Smithway Reports Record Third Quarter Earnings

FORT DODGE, Iowa, Oct. 24  /PRNewswire-FirstCall/ -- Smithway Motor Xpress Corp. (NASDAQ:SMXC) announced today its financial and operating results for the third quarter and nine months ended September 30, 2006.

For the quarter, net earnings improved 6% to $1.7 million compared to $1.6 million for the same quarter in 2005.  For the first nine months of 2006, net earnings improved 24% to $4.3 million compared to $3.5 million in the 2005 period.

For the third quarter of 2006, operating revenue increased approximately 3% to $59.0 million from $57.3 million for the corresponding quarter in 2005. Operating revenue, excluding fuel surcharge revenue of $10.4 million, decreased approximately 1% to $48.6 million from $49.1 million, excluding fuel surcharge revenue of $8.2 million, for the corresponding quarter in 2005.  For the third quarter of 2006, net earnings were $1.7 million, or $0.35 per basic share and $0.34 per diluted share, compared with net earnings of $1.6 million, or $0.33 per basic share and $0.32 per diluted share, for the same quarter in 2005.

For the first nine months of 2006, operating revenue increased approximately 9% to $177.6 million from $162.4 million for the corresponding period in 2005.  Operating revenue, excluding fuel surcharge revenue of $28.7 million, increased approximately 4% to $148.9 million from $142.7 million, excluding fuel surcharge revenue of $19.7 million, for the corresponding period in 2005.  For the first nine months of 2006, net earnings were $4.3 million, or $0.87 per basic share and $0.85 per diluted share, compared with net earnings of $3.5 million, or $0.71 per basic share and $0.69 per diluted share, for the same period in 2005.

G. Larry Owens, President and Chief Executive Officer, commented, "Our third quarter 2006 earnings marked the highest quarterly earnings in Smithway history.  Our earnings for the first nine months of 2006 were also the highest in history.  These strong results boosted our earnings per share for the trailing four quarters to $1.02.  Our operating ratio, excluding fuel surcharge revenue, for the quarter was 92.7% compared to 93.3% during the third quarter of 2005, a 60 basis point improvement.  For the nine months ended September 30, 2006, our operating ratio improved by 100 basis points.

"We were able to achieve these improved results despite lower freight demand, escalating fuel prices and increased driver pay, which increased our costs and reduced our truck production.  A 5% increase in our rate per loaded mile somewhat offset these negative factors, resulting in a 3.9% decrease in revenue per seated tractor per week, compared to the third quarter 2005.

"During the quarter, average fuel prices increased 14% to $2.81 per gallon compared to $2.46 per gallon in the third quarter of 2005.  Fuel surcharge revenue mitigated 90% of this price increase.  We raised driver wages on April 1, 2006 and may be required to do so again in order to continue to attract and retain qualified drivers.

"We are proud of our record earnings this quarter, which were achieved by our team during a time of moderating freight demand and increasing costs.  We continue our focus on excellence in operations as well as our commitment to disciplined cost controls so that we can positively impact future earnings."

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 Capital 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 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     Nine months ended
                                  September 30,         September 30,
                                   (unaudited)           (unaudited)
                                 2005       2006       2005       2006
  Operating revenue:
     Freight                    $56,867    $58,458   $161,272   $176,106
     Other                          440        541      1,115      1,463
        Operating revenue        57,307     58,999    162,387    177,569
  Operating expenses:
     Purchased transportation    20,423     20,546     55,938     62,780
     Compensation and employee
      benefits                   13,866     13,629     42,107     43,441
     Fuel, supplies, and
      maintenance                13,106     14,276     36,121     41,217
     Insurance and claims         1,309      1,402      4,975      4,320
     Taxes and licenses             880        942      2,785      2,908
     General and administrative   1,826      2,054      5,592      5,946
     Communications and
      utilities                     266        276        862        893
     Gain on disposal of assets    (476)      (839)    (1,496)    (2,151)
     Depreciation and
      amortization                2,810      3,142      8,154      9,017
        Total operating
         expenses                54,010     55,428    155,038    168,371
        Earnings from
         operations               3,297      3,571      7,349      9,198

  Other (expense) income:
     Interest expense              (500)      (629)    (1,268)    (1,669)
     Interest income                 47         67         98        126
        Earnings before income
         taxes                    2,844      3,009      6,179      7,655
     Income tax expense           1,216      1,287      2,693      3,331
        Net earnings             $1,628     $1,722     $3,486     $4,324

  Basic earnings per share        $0.33      $0.35      $0.71      $0.87
  Diluted earnings per share      $0.32      $0.34      $0.69      $0.85
  Basic weighted average
   common shares outstanding  4,936,624  4,988,124  4,925,818  4,979,501
  Diluted weighted average
   common shares outstanding  5,060,194  5,083,302  5,043,778  5,080,523


     Operating Statistics

                                  2005       2006       2005       2006
     Operating ratio (1)          94.2%      93.9%      95.5%      94.8%
     Operating ratio, excluding
      fuel surcharges (2)         93.3%      92.7%      94.8%      93.8%
     Average operating revenue
      per tractor per week       $3,572     $3,571     $3,374     $3,599
     Average revenue per
      tractor per week (3)       $2,884     $2,795     $2,806     $2,852
     Average revenue per seated
      tractor per week (3)       $2,956     $2,842     $2,890     $2,913
     Average length of haul
      in miles                      622        606        625        611
     Average revenue per
      loaded mile (3)             $1.55      $1.63      $1.54      $1.62
     Ending company tractors        769        791        769        791
     Ending owner/operators
      tractors                      478        485        478        485
     Ending trailers              2,170      2,133      2,170      2,133
     Weighted average tractors    1,234      1,271      1,234      1,265

  (1) Operating expenses divided by operating revenue.
  (2) Operating expenses minus fuel surcharge revenue, divided by
      operating revenue excluding fuel surcharge revenue.
  (3) Excludes fuel surcharge, brokerage, and other revenue.  For the
      three months ended September 30, 2005 and 2006, brokerage revenue was
      $1,918 and $2,377.  For the nine months ended September 30, 2005 and
      2006, brokerage revenue was $6,497 and $6,674.



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

                                          December 31,     September 30,
                                              2005              2006
                                                            (unaudited)
  ASSETS
     Current assets:
        Cash and cash equivalents              $168            $1,907
        Receivables, net                     19,820            21,402
        Inventories                             938             1,083
        Prepaid expenses and other            5,705             6,986
             Total current assets            26,631            31,378

     Property and equipment                 121,126           125,310
     Less accumulated depreciation           59,704            54,798
        Net property and equipment           61,422            70,512

     Other assets                             2,058             2,060

  Total assets                              $90,111          $103,950

  LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
        Current debt                         $8,363           $10,116
        Accounts payable and accrued
         expenses                            17,351            19,442
             Total current liabilities       25,714            29,558

     Long-term debt                          25,185            29,066
     Deferred income taxes                   11,734            13,389

  Total liabilities                          62,633            72,013

     Stockholders' equity                    27,478            31,937

  Total liabilities and stockholders'
   equity                                   $90,111          $103,950


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/ 

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