Smithway Reports 95% Increase in Fourth Quarter Earnings

FORT DODGE, Iowa, Feb. 13  /PRNewswire-FirstCall/ -- Smithway Motor Xpress Corp. (NASDAQ:SMXC) announced today financial and operating results for the fourth quarter and year ended December 31, 2005.

For the quarter, net earnings improved 95% to $755,000 compared to $387,000 for the same quarter in 2004.  For the year ended December 31, 2005, net earnings, excluding unusual items, improved 180% to $4.2 million compared to $1.5 million in 2004.

For the fourth quarter of 2005, operating revenue increased approximately 16% to $58.0 million from $50.1 million for the corresponding quarter in 2004. Operating revenue, excluding fuel surcharge revenue of $9.7 million, increased approximately 8% to $48.3 million from $44.8 million, excluding fuel surcharge revenue of $5.3 million, for the corresponding quarter in 2004. For the fourth quarter of 2005, net earnings were $755,000, or $0.15 per basic share and diluted share, compared with net earnings of $387,000, or $0.08 per basic share and diluted share, for the same quarter in 2004.

For the year, operating revenue increased approximately 17% to $220.4 million from $189.0 million in 2004. Operating revenue, excluding fuel surcharge revenue of $29.4 million, increased approximately 9% to $191.0 million from $175.6 million, excluding fuel surcharge revenue of $13.4 million, in 2004. Net earnings were $4.2 million, or $0.86 per basic share and $0.84 per diluted share, compared with net earnings of $2.2 million, or $0.46 per basic and $0.45 per diluted share, in 2004. (Net earnings in 2004 included $727,000, or $0.15 per basic and diluted share, of tax-free life insurance proceeds. Without the life insurance proceeds, net earnings in 2004 would have been $1.5 million, or $0.31 per basic and diluted share.)

G. Larry Owens, President and Chief Executive Officer, commented, "At the onset of 2005 we set our sights on improving our operating ratio from 97.4% to 95.0%. We continue to reduce our operating ratio in spite of increased fuel and labor costs.  Our operating ratio, excluding fuel surcharge revenue, for the quarter was 95.2% compared to 97.2% during the fourth quarter of 2004. Similarly, our operating ratio for the entire year, excluding fuel surcharge revenue, improved to 94.9%, from 97.4% during 2004, meeting our aggressive internal goal.

"Nearly all of our operating statistics show significant improvement for the year, including revenue per mile, truck production, and fleet size. We are one of the few companies providing an environment to increase our independent contractor fleet, which grew nearly 6% over the past year. Freight demand continues to be robust and higher than normal demand for building products and heavy equipment continues today, producing strong demand for our flatbed services.

"Costs, on the other hand, continue to increase. During the quarter, average fuel prices increased 31% to $2.60 per gallon compared to $1.99 per gallon in the fourth quarter of 2004.  Increased fuel surcharge revenue mitigated approximately 87% of this price increase.  During 2005 we increased driver wages twice in response to the market.  We continually monitor expenses and have increased our truck to non-driver employee ratio to 5.01 during the fourth quarter of 2005 from 4.92 during the fourth quarter of 2004.

"We continue to meet our profit improvement goals.  By reducing our operating ratio and modestly increasing revenues we expect continued improvement in net earnings. During the past two years, we have successfully planned for and implemented strategies to turn around the profitability of Smithway.  During this period, we have experienced dramatic improvement as we implemented major changes and as our industry conditions recovered from a very depressed situation. Because we have already reaped the initial substantial benefits of our changes and improving industry conditions, we expect future improvement will occur at a slower rate and, in any event, will depend upon many factors, including freight demand, fuel prices, and driver availability."

Smithway is a truckload carrier that hauls diversified freight nationwide, concentrating primarily on the flatbed segment of the truckload market. Its Class A Common Stock is traded on the Nasdaq SmallCap Market under the symbol "SMXC."

This press release and statements made by the Company in its stockholder reports and public filings, as well as oral public statements by Company representatives, may contain certain forward-looking information, usually identified by words such as "anticipates," "believes," "estimates," "projects," "plans," "expects," or similar expressions.  These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties.  Actual results may differ from those set forth in forward-looking statements.  The following factors, among others, could cause actual results to differ materially from those in forward-looking statements:  failure to sustain the recent return to quarterly and annual operating profitability, which could result in violation of bank covenants and acceleration of indebtedness at several financial institutions; the ability to obtain financing on acceptable terms, and obtain waivers and amendments to current financing in the event of default; economic recessions or downturns in customers' business cycles; excessive increases in capacity within truckload markets; surplus inventories; decreased demand for transportation services offered by the Company; increases or rapid fluctuations in inflation, interest rates, fuel prices, and fuel hedging; the availability and costs of attracting and retaining qualified drivers and owner-operators; increases in insurance premiums and deductible amounts, or changes in excess coverage, relating to accident, cargo, workers' compensation, health, and other claims; the resale value of used equipment and prices of new equipment; seasonal factors such as harsh weather conditions that increase operating costs; regulatory requirements that increase costs and decrease efficiency, including emissions standards and hours-of-service regulations; changes in management; and the ability to negotiate, consummate, and integrate acquisitions.  Readers should review and consider the various disclosures made by the Company in this press release, stockholder reports, and in its Forms 10-K, 10-Q, and other public filings.  The Company disclaims any obligation to update or alter its forward- looking statements whether as a result of new information, future events, or otherwise.

                 SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (Dollars in thousands, except share and per share data and operating
                                 statistics)

                                   Three months ended        Year ended
                                      December 31,          December 31,
                                      (unaudited)           (unaudited)
                                     2004       2005       2004       2005
    Operating revenue:
      Freight                      $49,852    $57,578   $188,190   $218,850
      Other                            212        421        811      1,536
        Operating revenue           50,064     57,999    189,001    220,386
    Operating expenses:
      Purchased transportation      16,254     20,465     61,638     76,403
      Compensation and employee
       benefits                     14,196     14,207     54,468     56,314
      Fuel, supplies, and
       maintenance                  11,075     13,836     38,427     49,957
      Insurance and claims           1,683      1,733      5,636      6,708
      Taxes and licenses               875        814      3,653      3,599
      General and administrative     1,781      2,160      6,929      7,752
      Communications and
       utilities                       312        327      1,274      1,189
      Gain on disposal of assets      (317)      (749)      (470)    (2,245)
      Depreciation and
       amortization                  2,962      2,863     12,810     11,017
        Total operating expenses    48,821     55,656    184,365    210,694
        Earnings from operations     1,243      2,343      4,636      9,692

    Other (expense) income:
      Interest expense                (422)      (558)    (1,563)    (1,826)
      Interest income                   28         26         54        124
      Life Insurance Proceeds            -          -        727          -
        Earnings before income
         taxes                         849      1,811      3,854      7,990
      Income tax expense               462      1,056      1,613      3,749
        Net earnings                  $387       $755     $2,241     $4,241

    Basic earnings per share         $0.08      $0.15      $0.46      $0.86
    Diluted earnings per share       $0.08      $0.15      $0.45      $0.84
    Basic weighted average
     common shares outstanding   4,860,841  4,948,146  4,850,935  4,931,446
    Diluted weighted average
     common shares outstanding   4,986,329  5,057,592  4,951,934  5,047,373


      Operating Statistics

                                      2004       2005       2004       2005

      Operating ratio                97.5%      96.0%      97.5%      95.6%
      Operating ratio, excluding
       fuel surcharges ^             97.2%      95.2%      97.4%      94.9%
      Average operating revenue
       per tractor per week         $3,159     $3,575     $3,065     $3,426
      Average revenue per
       tractor per week *           $2,679     $2,809     $2,712     $2,808
      Average revenue per seated
       tractor per week *           $2,742     $2,893     $2,797     $2,891
      Average length of haul in
       miles                           650        610        658        621
      Average revenue per loaded
       mile *                        $1.50      $1.60      $1.46      $1.56
      Ending company tractors          794        782        794        782
      Ending owner/operators
       tractors                        445        470        445        470
      Ending trailers                2,101      2,047      2,101      2,047
      Weighted average tractors      1,219      1,248      1,186      1,237

    *excludes fuel surcharge, brokerage, and other revenue.
       For the three and twelve months ended December 31, 2004, brokerage
        revenue was $2,097 and $7,769.
       For the three and twelve months ended December 31, 2005, brokerage
        revenue was $2,326 and $8,823.

    ^Total operating expenses, net of fuel surcharge revenue, divided by
     operating revenue excluding fuel surcharge revenue



                SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                           (Dollars in thousands)


                                               December 31,     December 31,
                                                  2004             2005
                                                                (unaudited)
     ASSETS
        Current assets:
            Cash and cash equivalents             $5,054              $168
            Receivables, net                      16,776            19,820
            Inventories                              948               938
            Prepaid expenses and other             4,142             5,705
               Total current assets               26,920            26,631

        Property and equipment                   117,048           121,126
        Less accumulated depreciation             67,772            59,704
            Net property and equipment            49,276            61,422

        Other assets                               2,080             2,058

     Total assets                                $78,276           $90,111

     LIABILITIES AND STOCKHOLDERS'
      EQUITY
        Current liabilities:
            Current debt                          $9,301            $8,363
            Accounts payable and
             accrued expenses                     15,256            17,351
               Total current
                liabilities                       24,557            25,714

        Long-term debt                            20,008            25,185
        Deferred income taxes                     10,702            11,734

     Total liabilities                            55,267            62,633

        Stockholders' equity                      23,009            27,478

     Total liabilities and
      stockholders' equity                       $78,276           $90,111


First Call Analyst: 

FCMN Contact: 

DATASOURCE: Smithway Motor Xpress Corp.



CONTACT:  Douglas C. Sandvig, Senior Vice President,

Treasurer and Chief Financial Officer of Smithway Motor Xpress Corp.,

[phone]



Web site:  http://www.smxinc.com/ 

Copyright