<PAGE> 1
Rule 424(b)(3)
Registration No. 333-15911
PROSPECTUS SUPPLEMENT DATED SEPTEMBER 22, 1997
(to prospectus dated November 14, 1996
and prospectus supplements thereto dated
February 7, 1997, March 11, 1997 and May 21, 1997)
891,125 Shares
DYNAMEX INC.
COMMON STOCK
-----------------
Up to a maximum of 891,125 shares of common stock, $.01 par value (the
"Common Stock") of Dynamex Inc., a Delaware corporation (the "Company" or
"Dynamex"), are being offered from time to time by certain of the Company's
stockholders named herein (the "Selling Stockholders") who have received shares
of Common Stock as full or partial consideration for acquisitions of delivery
businesses consummated by the Company. The Company will not receive any of the
proceeds from the sale of the shares of Common Stock by the Selling
Stockholders.
The Common Stock may be offered by the Selling Stockholders from time
to time in open market transactions (which may include block transactions),
through underwriting syndicates represented by one or more managing
underwriters or in private transactions, or a combination of such methods of
sale, at market prices prevailing at the time of sale, at prices relating to
prevailing market prices or at negotiated prices.
The costs, expenses and fees incurred in connection with the
registration of the Common Stock (excluding any selling commissions and
brokerage fees incurred by the Selling Stockholders) will be paid by the
Company, which has also agreed to indemnify the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act of 1933
(the "Act").
SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THE PROSPECTUS DATED
NOVEMBER 14, 1996 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON STOCK OFFERED HEREBY.
The shares of Common Stock are traded on the Nasdaq National Market
under the symbol "DYMX." The last reported sale price of the Common Stock on
the Nasdaq National Market on September 17, 1997 was $8.125 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------
The date of this Prospectus Supplement is September 22, 1997
<PAGE> 2
THE SECTION OF THE PROSPECTUS DATED NOVEMBER 14, 1996 ENTITLED
"SELLING STOCKHOLDERS" HAS BEEN RESTATED IN ITS ENTIRETY AS FOLLOWS:
SELLING STOCKHOLDERS
The table below sets forth the beneficial ownership of the Company's
Common Stock by the Selling Stockholders prior to the Offering. Each of the
Selling Stockholders acquired these shares pursuant to the acquisition by the
Company of the Acquired Company with which such Selling Stockholder was
affiliated, respectively. The Company is registering the shares of the Selling
Stockholders pursuant to registration rights granted to them under agreements
relating to the acquisition of their shares. Each of the persons named below
has sole voting and investment power with respect to the shares of Common Stock
beneficially owned by him (other than Charles H. McLean and Mary Regina McLean
who own such shares jointly).
<TABLE>
<CAPTION>
Acquired Shares Owned Before Shares Shares Owned After Lock-Up
Name and Company the Offering Being the Offering Expiration
Address Affiliation(1) Number Percent Offered(4) Number Percent(4) Date(5)
-------- -------------- ------ ------- ---------- ------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth H. Bishop(6)............ Zipper 56,922 * 56,922 -- -- N/A
Norman Koppel................... Seko/Metro 66,250 * 66,250 -- -- N/A
Joe Garcia(3)................... Seko/Metro 3,750 * 3,750 -- -- N/A
James Barsano(2)................ Seko/Metro 5,000 * 5,000 -- -- N/A
Edward F. Seidel, Jr.(2)........ Seidel Del. 41,563 * 41,563 -- -- N/A
Barry J. Steingard(3)........... Express It 222,125 3.0 222,125 -- -- N/A
William Castor(3)............... Express It 222,125 3.0 222,125 -- -- N/A
Robert Dobrient(2).............. Max America 33,500 * 33,500 -- -- 3/31/97
Party Pilot, Inc.(3)............ Priority Parcel 21,490 * 21,490 -- -- 6/30/97
Charles H. McLean and
Mary Regina McLean(2)...... One Hour 100,000 1.4 100,000 -- -- 7/31/97
Ransom N. Hundley(2)............ Eagle Courier 83,098 1.1 83,098 -- -- 7/31/97
Frank Vicario(2)................ Eagle Courier 10,032 * 10,032 -- -- 7/31/97
Eddie Hall(2)................... Eagle Courier 2,870 * 2,870 -- -- 7/31/97
Joseph Kazeil................... Regina Mail 8,960 * 8,960 -- -- 4/28/97
605757 Saskatchewan............. Regina Mail 8,960 * 8,960 -- -- 4/28/97
Randal Kazeil(3)................ Regina Mail 4,480 * 4,480 -- -- 4/28/97
------- -------
Total Shares 891,125 891,125
======= =======
</TABLE>
- -------------
* Indicates less than 1%.
(1) Selling Stockholder was a stockholder and, in certain cases, an employee
of the Acquired Company set forth next to his name immediately prior to
the Company's acquisition of such company.
(2) Selling Stockholder is currently engaged by the Company directly or
indirectly in connection with the operation of the business of the
Acquired Company with which he was previously affiliated or in connection
with other Company operations.
(3) Selling Stockholder was employed or engaged by the Company immediately
after the Acquisition but is no longer employed or engaged by the Company.
(4) Because the Selling Stockholders may offer all or some of the shares which
they hold pursuant to this Prospectus and because there are currently no
agreements, arrangements or understandings with respect to the sale of any
shares, the amount of shares that will be held by the Selling Stockholders
after completion of any offering hereunder is unknown. However, for the
purposes of the above table, it is assumed that all of the shares of
Common Stock offered hereby are to be sold.
(5) Selling Stockholder has agreed not to sell any Common Stock or securities
exercisable for or convertible into Common Stock until the date set forth
in this column without the prior written consent of the Company.
(6) Selling Stockholder is currently a director of the Company.
END OF RESTATEMENT OF THE SECTION OF THE PROSPECTUS
DATED NOVEMBER 14, 1996 ENTITLED "SELLING STOCKHOLDERS"
S-2
<PAGE> 3
RECENT DEVELOPMENTS
During the period commencing September 1996 through the beginning of
September 1997, the Company acquired the following same-day delivery businesses
(each an "Acquired Company"):
<TABLE>
<CAPTION>
Effective Date
Acquired Company Metropolitan Areas Served of Acquisition
---------------- ------------------------- --------------
<S> <C> <C>
Express It, Inc. New York, New York October 1, 1996
Dollar Courier San Diego, California October 18, 1996
Winged Foot Couriers, Inc. New York, New York December 1, 1996
Boogey Transportation Limited Saskatoon, Saskatchewan December 1, 1996
One Hour Delivery Services, Inc. Dallas, Texas January 1, 1997
Priority Parcel Express, Inc. Dallas, Texas January 1, 1997
Max America Holdings, Inc. Dallas, Texas January 1, 1997
Eagle Couriers, Inc. Richmond, Virginia February 1, 1997
One Hour Courier Service, Inc. Kansas City, Missouri March 1, 1997
Regina Mail Marketing, Inc. Regina, Saskatchewan April 28, 1997
Road Runner Transportation, Inc. Minneapolis/St. Paul, Minnesota May 16, 1997
Central Delivery Service of Hartford, Connecticut/Boston August 16, 1997
Washington, Inc. (2 branches only) Massachusetts
</TABLE>
The consideration paid by the Company for the Acquired Companies was
determined through arms-length negotiations among the Company and the
representatives of the stockholders of the Acquired Companies. The factors
considered by the parties in determining the purchase price include, among
other things, the historical operating results and the future prospects of the
Acquired Companies.
The Company paid approximately $33.6 million as aggregate
consideration for these Acquired Companies, consisting of $24.3 million in
cash, and 1,090,560 shares of Common Stock. In addition, in certain instances,
additional cash consideration may be paid by the Company if such acquired
businesses obtain certain performance goals. Based on each of the Acquired
Company's most recent annual (or annualized, in certain instances) historical
operating results, and as adjusted for certain pro forma items such as changes
in owners' compensation, these [twelve] acquired businesses have annual
combined revenues of approximately $52.4 million and earnings before interest,
taxes, depreciation and amortization of approximately $6.3 million.
Each of the above referenced acquisitions is being accounted for using
the purchase method of accounting. Accordingly, each Acquired Company is
included in the Company's consolidated results of operations from the date of
its respective acquisition.
The Company is currently integrating the Acquired Companies into the
Company's operating environment. Each Acquired Company has been assigned to the
appropriate regional division of the Company. A manager of each Acquired
Company has continued to manage such operations after the consummation of the
respective acquisition and has been appointed a branch manager. Management is
training the staff of the Acquired Companies so that each branch will be able
to provide and market the full range of Company services. As soon as
practicable and where appropriate, the Company will assimilate each Acquired
Company's accounting, payroll and cash management functions, standardize its
insurance coverage and employee benefits and supplement or replace the use of
the Acquired Company's trade name with "Dynamex."
In August 1997, the Company sold the assets of its logistics division
known as LogisTechs Worldwide ("LTI") to a division of Choice Courier Systems,
Inc. Additionally, in August 1997, the Company amended and restated its secured
revolving credit facility to expand such facility to $75.0 million from $40.0
million and make certain other modifications. See "Management's Discussion and
Analysis of Financial Conditions and Results of Operations".
S-3
<PAGE> 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
information contained in the financial statements, including the notes thereto,
and the other financial information appearing elsewhere in this Prospectus
Supplement and in the Prospectus dated November 14, 1996 and the Prospectus
Supplements thereto dated February 7, 1997, March 11, 1997 and May 21, 1997.
The following discussion specifically relates to the three-month and nine-month
periods ended April 30, 1997. Management's Discussion and Analysis of Financial
Conditions and Results of Operations for the fiscal years ended July 31, 1996,
1995 and 1994 appears in the Prospectus dated November 14, 1996.
A. MATERIAL CHANGES IN FINANCIAL CONDITION
For the nine months ended April 30, 1997 the Company's pro forma
earnings before interest, taxes, depreciation and amortization ("EBITDA") was
approximately $7.5 million as compared to $5.1 million for the same period one
year earlier. This increase reflects the additional cash flow resulting from
the acquisitions made during the past twelve months and the increased sales and
improved profitability from the Company's existing operations.
Net proceeds of the Company's initial public offering the ("IPO")
which was consummated in August 1996, were approximately $21.4 million.
Approximately $8.4 million of this amount was utilized to consummate certain
acquisitions at the time of the IPO and the balance was utilized to reduce
long-term debt.
Subsequent to the IPO, the Company completed twelve acquisitions with
total consideration of approximately $33.6 million, consisting of $24.3 million
in cash and $9.3 million in the form of the Company's common stock (1,090,560
shares). Based on each of these acquired company's most recent annual (or
annualized, in certain instances) historical operating results, and adjusted
for certain pro forma items such as changes in owners' compensation, these
twelve businesses have combined annual revenues of approximately $52.4 million
and EBITDA of approximately $6.3 million.
The cash portion of the Post-IPO Acquisitions has been funded from
internally generated cash and proceeds from the Company's revolving credit
facility.
On August 26, 1997, the Company amended and restated its secured
revolving credit facility. This credit facility consists of a revolving note of
up to $75.0 million with interest payable quarterly at the prime rate or
certain other rate options, as same may be modified based on the Company's
compliance with certain financial rations. The credit facility terminates on
August 31, 2000. As of September 5, 1997, amounts outstanding under the
Company's revolving credit facility were approximately $32.0 million.
The Company anticipates utilizing its cash flow from operations,
proceeds from its revolving credit facility and the issuance of additional
shares of its common stock to complete additional acquisitions in the coming
months. The aggregate size of the acquisitions made subsequent to the IPO and
the pace of these acquisitions has been greater than management originally
anticipated. The Company anticipates that its recently expanded credit
facility, as well as cash flow from operations, will provide adequate capital
to fund its acquisition program for the next 12 to 15 months. However, even
with this expanded credit facility, should the rate and size of future
acquisitions continue consistently with recent activity, the Company may be
forced to seek additional sources of capital. Such sources of additional
capital might include the issuance of debt or equity securities or additional
bank borrowings. There is no assurance that such sources of capital will be
available to the Company or that they will be available on terms acceptable to
the Company. Accordingly, the Company's acquisition and expansion program could
be negatively affected by these factors.
S-4
<PAGE> 5
B. MATERIAL CHANGES IN RESULTS OF OPERATIONS
In December 1995, the Company acquired the ground courier operations
of Mayne Nickless (the "Mayne Nickless Acquisition") which resulted in the
Company gaining operations in San Diego, Los Angeles, San Francisco, Seattle,
Vancouver, Pittsburgh, Boston, Washington, D.C., and Baltimore. In August 1996,
concurrently with the closing of its IPO, the Company completed five
acquisitions (the "IPO Acquisitions") with operations in Winnipeg, Halifax,
Chicago, Columbus, Ohio, and New York. All of these acquisitions have been
accounted for using the purchase method of accounting. Therefore, the results
of operations of the acquired companies are included with those of the Company
as of the date of the acquisition.
The pro forma results of operations present the results of operations
of the Company as if the Mayne Nickless Acquisition and the IPO Acquisitions
had occurred as of the beginning of the period presented and as if the IPO had
occurred as of July 31, 1996.
Subsequent to the IPO and through April 30, 1997, the Company
completed ten additional acquisitions with operations in New York, San Diego,
Saskatoon, Saskatchewan, Regina, Saskatchewan, Dallas and Richmond, Virginia
(the "Post-IPO Acquisitions"). Each of these acquisitions has been accounted
for using the purchase method of accounting. Therefore, the results of
operations of the businesses are included with those of the Company from the
date of acquisition.
The following table sets forth certain items from the Company's
consolidated statements of operations expressed as a percentage of sales:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Nine Months Ended
April 30, April 30, April 30,
-------------------------------------- ------------------------ ------------------------
1996 1996 1997 1996 1997 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
Pro forma Pro forma
<S> <C> <C> <C> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales 68.2 67.4 65.9 70.1 66.6 66.8 66.5
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit 31.8 32.6 34.1 29.9 33.4 33.2 33.5
Selling, general and
administrative expenses 24.6 24.2 24.5 24.8 25.2 26.6 25.2
Depreciation and amortization 2.2 2.0 2.9 2.1 2.8 2.4 2.8
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating profit 5.0 6.4 6.7 3.0 5.4 4.2 5.4
Interest expense 2.8 2.3 1.0 2.2 0.9 2.2 0.8
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before taxes and
extraordinary item 2.3% 4.1% 5.7% 0.8% 4.5% 2.1% 4.6%
========== ========== ========== ========== ========== ========== ==========
</TABLE>
Three months ended April 30, 1996 vs. three months ended April 30, 1997.
Sales increased $13,001,000 (61.5%) during the 1997 period due
primarily to the Mayne Nickless Acquisition which occurred in December 1995,
the IPO Acquisitions and the Post-IPO Acquisitions. Sales from the Post-IPO
Acquisitions were approximately $6,000,000 during the 1997 period.
Cost of sales increased $8,067,000 (55.9%) during the 1997 period,
reflecting the Mayne Nickless, IPO and Post-IPO Acquisitions. As a percentage
of sales, such amounts decreased from 68.2% to 65.9% during the 1997 period.
This change reflects the higher gross profit of the Mayne Nickless, IPO
Acquisition and Post-IPO Acquisition companies. The business of those
operations consisted almost entirely of "on-demand" services. These services
S-5
<PAGE> 6
generally have a higher gross margin than the "scheduled" or "fleet management"
services which comprised a larger portion of the business mix for the
historical operations of the Company.
Selling, general and administrative expenses increased $3,170,000
(61.0%) during the 1997 period due to costs associated with the Mayne Nickless,
IPO Acquisitions and Post-IPO Acquisitions. As a percentage of sales, these
expenses decreased slightly from 24.6% in the 1996 period to 24.5% during the
1997 period. The increase in absolute amounts reflects the higher
administrative costs associated with "on-demand" services, as well as increased
corporate costs associated with the Company's growth and the increased
reporting and other obligations attendant to the Company's status as a public
corporation. The decrease as a percent of sales reflects spreading certain
fixed costs over a larger revenue base. In addition, other costs were
eliminated through the consolidation of administrative and support functions in
certain branches.
Depreciation and amortization increased both in absolute terms, by
$533,000 (114.9%) in the 1997 period, and as a percentage of sales, from 2.2%
in the 1996 period to 2.9% in the 1997 period. These increases result from
depreciation of assets acquired with the acquisitions discussed above,
including intangible assets such as goodwill.
Interest expense decreased $238,000 (40.8%) in the 1997 period due to
the retirement of a portion of outstanding debt in August 1996 with proceeds of
the IPO. Therefore, as percentage of sales, interest expense decreased from
2.8% in the 1996 period to 1.0% in the 1997 period. This decrease was offset to
some extent by additional borrowings related to Post-IPO Acquisitions.
Pro forma three months ended April 30, 1996 to three months ended
April 30, 1997.
Sales increased $7,741,000 (29.3%) in the 1997 period due primarily
to the Post-IPO Acquisitions and increased sales to regional and national
accounts in Canada.
Cost of sales increased $4,704,000 (26.4%) in the 1997 period due
primarily to the above increase in sales. As a percentage of sales, cost of
sales decreased from 67.4% in the 1996 period to 65.9% in the 1997 period. This
decrease results primarily from the effect of a high proportion of higher gross
margin "on-demand" business during the 1997 period due to the Post-IPO
Acquisitions.
Selling, general and administrative expenses increased $1,985,000
(31.1%) in the 1997 period, due to costs associated with increased sales,
including those from the Post-IPO Acquisitions, and increased costs in the 1997
quarter related to the Company's public company status. As a percentage of
sales, such costs increased from 24.2% in the 1996 period to 24.5% in the 1997
period.
Depreciation and amortization increased $460,000 (85.7%) in the 1997
period, due to the effect of amortization of costs related to the Post-IPO
Acquisitions. As a percentage of sales, depreciation and amortization increased
from 2.0% in the 1996 period to 2.9% in the 1997 period.
Interest expense decreased in absolute terms by $262,000 (43.2%) in
the 1997 period and as a percentage of sales, from 2.3% in the 1996 period to
1.0% in the 1997 period. This decrease results from the reduction of
outstanding debt with a portion of the proceeds of the IPO and from lower
interest rates associated with the Company's amended bank credit facility. The
decrease was offset by some extent by the effect of increased borrowings
related to the Post-IPO Acquisitions.
Nine months ended April 30, 1996 vs. nine months ended April 30, 1997.
Sales increased $40,986,000 (81.9%) in the 1997 period due primarily
to the Mayne Nickless, IPO and Post-IPO Acquisitions. Sales from the Post-IPO
Acquisitions were approximately $8,780,000 during the 1997 period.
Cost of sales increased $25,521,000 (72.8%) in the 1997 period,
reflecting the Mayne Nickless, IPO and Post-IPO Acquisitions. As a percentage
of sales, such amounts decreased from 70.1% in the 1996 period to 66.6% in the
1997 period. This change reflects the higher gross profit of the Mayne
Nickless, IPO Acquisition and Post-IPO Acquisition companies. The business of
those operations consisted almost entirely of "on-demand" services. These
S-6
<PAGE> 7
services generally have a higher gross margin than the "scheduled" or "fleet
management" services which comprised a larger portion of the business mix for
the historical operations of the Company.
Selling, general and administrative expenses increased $10,540,000
(85.1%) in the 1997 period due to costs associated with the Mayne Nickless, IPO
Acquisitions and Post-IPO Acquisitions. As a percentage of sales, these
expenses increased from 24.8% in the 1996 period to 25.2% in the 1997 period.
This reflects the higher administrative costs associated with "on-demand"
services, as well as increased corporate costs associated with the Company's
growth and status as a public corporation. This increase was offset by the
elimination of certain administrative costs associated with revenue from
certain unprofitable business in Western Canada and Arizona which was
discontinued. In addition, other costs were eliminated through the
consolidation of administrative and support functions in certain branches.
Depreciation and amortization increased both in absolute terms,
$1,448,000 (135.8%) in the 1997 period, and as a percentage of sales, from 2.1%
in the 1996 period to 2.8% in the 1997 period. These increases result from
depreciation of assets acquired with the acquisitions discussed above,
including intangible assets such as goodwill.
Interest expense decreased $226,000 (20.9%) in the 1997 period, due to
the retirement of a portion of outstanding debt in August 1996 with proceeds of
the IPO. Therefore, as percentage of sales, interest expense decreased from
2.2% in the 1996 period to 0.9% in the 1997 period. This decrease was offset to
some extent by additional borrowings related to Post-IPO Acquisitions.
Results of operations for the nine months ended April 30, 1997 include
an extraordinary charge of $335,000, net of income taxes, resulting from the
early retirement of the Company's Junior Subordinated Debentures concurrently
with the IPO.
Pro forma nine months ended April 30, 1996 vs. pro forma nine months ended
April 30, 1997.
Sales increased $14,513,000 (18.8%) in the 1997 period due primarily
to the Post-IPO Acquisitions and increased sales to regional and national
accounts in Canada. The increase from these additional sales was affected by a
decline in revenues of approximately $1,600,000 in Western Canada and Arizona
due to the discontinuation of certain unprofitable business in these areas. The
increase in sales in the 1997 period was in spite of generally lower levels of
business activity in late December and early January due to the Christmas and
New Year's holidays falling in the middle of a week.
Cost of sales increased $9,436,000 (18.3%) in the 1997 period due
primarily to the above increase in sales. As a percentage of sales, cost of
sales decreased slightly from 66.8% in the 1996 period to 66.5%in the 1997
period. This minor change results from the change in product mix between
relative high gross margin "on-demand" services and the relative lower gross
margin "scheduled" and "fleet management" services.
Selling, general and administrative expenses increased $2,647,000
(12.9%) in the 1997 period, due to costs associated with increased sales,
including sales from the Post-IPO Acquisitions, and increased costs in the 1997
quarter related to the Company's public company status. The increase was offset
by the elimination of certain administrative costs associated with revenue from
certain unprofitable business in Western Canada and Arizona which was
discontinued as well as the elimination of other costs through the
consolidation of administrative and support services in certain branches. As a
percentage of sales, however, such costs decreased from 26.6% in the 1996
period to 25.2% in the 1997 period. The decrease as a percentage of sales
reflects spreading certain fixed costs over a larger revenue base.
Depreciation and amortization increased $693,000 (37.7%) in the 1997
period due to the effect of amortization of costs related to the Post-IPO
Acquisitions. As a percentage of sales, depreciation and amortization increased
from 2.4% in the 1996 period to 2.8% in the 1997 period.
Interest expense decreased in absolute terms by $903,000 (54.0%) in
the 1997 period and as a percentage of sales, from 2.2% in the 1996 period to
0.8% in the 1997 period. This decrease results from the reduction of
outstanding debt with a portion of the proceeds of the IPO and from lower
interest rates associated with the Company's amended bank credit facility. The
decrease was offset to some extent by the effect of increased borrowings
related to the Post-IPO Acquisitions.
S-7
<PAGE> 8
INDEX TO FINANCIAL STATEMENTS
DYNAMEX INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets, July 31, 1996 and
April 30, 1997 (Unaudited)........................................ SF-2
Condensed Consolidated Statements of Operations (Unaudited)
for the three-month and nine month periods ended
April 30, 1996 and 1997 and Pro Forma............................. SF-3
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the nine-month periods ended April 30, 1996
and 1997 and Pro Forma............................................ SF-4
Notes to the Consolidated Financial Statements..................... SF-5
SF-1
<PAGE> 9
DYNAMEX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
July 31, April 30,
1996 1997
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 894 $ 1,192
Accounts receivable - net 11,141 18,405
Prepaid and other current assets 856 2,683
-------- --------
12,891 22,280
PROPERTY AND EQUIPMENT - net 2,047 4,673
INTANGIBLES - net 18,196 39,249
DEFERRED OFFERING EXPENSES 763 --
OTHER ASSETS 1,102 1,806
-------- --------
$ 34,999 $ 68,008
======== ========
LIABILITIES
CURRENT
Accounts payable $ 1,088 $ 938
Accrued liabilities 5,446 9,503
Current portion of long-term debt 2,271 523
-------- --------
8,805 10,964
LONG-TERM DEBT 20,036 20,301
-------- --------
28,841 31,265
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock; 10,000,000 shares authorized;
none outstanding -- --
Common stock 50,000,000 shares authorized;
2,543,460 and 6,987,505 shares outstanding 25 70
Stock warrants 624 --
Additional paid-in capital 8,756 38,169
Accumulated deficit (3,262) (1,151)
Unrealized foreign currency translation adjustment 15 (345)
-------- --------
6,158 36,743
-------- --------
$ 34,999 $ 68,008
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
SF-2
<PAGE> 10
DYNAMEX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Nine Months Ended
April 30, April 30, April 30,
------------------------------ ------------------- -------------------
1996 1996 1997 1996 1997 1996 1997
-------- -------- -------- -------- -------- -------- --------
Pro forma Pro forma
<S> <C> <C> <C> <C> <C> <C> <C>
SALES $ 21,154 $ 26,414 $ 34,155 $ 50,015 $ 91,001 $ 77,243 $ 91,756
COST OF SALES 14,434 17,797 22,501 35,079 60,600 51,624 61,060
-------- -------- -------- -------- -------- -------- --------
GROSS PROFIT 6,720 8,617 11,654 14,936 30,401 25,619 30,696
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 5,195 6,380 8,365 12,390 22,930 20,519 23,166
DEPRECIATION AND AMORTIZATION 464 537 997 1,066 2,514 1,838 2,531
-------- -------- -------- -------- -------- -------- --------
OPERATING INCOME 1,061 1,700 2,292 1,480 4,957 3,262 4,999
INTEREST EXPENSE 583 607 345 1,079 853 1,673 770
-------- -------- -------- -------- -------- -------- --------
INCOME BEFORE TAXES 478 1,093 1,947 401 4,104 1,589 4,229
INCOME TAXES 3 481 779 11 1,639 699 1,689
-------- -------- -------- -------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 475 612 1,168 390 2,465 890 2,540
EXTRAORDINARY ITEM - Loss on repayment
of Junior subordinated Debentures
(less applicable
income taxes of $223) -- -- -- -- (335) -- --
-------- -------- -------- -------- -------- -------- --------
NET INCOME $ 475 $ 612 $ 1,168 $ 390 $ 2,130 $ 890 $ 2,540
======== ======== ======== ======== ======== ======== ========
NET INCOME PER COMMON SHARE
Income before extraordinary item $ 0.13 $ 0.14 $ 0.17 $ 0.11 $ 0.37 $ 0.20 $ 0.37
Extraordinary item -- -- -- -- (0.05) -- --
-------- -------- -------- -------- -------- -------- --------
Net income per common share $ 0.13 $ 0.14 $ 0.17 $ 0.11 $ 0.32 $ 0.20 $ 0.37
======== ======== ======== ======== ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 3,732 4,493 7,070 3,732 6,649 4,493 6,860
======== ======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes to the consolidated financial statements
SF-3
<PAGE> 11
DYNAMEX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
April 30, April 30,
------------------------ ------------------------
1996 1997 1996 1997
---------- ---------- ---------- ----------
Pro forma
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 390 $ 2,130 $ 890 $ 2,540
Adjustment to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 1,066 2,515 1,838 2,531
Loss on disposition stock warrant -- 558 -- --
Unrealized foreign currency adjustment (6) (360) (6) (360)
Changes in current assets
and current liabilities:
Accounts receivable (474) (2,999) (945) (2,999)
Prepaids and other assets (89) (951) 36 (951)
Accounts payable and accrued expenses 951 1,744 14 1,692
---------- ---------- ---------- ----------
Net cash provided by operating activities 1,838 2,637 1,827 2,453
---------- ---------- ---------- ----------
INVESTING ACTIVITIES
Payment for acquisitions (12,267) (16,544) -- (9,695)
Purchase of property and equipment (457) (1,377) (634) (1,305)
---------- ---------- ---------- ----------
Net cash used by financing activities (12,724) (17,921) (634) (11,000)
---------- ---------- ---------- ----------
FINANCING ACTIVITIES
Principal payment on long-term debt (3,414) (5,498) 484 8,900
Net borrowing under line of credit (2,686) 678 63 678
Proceeds from long-term debt 17,876 --
Proceeds from issuance of stock warrants 624 --
Net proceeds from sale of common stock -- 21,148
Other assets, deferred offering expenses and intangibles (1,504) (746) (1,692) (882)
---------- ---------- ---------- ----------
Net cash provided (used) by financing activities 10,896 15,582 (1,145) (8,696)
---------- ---------- ---------- ----------
NET INCREASE IN CASH 10 298 48 149
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 506 894 2,354 1,043
---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 516 $ 1,192 $ 2,402 $ 1,192
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURE ON NON-CASH
INFORMATION
Cash paid for interest $ 403 $ 898
========== ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Capital lease obligations $ 43 $ 467 $ 43 $ 467
========== ========== ========== ==========
Inconjunction with the acquisition described,
liabilities were assumed as follows:
Fair value of assets acquired $ 14,325 $ 21,771 $ 12,569
Cash paid (12,267) (16,544) (9,695)
---------- ---------- ----------
Liabilities assumed and incurred $ 2,058 $ 5,227 2,874
========== ========== ==========
</TABLE>
SF-4
<PAGE> 12
DYNAMEX INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated interim financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and thus do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
The accompanying Unaudited Pro Forma Condensed Consolidated Statements
of Operations present the comparative results of operations for the nine months
ended April 30, 1997 as if the Company's initial public offering ("IPO") and
five acquisitions closed concurrently with the IPO ("IPO Acquisitions") had
occurred as of the beginning of that period. Consequently, the results of
operations for this period include the issuance of 173,485 shares of common
stock as partial consideration for the IPO Acquisitions and the issuance of
2,990,000 shares of common stock pursuant to the IPO. The accompanying
Unaudited Pro Forma Condensed Statement of Operations presents the comparative
results of operations for the nine and three month periods ended April 30, 1997
as if the acquisition of the on-demand, ground courier operations of Mayne
Nickless and the IPO Acquisitions had occurred as of the beginning of that
period. Consequently, the results of operations for these periods include the
issuance of 173,485 shares of common stock and the issuance of 1,134,000 shares
of common stock pursuant to the IPO, the proceeds from such shares being used
to finance the cash portion of the IPO Acquisitions. In addition, the Pro Forma
results of operations have been adjusted to reflect the effect of changes to
certain components of costs and expenses. These items include adjustments to
compensation to owners and managers of the IPO Acquired Companies to reflect
agreed upon compensation levels subsequent to the acquisition by the Company,
adjustments to rental expense to reflect agreed upon modifications to lease
agreements to be effective subsequent to the acquisition by the Company and
adjustments to certain corporate overhead, other costs and expenses which are
not ongoing costs of the businesses acquired and would not have been incurred
had the acquisitions by the Company occurred at the beginning of the period.
Each of the above mentioned acquisitions has been accounted for under the
purchase method of accounting. Accordingly, the total purchase price, including
transaction costs, has been allocated to the assets and liabilities of the
acquired businesses based on their estimated fair value.
The unaudited Pro Forma Condensed Consolidated Statements of Cash
Flows give additional effect to the issuance of the balance of shares of common
stock issued in connection with the IPO, the application of the proceeds
thereof and the mandatory exercise of the bridge warrants simultaneously
therewith.
The pro forma results are not necessarily indicative of actual results
which might have occurred had the operations of the Company and the acquired
businesses been combined at the beginning of the periods presented.
The Condensed Consolidated Balance Sheet at July 31, 1996 has been
derived from the Company's Form 10-K for the year ended July 31, 1996. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
SF-5
<PAGE> 13
DYNAMEX INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
2. CAPITAL STOCK
In August 1996, the Company completed the IPO. Pursuant to the IPO the
Company issued 2,600,000 shares of its $.01 par value common stock at the
offering price of $8.00 per share, less underwriters' discount and offering
costs. In September 1996, the Underwriters exercised their over-allotment
option pursuant to which the Company issued an additional 390,000 shares of
common stock, also at the offering price of $8.00 per share, less underwriters'
discount.
Concurrently with the closing of the IPO, the Company issued options
to purchase 257,000 shares of common stock pursuant to the 1996 Stock Option
Plan. All of the options are exercisable at $8.00 per share, the initial public
offering price.
3. BUSINESS COMBINATIONS
In October 1996, the Company acquired the same-day delivery business
of Express-It (New York, New York) for 444,250 shares of Common Stock and
acquired substantially all of the assets of Dollar Courier (San Diego,
California) for total consideration of approximately of approximately $330,000,
payable over approximately two years. In December 1996, the Company acquired
Boogey Transportation Ltd. (Saskatoon, Saskatchewan) for approximately $471,000
in cash and 22,920 shares of common stock and certain of the assets of Winged
Foot Couriers, Inc. (New York, New York) for approximately $675,000 in cash. In
January 1997, the Company acquired Max America Holdings, Inc. and the assets of
One Hour Delivery Service, Inc. and Priority Parcel Express, Inc., all of which
operate in Dallas, Texas, for total consideration of approximately $8,700,000,
including 154,990 shares of common stock. In February 1997, the Company
acquired Eagle Couriers, Inc. of Richmond, Virginia for approximately
$1,075,000 in cash and 96,000 shares of common stock. In April 1997, the
Company acquired Regina Mail Marketing, Inc., which operates in Regina
Saskatchewan, for $1,200,000 in cash and 22,400 shares of common stock. In May
1997, the Company acquired Road Runner Transportation Inc., which has
operations in Minneapolis-St. Paul, Denver, Dallas, Austin and San Antonio, for
$11,200,000 in cash and 350,000 shares of common stock. In August 1997, the
Company acquired the Boston, Massachusetts and Hartford, Connecticut operations
of Central Delivery of Washington, Inc. for approximately $500,000 in cash.
SF-6
<PAGE> 14
======================================================
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING STOCKHOLDER
OR BY ANY OTHER PERSON. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO
BUY COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE OF THIS PROSPECTUS
SUPPLEMENT.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Selling Stockholders.................. S-2
Recent Developments................... S-3
Management's Discussion and Analysis
of Financial Conditions............. S-4
Index to Financial Statements......... SF-1
PROSPECTUS
Prospectus Summary.................... 3
Risk Factors.......................... 6
The Company........................... 10
Use of Proceeds....................... 10
Dividend Policy....................... 10
Selected Consolidated Financial
Data................................ 11
Pro Forma Financial Information....... 12
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 17
Business.............................. 22
Management............................ 31
Certain Transactions.................. 36
Principal Stockholders................ 38
Description of Capital Stock.......... 39
Shares Eligible For Future Sale....... 42
Selling Stockholders.................. 44
Plan of Distribution.................. 45
Legal Matters......................... 45
Experts............................... 45
Additional Information................ 46
Index to Financial Statements......... F-1
</TABLE>
======================================================
======================================================
891,125 SHARES
[DYNAMEX LOGO]
COMMON STOCK
------------------------------
PROSPECTUS SUPPLEMENT
SEPTEMBER 22, 1997
------------------------------
======================================================
