 31, 2004 compared to three months ended January 31, 2003 Net income for the three months ended January 31, 2004 was $5.2 million ($0.45
per 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
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 the current quarter, resulting in a credit to income tax expense of
approximately $3.7 million. Excluding the effects of this reversal, net income
for the three months ended January 31, 2004 was $1.6 million ($0.14 per share)
compared to $1.3 million ($0.12 per share) for the three months ended January
31, 2003. The increase was attributable to increased sales volume and the
associated increase in gross profit, lower depreciation expense, interest
expense and income taxes, which were offset in part by higher selling, general
and administrative expenses (SG & A). Sales for the three months ended January 31, 2004 were $69 million, a 16.9%
increase over the sales in the same period in 2003 of $59 million. Sales in
the U.S. increased $6.5 million, or 16.4% largely due to new business startups
and the expansion of services to several large national customers. The average
conversion rate between the Canadian dollar and the U.S. dollar increased 19%
over the prior year quarter, which had the effect of increasing sales for the
three months ended January 31, 2004 by approximately $3.8 million had the
conversion rate been the same as the prior year period. Excluding 8




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ITEM 2.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 the effect
of this increase, sales would have been approximately 10.6% higher in the
current quarter compared to the prior year. Scheduled, distribution and
outsourcing services increased $10 million (32%) compared to the prior year
while on-demand sales remained relatively flat. Excluding the effect of the
increase in the exchange rate between the Canadian dollar and the U.S. dollar,
on-demand sales decreased in the current quarter approximately $1.6 million, or
5.9% and scheduled, distribution and outsourcing services increased $7.9
million, or 25.1%. Cost of sales for the three months ended January 31, 2004 increased $7.8
million, or 18.6%, to $49.8 million from $42 million for the same period in 2003. Cost of sales, as a
percentage of sales, increased to 71.8% for the three months ended January 31,
2004 from 70.8% for the same period ended in 2003. The primary reason for the
increase in cost of sales percentage continues to be the change in business
mix. Sales of scheduled, distribution and outsourcing services are growing
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 than other services. While on-demand sales will continue to
be a major component of our comprehensive service menu, management expects
on-demand sales to continue to decline as a percentage of total sales.
On-demand sales were approximately 40% of total sales in the current year
quarter compared to 47% in the prior year. SG & A expenses for the three months ended January 31, 2004 increased $2.3
million, or 16.5%, to $16.4 million from $14.1 million for the same period in
2003. Approximately $0.8 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 ($0.6 million). The Company hired additional personnel to manage and
service the significant new business startups and paid sales commissions on
this new business. Startup costs as well as certain operating inefficiencies
associated with establishing new operations in approximately 20 markets had a
temporary negative impact on operating income in this quarter. During this
critical startup phase, management was focused on successful transitions and
meeting customers delivery requirements. With the completion of the startup
phase in late February 2004, we expect to make certain operational adjustments
that will improve profitability of these three-year contracts over their
remaining life. 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 ($130,000), stock options expense
($150,000), and investment in a customer relationship management system and
training for our sales force ($165,000). Other increases include facilities
and communications costs ($165,000), travel costs and other costs related to
new business start-ups ($100,000), software maintenance ($70,000), and
additional professional fees incurred in connection with the Sarbanes-Oxley
mandated reporting ($70,000). As a percentage of sales, SG & A expenses were
23.6% for the three months ended January 31, 2004, compared to 23.7% in the
same period last year. For the three months ended January 31, 2004, depreciation and amortization was
slightly lower ($44,000) than it was for the same period ended in 2003.
Management expects that this expense will remain relatively flat over the next
several quarters. Interest expense for the three months ended January 31, 2004 was $0.3 million,
down 47% from the prior year period. 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 January 31, 2004 was 4.74%, compared to
5.74% at January 31, 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. The effective income tax rate, before the reversal of the valuation allowance
on the Companys net operating loss carryforward, declined from 42% in the
three month period ended January 31, 2003 to 35% in the current period. The
primary reason for this decline is the increase in U.S. taxable income that is
substantially offset by the utilization of the net operating loss carryforwards
generated in prior years. This decline is partially offset by a marginally
higher tax rate in Canada in the current year period. Six months ended January 31, 2004 compared to six months ended January 31, 2003 Net income for the six months ended January 31, 2004 was $7.5 million ($0.65
per share). Excluding the effects of the reversal of the valuation allowance
on the net operating loss carryforward, net income for the six months ended
January 31, 2004 was $3.8 million ($0.33 per share) compared to net income of
$3.3 million ($0.29 per 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 slightly higher income tax expense. 9




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##### Table of Contents



ITEM 2.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 Sales for the six months ended January 31, 2004 increased $18.4 million, or
15.2%, to $139 million from $121 million for the same period in 2003. The
average conversion rate between the Canadian dollar and the U.S. dollar
increased 17.5% over the prior year period, which had the effect of increasing
sales for the six months ended January 31, 2004 by approximately $7 million had
the conversion rate been the same as the prior year period. Excluding the
effect of this increase, sales would have been approximately 9.4% higher in the
six months ended January 31, 2004 compared to the prior year. Scheduled,
distribution and outsourcing services increased $17.4 million (27.4%) compared
to the prior year while on-demand sales increased $0.9 million (1.7%).
Excluding the effect of the increase in the exchange rate between the Canadian
dollar and the U.S. dollar, on-demand sales decreased in the current period
approximately $2.3 million, or 4% and scheduled, distribution and outsourcing
services increased $13.6 million, or 21.5%. Cost of sales for the six months ended January 31, 2004 increased $15 million,
or 17.5%, to $100 million and as a percentage of sales from 70.5% to 71.9%
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 58% and 52% of total sales in the
six months ended January 31, 2004 and 2003, respectively. On-demand sales were
approximately 42% of total sales in the current year period compared to 48% in
the prior year. SG & A expenses for the six months ended January 31, 2004 increased $3.5
million, or 12.2%, to $31.9 million from $28.4 million for the same period in
2003. Approximately $1.4 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 ($1.1 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 Company also incurred the following additional
costs in this period compared to the same period in the prior year; stock
options expense ($200,000), software maintenance ($125,000), higher medical and
state unemployment insurance premiums ($260,000), 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 ($70,000). As a percentage of sales, SG & A expenses were 22.8% for
the six months ended January 31, 2003, compared to 23.5% in the same period
last year. Depreciation and amortization for the six months ended January 31, 2004 was
$1.0 million compared to $1.1 million for the same period in 2003. Management
does not expect a significant change in the level of depreciation and
amortization expense in near future. Interest expense decreased $0.6 million or 46% for the six months ended January
31, 2004 compared to same period in 2003 and as a percentage of sales, to 0.5%
from 1.0%. This decrease primarily results from lower debt levels, rates and
amortization of deferred financing costs. The effective income tax rate, before the reversal of the valuation allowance
on the Companys net operating loss carryforward, declined from 36% in the six
month period ended January 31, 2003 to 34% in the current period. The primary
reason for this decline is the increase in U.S. taxable income that is
substantially offset by the utilization of the net operating loss carryforwards
generated in prior years, and further by a marginally lower tax rate in Canada
in the current year period. In addition, the Companys Canadian subsidiary
paid a $0.8 million dividend to the U.S. in October 2003. The tax impact of
this dividend was a $174,000 reduction in tax expense due to the realization of
a foreign tax credit. Liquidity and Capital Resources Net cash provided by operating activities was $4.0 million for the six months
ended January 31, 2004 compared to $6.4 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 $6.2 million for the six months
ended January 31, 2004 compared to $5.7 million for the six months ended
January 31, 2003 due primarily to higher net income. The large increase in
accounts receivable in the six months ended January 31, 2004 is due primarily
to the increase in sales during that period. 10




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ITEM 2.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 Capital expenditures for the six months ended January 31, 2004 were
approximately $1.2 million. Management expects annual 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. As of January 31, 2004, the Companys bank credit agreement (Credit Agreement)
consisted of an amortizing term loan of $8.9 million and a revolving credit
facility of $19.5 million due November 30, 2005. Amounts outstanding under the
revolving credit facility included borrowings of $9 million and outstanding
letters of credit totaling $3.7 million. Interest on outstanding borrowings is
payable monthly at prime plus a margin ranging from 0.5% to 0.0%, or LIBOR plus
a margin ranging from 3.5% to 2.0%, based on the ratio of Total Debt to EBITDA,
as defined. The Company has entered into an interest rate protection
arrangement on the amortizing term loan portion of the Credit Facility. The
interest rate has been fixed at the LIBOR margin plus 1.49% (4.99% at January
31, 2004). This arrangement matures November 30, 2005. Amounts outstanding
under the Credit Agreement are secured by all of the Companys U.S. assets and
100% of the stock of its principal Canadian subsidiaries. The Credit Agreement
also contains restrictions on the payment of dividends, incurring additional
debt, capital expenditures and investments by the Company as well as requiring
the Company to maintain certain financial ratios. Generally, the Company must
obtain the lenders consent to consummate any acquisition. The Companys EBITDA (earnings before interest, taxes, depreciation and
amortization) was approximately $7.4 million (5.3% of sales) for the six months
ended January 31, 2004, compared to $7.4 million (6.1% 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, Siebel sales 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 (loss) presented in accordance with generally accepted
accounting principles (GAAP) to EBITDA, which is a non-GAAP financial measure
(in thousands): Three months ended
    
    Six months endedJanuary 31,
    
    January 31,2004
    
    2003
    
    2004
    
    2003Net income
    
    $
    5,219
    
    
    $
    1,307
    
    
    $
    7,470
    
    
    $
    3,275Adjustments:Income tax expense (benefit)
    
    
    (2,808
    )
    
    
    930
    
    
    
    (1,656
    )
    
    
    1,833Interest expense
    
    
    322
    
    
    
    604
    
    
    
    654
    
    
    
    1,217Depreciation and amortization
    
    
    467
    
    
    
    511
    
    
    
    979
    
    
    
    1,091EBITDA
    
    $
    3,200
    
    
    $
    3,352
    
    
    $
    7,447
    
    
    $
    7,416
 The Companys cash flows from operations for the six months ended January 31,
2004 were approximately $4.0 million. Consequently, purchases of property and
equipment and payments of long-term debt were financed entirely by internally
generated cash flow. On March 2, 2004, the Company replaced its existing bank credit facility 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%, based
on the ratio of Funded Debt to EBITDA (1.5% at March 1, 2004). 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. 11




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##### Table of Contents



ITEM 2.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 As a result of this new credit facility, the remaining balance of unamortized
deferred financing costs of $471,000 associated with the existing Credit
Agreement will be expensed in the fiscal 2004 third quarter. Excluding this
charge, the Company expects a quarterly interest expense reduction of
approximately $55,000. 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 January 31, 2004 the Company has a U.S. net operating loss carryforward
totaling approximately $10.6 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 $1.0 million
through the first six 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 36%.
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
January 31, 2004, approximately 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 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 12




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ITEM 2.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 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 January 31, 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. 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. 13




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##### Table of Contents



ITEM 2.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 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.
    
    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. 14




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##### Table of Contents



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 $2.3 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 the
amortizing term loan portion of the Credit Facility. The interest rate has
been fixed at the LIBOR margin plus 1.49% (4.99% at January 31, 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. 15




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##### Table of Contents



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 January 31, 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. 16




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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 4. Submission of Matters to a Vote of Security Holders. We held our Annual Meeting of Shareholders on January 13, 2004. At the
meeting, our shareholders voted on the following three proposals: Proposal 1: To elect the following nominees as directors: Nominee
    
    For
    
    WithheldRichard K. McClelland
    
    
    9,998,778
    
    
    
    124,366Kenneth H. Bishop
    
    
    9,818,854
    
    
    
    304,290Brian J. Hughes
    
    
    10,008,688
    
    
    
    114,456Wayne Kern
    
    
    10,009,624
    
    
    
    113,520Stephen P. Smiley
    
    
    9,908,254
    
    
    
    214,890Bruce E. Ranck
    
    
    9,909,378
    
    
    
    213,766
 Proposal No. 2: To ratify the appointment of BDO Seidman, LLP as
independent auditors of the Company for the year ending July 31, 2004: For
    
    Against
    
    Abstentions
    
    Broker Non-Votes10,078,473
    
    6,513
    
    38,158
    
    -0-
 
 Item 6. Exhibits and Reports on Form 8-K. (a) 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 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: None 17




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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: March 8, 2004
    by
    /s/ Richard K. McClellandRichard K. McClellandPresident, Chief Executive Officer and
Chairman of the Board
(Principal Executive Officer) Dated: March 8, 2004
    by
    /s/ Ray E. SchmitzRay E. SchmitzVice President  Chief Financial Officer
(Principal Financial Officer) Dated: March 8, 2004
    by
    /s/ George S. StephensGeorge S. StephensCorporate Controller
(Principal Accounting Officer) 18




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##### Table of Contents



EXHIBIT INDEX Exhibits31.1
    
    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
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