##### Table of Contents



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 EXCHANGE ACT OF 1934
 For the quarterly period ended April 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 000-21057
 DYNAMEX INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    86-0712225(State of incorporation)
    
    (I.R.S. Employer Identification No.)5429 LBJ Freeway, Suite 1000, Dallas, Texas
    
    75240(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
(214) 560-9000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o(Do not check if a smaller reporting
company)
    
    Smaller reporting company o
 o þ




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##### 



DYNAMEX INC.
 INDEX
 PagePART IFINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets 

April 30, 2009 (Unaudited) and July 31, 2008
    
    2Condensed Statements of Consolidated Operations (Unaudited) 

Three and nine months ended April 30, 2009 and 2008
    
    3Condensed Statements of Consolidated Cash Flows (Unaudited) 

Nine months ended April 30, 2009 and 2008
    
    4Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    9Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    16Item 4. Controls and Procedures
    
    17PART IIOTHER INFORMATIONItem 1. Legal Proceedings
    
    18Item 1A. Risk Factors
    
    20Item 6. Exhibits
    
    23Signatures
    
    24Exhibit Index
    
    E-1EX-31.1EX-31.2EX-32.1EX-32.2
  1




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
  DYNAMEX INC.
 
   April 30,
    
    
    July 31,2009
    
    
    2008(Unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    10,422
    
    
    $
    19,888Accounts receivable (net of allowance for doubtful accounts
of $1,777 and $915, respectively)
    
    
    43,247
    
    
    
    47,288Income taxes receivable
    
    
    2,989
    
    
    
    1,546Prepaid and other current assets
    
    
    4,079
    
    
    
    4,429Deferred income taxes
    
    
    4,099
    
    
    
    3,504Total current assets
    
    
    64,836
    
    
    
    76,655PROPERTY AND EQUIPMENT  net
    
    
    11,237
    
    
    
    8,670GOODWILL
    
    
    46,358
    
    
    
    48,109INTANGIBLES  net
    
    
    606
    
    
    
    808OTHER
    
    
    3,077
    
    
    
    4,382Total assets
    
    $
    126,114
    
    
    $
    138,624LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable trade
    
    $
    8,867
    
    
    $
    12,621Accrued liabilities and other
    
    
    21,397
    
    
    
    24,160Total current liabilities
    
    
    30,264
    
    
    
    36,781LONG-TERM DEBT
    
    
    
    
    
    
    OTHER LONG-TERM LIABILITIES
    
    
    4,673
    
    
    
    4,209Total liabilities
    
    
    34,937
    
    
    
    40,990COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITYPreferred stock; $0.01 par value, 10,000 shares authorized;
none outstanding
    
    
    
    
    
    
    Common stock; $0.01 par value, 50,000 shares authorized;
9,713 and 10,148 outstanding, respectively
    
    
    97
    
    
    
    101Additional paid-in capital
    
    
    35,839
    
    
    
    45,311Retained earnings
    
    
    53,888
    
    
    
    46,905Accumulated other comprehensive income
    
    
    1,353
    
    
    
    5,317Total stockholders equity
    
    
    91,177
    
    
    
    97,634Total liabilities and
stockholders equity
    
    $
    126,114
    
    
    $
    138,624
  2




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DYNAMEX INC.
 
 
 Three months ended
    
    
    Nine months endedApril 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Sales
    
    $
    92,234
    
    
    $
    112,976
    
    
    $
    305,242
    
    
    $
    336,684Cost of sales:Purchased transportation
    
    
    59,450
    
    
    
    74,521
    
    
    
    197,705
    
    
    
    222,038Other direct costs
    
    
    7,934
    
    
    
    8,865
    
    
    
    26,367
    
    
    
    25,518Cost of sales
    
    
    67,384
    
    
    
    83,386
    
    
    
    224,072
    
    
    
    247,556Gross profit
    
    
    24,850
    
    
    
    29,590
    
    
    
    81,170
    
    
    
    89,128Selling, general and administrative expenses:Salaries and employee benefits
    
    
    14,854
    
    
    
    15,591
    
    
    
    47,891
    
    
    
    48,631Other
    
    
    6,480
    
    
    
    7,228
    
    
    
    19,451
    
    
    
    20,744Selling, general and administrative
expenses
    
    
    21,334
    
    
    
    22,819
    
    
    
    67,342
    
    
    
    69,375Depreciation and amortization
    
    
    849
    
    
    
    747
    
    
    
    2,443
    
    
    
    2,119(Gain) loss on disposal of property and
equipment
    
    
    (37
    )
    
    
    1
    
    
    
    (38
    )
    
    
    (15
    )Operating income
    
    
    2,704
    
    
    
    6,023
    
    
    
    11,423
    
    
    
    17,649Interest expense
    
    
    51
    
    
    
    48
    
    
    
    132
    
    
    
    180Other income, net
    
    
    (64
    )
    
    
    (124
    )
    
    
    (373
    )
    
    
    (427
    )Income before income taxes
    
    
    2,717
    
    
    
    6,099
    
    
    
    11,664
    
    
    
    17,896Income tax expense
    
    
    1,082
    
    
    
    2,325
    
    
    
    4,681
    
    
    
    6,709Net income
    
    $
    1,635
    
    
    $
    3,774
    
    
    $
    6,983
    
    
    $
    11,187Basic earnings per common share:
    
    $
    0.17
    
    
    $
    0.37
    
    
    $
    0.71
    
    
    $
    1.10Diluted earnings per common share:
    
    $
    0.17
    
    
    $
    0.37
    
    
    $
    0.71
    
    
    $
    1.09Weighted average shares:Common shares outstanding
    
    
    9,711
    
    
    
    10,243
    
    
    
    9,802
    
    
    
    10,216Adjusted common shares  assuming
exercise of stock options
    
    
    9,723
    
    
    
    10,329
    
    
    
    9,838
    
    
    
    10,308
  3




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DYNAMEX INC.
 
    Nine months endedApril 30,2009
    
    
    2008OPERATING ACTIVITIESNet income
    
    $
    6,983
    
    
    $
    11,187Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    2,443
    
    
    
    2,119Amortization of deferred bank financing fees
    
    
    2
    
    
    
    10Provision for losses on accounts receivable
    
    
    1,242
    
    
    
    608Stock option compensation
    
    
    1,096
    
    
    
    893Deferred income taxes
    
    
    779
    
    
    
    809Non-cash rent expense
    
    
    136
    
    
    
    37Gain on disposal of property and equipment
    
    
    (38
    )
    
    
    (15
    )Changes in current operating assets and liabilities:Accounts receivable
    
    
    2,799
    
    
    
    (5,995
    )Prepaids and other current assets
    
    
    (949
    )
    
    
    (804
    )Accounts payable and accrued liabilities
    
    
    (7,440
    )
    
    
    (2,473
    )Net cash provided by operating activities
    
    
    7,053
    
    
    
    6,376INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (5,114
    )
    
    
    (2,307
    )Acqusition of customer lists
    
    
    
    
    
    
    (491
    )Withdrawal (purchase) of deferred compensation investments
    
    
    664
    
    
    
    (295
    )Net cash used in investing activities
    
    
    (4,450
    )
    
    
    (3,093
    )FINANCING ACTIVITIESProceeds from stock option exercise
    
    
    8
    
    
    
    967Tax benefit realized by exercise of stock options
    
    
    16
    
    
    
    325Purchase and retirement of treasury stock
    
    
    (10,597
    )
    
    
    Other assets and deferred financing fees
    
    
    521
    
    
    
    (127
    )Net cash provided by (used in) financing activities
    
    
    (10,052
    )
    
    
    1,165EFFECT OF EXCHANGE RATES ON CASH
    
    
    (2,017
    )
    
    
    308NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (9,466
    )
    
    
    4,756CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    19,888
    
    
    
    8,857CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    10,422
    
    
    $
    13,613SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid for interest
    
    $
    101
    
    
    $
    119Cash paid for taxes
    
    $
    5,067
    
    
    $
    6,649
  4




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DYNAMEX INC.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 1. Summary of Significant Accounting Polices
 Description of Business
 Basis of presentation 
   Business and credit concentrations 
   Other assets  Recoverable contract contingency costs
 Other long-term liabilities
 5




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DYNAMEX INC.
   2. Comprehensive Income
  Three months ended
    
    
    Nine months endedApril 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    1,635
    
    
    $
    3,774
    
    
    $
    6,983
    
    
    $
    11,187Foreign currency translation gains
(losses)
    
    
    687
    
    
    
    (115
    )
    
    
    (3,845
    )
    
    
    1,246Unrealized gains (losses) on investments
    
    
    13
    
    
    
    8
    
    
    
    (119
    )
    
    
    (6
    )Comprehensive income
    
    $
    2,335
    
    
    $
    3,667
    
    
    $
    3,019
    
    
    $
    12,427
 3. Intangibles  net
  AccumulatedAsset
    
    
    amortization
    
    
    NetDeferred bank financing fees
    
    $
    138
    
    
    $
    (133
    )
    
    $
    5Customer lists
    
    
    505
    
    
    
    (175
    )
    
    
    330Trademarks and other
    
    
    470
    
    
    
    (199
    )
    
    
    271Total
    
    $
    1,113
    
    
    $
    (507
    )
    
    $
    606
 Amortization expense
    
    
    Amortization expenseThree months ended April 30,
    
    
    Nine months ended April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Deferred bank financing fees
    
    $
    2
    
    
    $
    
    
    
    $
    2
    
    
    $
    10Customer lists
    
    
    44
    
    
    
    22
    
    
    
    119
    
    
    
    86Trademarks and other
    
    
    5
    
    
    
    5
    
    
    
    14
    
    
    
    14Total
    
    $
    51
    
    
    $
    27
    
    
    $
    135
    
    
    $
    110
 6




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##### Table of Contents



DYNAMEX INC.
 4. Computation of Earnings Per Share
 Earnings Per Share
 Three months ended
    
    
    Nine months endedApril 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    1,635
    
    
    $
    3,774
    
    
    $
    6,983
    
    
    $
    11,187Weighted average common shares outstanding
    
    
    9,711
    
    
    
    10,243
    
    
    
    9,802
    
    
    
    10,216Common share equivalents related to options
    
    
    12
    
    
    
    86
    
    
    
    36
    
    
    
    92Common shares and common share equivalents
    
    
    9,723
    
    
    
    10,329
    
    
    
    9,838
    
    
    
    10,308Net income per common share:Basic
    
    $
    0.17
    
    
    $
    0.37
    
    
    $
    0.71
    
    
    $
    1.10Diluted
    
    $
    0.17
    
    
    $
    0.37
    
    
    $
    0.71
    
    
    $
    1.09
 5. Repurchase of Equity Securities
  6. Contingencies
   7




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DYNAMEX INC.
       8. Income Taxes
  8




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DYNAMEX INC.
 
 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
        9




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DYNAMEX INC.
 Critical Accounting Policies
  Recent Accounting Pronouncements
      10




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DYNAMEX INC.
 Results of Operations
  Three months ended
    
    
    Nine months endedApril 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales:Purchased transportation
    
    
    64.5
    %
    
    
    66.0
    %
    
    
    64.8
    %
    
    
    65.9
    %Other direct costs
    
    
    8.6
    %
    
    
    7.8
    %
    
    
    8.6
    %
    
    
    7.7
    %Cost of sales
    
    
    73.1
    %
    
    
    73.8
    %
    
    
    73.4
    %
    
    
    73.6
    %Gross profit
    
    
    26.9
    %
    
    
    26.2
    %
    
    
    26.6
    %
    
    
    26.4
    %Selling, general and administrative expenses:Salaries and employee benefits
    
    
    16.1
    %
    
    
    13.8
    %
    
    
    15.7
    %
    
    
    14.3
    %Other
    
    
    7.0
    %
    
    
    6.4
    %
    
    
    6.4
    %
    
    
    6.2
    %Selling, general and administrative expenses
    
    
    23.1
    %
    
    
    20.2
    %
    
    
    22.1
    %
    
    
    20.5
    %Depreciation and amortization
    
    
    0.9
    %
    
    
    0.7
    %
    
    
    0.8
    %
    
    
    0.6
    %(Gain) loss on disposal of property and equipment
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Operating income
    
    
    2.9
    %
    
    
    5.3
    %
    
    
    3.7
    %
    
    
    5.3
    %Interest expense
    
    
    0.1
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.1
    %Other income, net
    
    
    -0.1
    %
    
    
    -0.1
    %
    
    
    -0.1
    %
    
    
    -0.1
    %Income before income taxes
    
    
    2.9
    %
    
    
    5.4
    %
    
    
    3.8
    %
    
    
    5.3
    %Income taxes
    
    
    1.2
    %
    
    
    2.1
    %
    
    
    1.5
    %
    
    
    2.0
    %Net income
    
    
    1.7
    %
    
    
    3.3
    %
    
    
    2.3
    %
    
    
    3.3
    %
 11




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DYNAMEX INC.
  Three months endedApril 30,2009
    
    
    2008Sales by service type:On demand
    
    $
    28,594
    
    
    
    31.0
    %
    
    $
    35,821
    
    
    
    31.7
    %Scheduled/distribution
    
    
    63,640
    
    
    
    69.0
    %
    
    
    77,155
    
    
    
    68.3
    %Total sales
    
    $
    92,234
    
    
    
    100.0
    %
    
    $
    112,976
    
    
    
    100.0
    %Sales by country:United States
    
    $
    60,348
    
    
    
    65.4
    %
    
    $
    69,851
    
    
    
    61.8
    %Canada
    
    
    31,886
    
    
    
    34.6
    %
    
    
    43,125
    
    
    
    38.2
    %Total sales
    
    $
    92,234
    
    
    
    100.0
    %
    
    $
    112,976
    
    
    
    100.0
    %
 Nine months endedApril 30,2009
    
    
    2008Sales by service type:On demand
    
    $
    97,262
    
    
    
    31.9
    %
    
    $
    109,921
    
    
    
    32.6
    %Scheduled/distribution
    
    
    207,980
    
    
    
    68.1
    %
    
    
    226,763
    
    
    
    67.4
    %Total sales
    
    $
    305,242
    
    
    
    100.0
    %
    
    $
    336,684
    
    
    
    100.0
    %Sales by country:United States
    
    $
    195,382
    
    
    
    64.0
    %
    
    $
    207,491
    
    
    
    61.6
    %Canada
    
    
    109,860
    
    
    
    36.0
    %
    
    
    129,193
    
    
    
    38.4
    %Total sales
    
    $
    305,242
    
    
    
    100.0
    %
    
    $
    336,684
    
    
    
    100.0
    %
 Three months ended April 30, 2009 compared to three months ended April 30, 2008
     12




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DYNAMEX INC.
     Nine months ended April 30, 2009 compared to nine months ended April 30, 2008
       13




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DYNAMEX INC.
   Liquidity and Capital Resources
     14




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DYNAMEX INC.
  Level at April 30,Compliance Area
    
    Covenant
    
    2009Ratio of funded debt to EBITDA
    
    Maximum of 2.00 to 1.00
    
    0.29 to 1.00Total indebtedness
    
    $40 million, including LOCs
    
    $6.9 millionLetters of credit sublimit
    
    $10.0 million
    
    $6.9 millionTreasury stock purchases during
the subject period
    
    Ratio of funded debt to EBITDA
maximum of 1.50 to 1.00; based on
pro forma effect of treasury stock
purchases
    
    0.29 to 1.00Fixed charge coverage ratio
    
    Equal to or greater than 1.35 to 1.00
    
    7.17 to 1.00
  Three months ended
    
    
    Nine months endedApril 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    1,635
    
    
    $
    3,774
    
    
    $
    6,983
    
    
    $
    11,187Adjustments:Income tax expense
    
    
    1,082
    
    
    
    2,325
    
    
    
    4,681
    
    
    
    6,709Interest expense
    
    
    51
    
    
    
    48
    
    
    
    132
    
    
    
    180Depreciation and amortization
    
    
    849
    
    
    
    747
    
    
    
    2,443
    
    
    
    2,119EBITDA
    
    $
    3,617
    
    
    $
    6,894
    
    
    $
    14,239
    
    
    $
    20,195EBITDA margin
    
    
    3.9
    %
    
    
    6.1
    %
    
    
    4.7
    %
    
    
    6.0
    %
  Inflation
  15




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DYNAMEX INC.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Exchange Exposure
   Interest Rate Exposure
  16




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DYNAMEX INC.
 
 Item 4. Controls and Procedures
   17




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DYNAMEX INC.
 
 PART II
OTHER INFORMATION
 
 Item 1. Legal Proceedings
      18




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DYNAMEX INC.
   19




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DYNAMEX INC.
 
 Item 1A. Risk Factors.
 In addition to other information in this report, the following risk factors should be considered
carefully in evaluating the Company and its business. This report contains forward-looking
statements, which involve risks and uncertainties. The Companys actual results could differ
materially from those anticipated in these forward-looking statements as a result of certain
factors, including those set forth in the following risk factors and elsewhere in this report.
 The Global Economic Conditions Could Adversely Affect the Companys Business and Financial
Results and have a Material Adverse Affect on our Liquidity and Capital Resources
  Changing Fuel Costs May Adversely Affect Our Financial Condition and Results of Operations
  Competition May Adversely Affect Our Results
  An Increase in Claims May Expose Us to Losses
  20




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DYNAMEX INC.
 We Rely on Independent Contractor Owner-Operator Drivers to Make Deliveries for Our Customers
    We May Be Adversely Affected by Local Delivery Industry and General Economic Conditions
  Fluctuations of Foreign Exchange Rates May Adversely Affect Our Results
  Failure to Maintain Permits and Licensing May Adversely Affect Our Ability to Operate
  We Depend Upon Key Personnel for Our Continued Operations
 21




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DYNAMEX INC.
  Technological Advances May Adversely Affect Our Business
  We Are Highly Dependent Upon Our Technology Infrastructure
  We Are Dependent on Availability of Qualified Delivery Personnel
  We May Need Additional Financing to Pursue Our Acquisition Strategy
  Factors Beyond Our Control May Affect the Volatility of Our Stock Price
  22




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##### Table of Contents



DYNAMEX INC.
 
 Item 6. Exhibits
  31.1
    
    Certification of Chief Executive Officer of the Registrant,
pursuant to 17 CFR 240. 13a  15(e) or 17 CFR 240. 15d  15(e)31.2
    
    Certification of Chief Financial Officer of the Registrant,
pursuant to 17 CFR 240. 13a  15(e) or 17 CFR 240. 15d  15(e)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
 23




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##### Table of Contents



DYNAMEX INC.
 
 SIGNATURES
  DYNAMEX INC.Dated:     June 5, 2009
    
    by
    
    /s/ James L. Welch

James L. Welch
President and Chief Executive Officer
(Principal Executive Officer)Dated:     June 5, 2009
    
    by
    
    /s/ Ray E. SchmitzRay E. SchmitzVice President  Chief Financial Officer
(Principal Financial Officer)Dated:     June 5, 2009
    
    by
    
    /s/ Gilbert JonesGilbert Jones
Corporate Controller
(Principal Accounting Officer)
 24




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##### Table of Contents



EXHIBIT INDEX
 Exhibits
 31.1
    
    Certification of Chief Executive Officer of the Registrant, pursuant to 17 CFR 240. 13a -
15(e) or 17 CFR 240. 15d  15(e)31.2
    
    Certification of Chief Financial Officer of the Registrant, pursuant to 17 CFR 240. 13a -
15(e) or 17 CFR 240. 15d  15(e)32.1
    
    Certification of Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 E - 1