SMITHWAY MOTOR XPRESS CORP, S-1/A, 1996-06-27

SMITHWAY MOTOR XPRESS CORP
S-1/A, 1996-06-27
TRUCKING (NO LOCAL)

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1996

REGISTRATION NO. 33-90356
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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SMITHWAY MOTOR XPRESS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

NEVADA 4213 42-1433844
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NUMBER)
INCORPORATION OR CODE NUMBER)
ORGANIZATION)

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RURAL ROUTE #5
FORT DODGE, IOWA 50501
(515) 576-7418
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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WILLIAM G. SMITH
CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER
SMITHWAY MOTOR XPRESS CORP.
RURAL ROUTE #5
FORT DODGE, IOWA 50501
(515) 576-7418
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPIES TO:

MARK A. SCUDDER, ESQ. ELIZABETH GRIEB, ESQ.
EARL H. SCUDDER, JR., ESQ. PIPER & MARBURY L.L.P.
SCUDDER LAW FIRM, P.C. 36 SOUTH CHARLES STREET
411 SOUTH 13TH STREET, SUITE 200 BALTIMORE, MARYLAND 21201
LINCOLN, NEBRASKA 68508 (410) 539-2530
(402) 435-3223

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>

SMITHWAY MOTOR XPRESS CORP.

CROSS REFERENCE SHEET

PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
FORM S-1 ITEM NUMBER AND CAPTION LOCATION OR CAPTION IN PROSPECTUS
-------------------------------- ---------------------------------
<S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus. Facing Page of Registration Statement;
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus.................... Inside Front Cover Page of Prospectus
3. Summary Information, Risk Factors, and
Ratio of Earnings to Fixed Charges..... Prospectus Summary; Risk Factors
4. Use of Proceeds........................ Prospectus Summary; Use of Proceeds
Outside Front Cover Page of Prospectus;
5. Determination of Offering Price........ Underwriting
6. Dilution............................... Risk Factors; Dilution
7. Selling Security Holders............... Principal and Selling Stockholders
8. Plan of Distribution................... Underwriting
9. Description of Securities to be Description of Capital Stock; Shares Eligible
Registered............................. for Future Sale
10. Interests of Named Experts and Counsel. *
11. Information with Respect to the
Registrant
Prospectus Summary; Industry Overview;
(a)Item 101 of Regulation S-K.......... Business
(b)Item 102 of Regulation S-K.......... Business--Operations
(c)Item 103 of Regulation S-K.......... Business--Legal Proceedings
(d)Item 201 of Regulation S-K.......... Dividend Policy; Underwriting; Description of
Capital Stock
(e)Financial Statements................ Consolidated Financial Statements of Smithway
Motor Xpress Corp.
Selected Consolidated Financial and Operating
(f)Item 301 of Regulation S-K.......... Data
(g)Item 302 of Regulation S-K.......... *
(h)Item 303 of Regulation S-K.......... Management's Discussion and Analysis of
Financial
Condition and Results of Operations
(i)Item 304 of Regulation S-K.......... Experts
(j)Item 401 of Regulation S-K.......... Management
(k)Item 402 of Regulation S-K.......... Management
(l)Item 403 of Regulation S-K.......... Principal and Selling Stockholders; Certain
Transactions
(m)Item 404 of Regulation S-K.......... Certain Transactions
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................ *
</TABLE>
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*Omitted because answer is negative or item is not applicable.
<PAGE>

2,150,000 SHARES
SMITHWAY MOTOR XPRESS

CLASS A COMMON STOCK

Of the 2,150,000 shares of Class A Common Stock offered hereby, 1,500,000
shares are being sold by the Company and 650,000 shares are being sold by
certain stockholders (the "Selling Stockholders"). See "Principal and Selling
Stockholders." The Company will not receive any proceeds from the sale of
Class A Common Stock by the Selling Stockholders. Prior to this offering,
there has been no public market for the Class A Common Stock of the Company.
See "Underwriting" for a discussion of the factors considered in determining
the initial public offering price. The Class A Common Stock has been approved
for quotation on the Nasdaq National Market under the symbol "SMXC."

The Company's authorized capital stock includes Class A Common Stock, Class
B Common Stock (together with the Class A Common Stock, the "Common Stock"),
and Preferred Stock. The Class A Common Stock is substantially identical to
the Class B Common Stock, except with respect to voting rights. The Class A
Common Stock is entitled to one vote per share, and the Class B Common Stock
is entitled to two votes per share so long as it is beneficially owned by
William G. Smith or certain members of his immediate family. See "Risk
Factors--Voting Control of the Company" and "Description of Capital Stock."

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SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
UNDERWRITING
PRICE DISCOUNTS AND PROCEEDS TO PROCEEDS TO SELLING
TO PUBLIC COMMISSIONS (1) COMPANY (2) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share........................ $8.50 $0.595 $7.905 $7.905
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Total (3)........................ $18,275,000 $1,279,250 $11,857,500 $5,138,250
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</TABLE>
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(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities arising
under the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."
(2) Before deducting expenses estimated at $1,000,000 payable by the Company.

(3) The Company and a Selling Stockholder have granted the Underwriters an
option, exercisable within 30 days after the date hereof, to purchase up
to an additional 322,500 shares of Class A Common Stock (200,000 shares
from the Company and 122,500 from such Selling Stockholder) at the Price
to Public less Underwriting Discounts and Commissions, solely to cover
over-allotments, if any. If all such shares are purchased, the total Price
to Public, Underwriting Discounts and Commissions, Proceeds to Company,
and Proceeds to Selling Stockholders will be $21,016,250, $1,471,137,
$13,438,500, and $6,106,613, respectively. See "Underwriting."

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The Class A Common Stock is offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by the Underwriters,
subject to their right to withdraw, cancel, modify, or reject orders in whole
or in part, and subject to certain other conditions. It is expected that
delivery of the shares of Class A Common Stock will be made on or about July
2, 1996.

MORGAN KEEGAN & COMPANY, INC.

A.G. EDWARDS & SONS, INC.

GEORGE K. BAUM & COMPANY

The date of this Prospectus is June 27, 1996.
LOGO
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[PHOTO]

The Company intends to furnish its stockholders with annual reports containing
audited financial statements.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements, including the Notes
thereto, appearing elsewhere in this Prospectus. Unless otherwise indicated,
(i) all information in this Prospectus assumes that the Underwriters' over-
allotment option is not exercised; (ii) all references to the "Company" or
"Smithway" in this Prospectus refer to Smithway Motor Xpress Corp., a Nevada
corporation ("Smithway-Nevada"), its wholly owned subsidiaries, Smithway Motor
Xpress, Inc., an Iowa corporation ("Smithway-Iowa"), Smithway Transportation
Brokerage, Inc., an Iowa corporation ("STB"), and Wilmar Truck Leasing, Inc.,
an Iowa corporation ("Wilmar"); and (iii) all financial information in this
Prospectus concerning the Company includes the historical operations of
Smithway, STB, Wilmar, and "Smith Leasing," a sole proprietorship lessor of
tractors and trailers to Smithway, all of which entities were formerly owned by
William G. Smith and Marlys L. Smith (the "Smiths") and are now owned by
Smithway. See "Acquisition of Related Companies and Holding Company Formation"
and Note 1 to Consolidated Financial Statements.

THE COMPANY

Smithway is a truckload carrier that transports diversified manufactured and
processed products, concentrating primarily on the flatbed segment of the
truckload market. The Company uses its "Smithway Network" of computer-connected
field offices, commission agencies, and Company-owned terminals to offer
comprehensive truckload transportation services to shippers located
predominantly between the Rocky Mountains in the West and the Appalachian
Mountains in the East, and in eight Canadian provinces. Since 1991, Smithway
has: (i) diversified its customer base and freight transported to expand its
business beyond the building materials and construction steel relied upon by
many flatbed carriers; (ii) implemented proven technology to optimize freight
selection, communication, and operating efficiencies; (iii) established its van
division in response to customer demand; and (iv) added brokerage,
transportation logistics, and dedicated fleet operations. Management believes
the Company's transportation capability and reputation for safety and
reliability have made it a primary provider of transportation services, or
"core carrier," to major customers such as York International, Goodyear, LTV
Steel, and General Electric.

Smithway's objective is to accelerate the expansion of its operations to take
advantage of growth opportunities resulting from the industry trend of shippers
utilizing larger, better-capitalized carriers, while maintaining profitability
and premium service standards. Since 1991, the Company has positioned itself
for growth by focusing upon productivity enhancements, cost reductions, and
operating efficiencies. This focus has resulted in 30.0% compounded annual
growth in earnings from operations, 67.5% compounded annual growth in net
earnings, and 68.2% compounded annual growth in net earnings per share for the
five years ended December 31, 1995 (pro forma net earnings, which reflect a
provision for C corporation income taxes for consolidated entities which were S
corporations and a sole proprietorship in 1991-94, are reflected in this
calculation for such periods).

The Smithway strategy contains six key elements:

. Market Leadership. Smithway strives for market prominence by offering
premium service, developing core carrier and dedicated fleet
relationships, and providing logistics management.

. Diversified Freight. Smithway targets a diversified mix of freight to
increase profitability and reduce exposure to business cycles.

. Acquisitions. Smithway intends to pursue strategic acquisitions of both
flatbed and dry van carriers, focusing primarily on the flatbed sector of
the industry.

. Return on Equity. Smithway emphasizes return on equity by enhancing asset
productivity and limiting capital investment through use of independent
contractor equipment and sales agent facilities.

. Productivity Incentives. Smithway seeks to create an entrepreneurial
environment for its personnel through revenue-based bonuses, profit
participation, and stock ownership by a majority of employees.

. Operating Efficiencies. Smithway enhances operating efficiency through
safety incentives, freight selection software, satellite-based tracking
and communication, and late-model revenue equipment.

3
<PAGE>

Smithway intends to continue its policy of maintaining a mixed fleet of both
Company-owned and independent contractor tractors. Smithway increased its fleet
to 720 tractors (403 Company-owned and 317 independent contractors) and 1,175
trailers (957 flatbed and 218 dry vans) at March 31, 1996. Management believes
that the Company operates one of the nation's ten largest flatbed fleets. The
Company has scheduled new equipment deliveries (net of sales and trades) that
would increase Company-owned tractors to 426 by December 31, 1996. Following
this offering, management believes the Company will be prepared to expand its
operations and capitalize on opportunities created by truckload industry
consolidation.

The Company, formerly known as Acme Transfer, Inc., an Iowa corporation, was
acquired by William G. Smith and his father, Harold C. Smith in 1958. In 1972,
the name was changed to Smithway Motor Xpress, Inc. Smithway Motor Xpress Corp.
was incorporated in Nevada in January 1995 to serve as a holding company for
Smithway-Iowa and related entities. Smithway's headquarters is located at Rural
Route #5, Fort Dodge, Iowa 50501, and its telephone number is (515) 576-7418.

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock offered by the Company......... 1,500,000 shares
Class A Common Stock offered by the Selling
Stockholders....................................... 650,000 shares
Common Stock to be outstanding after this offering:
Class A Common Stock............................ 3,999,293 shares(1)
Class B Common Stock............................ 1,000,000 shares
Total....................................... 4,999,293 shares(1)(2)
Use of proceeds..................................... To reduce debt.
See "Use of Proceeds."
Nasdaq National Market Symbol....................... SMXC
</TABLE>
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(1) Excludes 225,000 shares of Class A Common Stock reserved for issuance to
key employees under the Company's Incentive Stock Plan (under which options
for 85,000 shares have been awarded) and 25,000 shares of Class A Common
Stock reserved for issuance to non-employee directors under the Company's
Outside Director Stock Plan.
(2) The Class A Common Stock is entitled to one vote per share. The Class B
Common Stock, which automatically converts to Class A Common Stock if
beneficially owned by persons other than William G. Smith or certain
members of his immediate family, is entitled to two votes per share. The
Class A and Class B Common Stock vote together as a single class except as
required by law, and are substantially identical, except with respect to
voting rights. See "Description of Capital Stock."

RISK FACTORS

A number of factors should be considered by potential investors before
purchasing shares of the Company's Class A Common Stock. See "Risk Factors."

4
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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT SHARE AMOUNTS AND OPERATING DATA)

<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------
AS
ACTUAL ADJUSTED(6)
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<S> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital (deficit)................................. $ (416) $ 3,055
Net property and equipment................................ 33,856 33,856
Total assets.............................................. 45,974 45,480
Long-term debt, including current maturities and ESOP-
related debt............................................. 26,555 16,425
Total non-redeemable common stockholders' equity.......... 8,164 20,850
</TABLE>
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(1) Adjusted to reflect a provision for pro forma income taxes for certain
related entities acquired by Smithway, the earnings of which were not
subject to corporate income taxes. Such transactions were accounted for in
a manner similar to a pooling of interests. See "Acquisition of Related
Companies and Holding Company Formation" and Notes 1 and 14 to Consolidated
Financial Statements.
(2) Adjusted to reflect the issuance of 3,513,697 shares of Common Stock by the
Company in the formation of the holding company and acquisition of related
entities referred to in Note (1) above. See "Acquisition of Related
Companies and Holding Company Formation" and Note 1 to Consolidated
Financial Statements.
(3) Excludes brokerage activities except as to operating ratio.
(4) Operating expenses as a percentage of operating revenue. The Company
finances some of its revenue equipment under operating leases rather than
through debt financing or capitalized leases and utilizes independent
contractors whose compensation includes the implied cost of financing the
equipment owned by them. As a result, the financing costs associated with
such equipment are characterized as operating expenses. The Company's
Adjusted Operating Ratio, which removes such implied financing costs from
operating expenses, was 91.9%, 93.2%, 92.9%, 89.6%, and 88.5% for the years
ended December 31, 1991, 1992, 1993, 1994, and 1995, respectively, and
88.5% and 91.1% for the three-month periods ended March 31, 1995 and 1996,
respectively. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a more complete discussion of
Adjusted Operating Ratio.
(5) Net of fuel surcharge.
(6) Adjusted to give effect to (i) the sale of 1,500,000 shares of Class A
Common Stock by the Company and application of the net proceeds as
described in "Use of Proceeds;" (ii) the sale of 500,000 shares of Class A
Common Stock by the ESOP (as hereinafter defined) and application of the
net proceeds of unallocated shares sold by the ESOP to eliminate ESOP-
related debt; and (iii) the elimination of the participants' put option
with respect to vested ESOP shares contemporaneously with this offering.
See "Use of Proceeds," "Capitalization," and Note 9 to Consolidated
Financial Statements.

5
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following risk
factors should be considered carefully in evaluating an investment in the
shares of Class A Common Stock offered hereby.

RECRUITMENT AND RETENTION OF QUALIFIED DRIVERS AND INDEPENDENT CONTRACTORS

Competition for drivers and independent contractors is intense in the
trucking industry, and the Company occasionally experiences difficulty
attracting and retaining enough qualified drivers and independent contractors,
which results in the temporary idling of revenue equipment. There is a
chronic, industry-wide shortage of qualified drivers and independent
contractors, and this shortage could affect the Company's operations and
profitability in the future, force the Company to significantly increase the
compensation it pays to employee drivers and independent contractors, or
curtail the Company's growth. Difficulty in attracting and retaining qualified
drivers and independent contractors would have a materially adverse effect
upon the Company's operations and ability to grow. See "Business--Drivers,
Independent Contractors, and Other Personnel."

BUSINESS CYCLES AND INDUSTRYWIDE COST INCREASES

The Company has little or no control over economic factors such as fuel
prices, fuel tax and interest rate fluctuations, economic recessions, and
customers' business cycles. Significant increases in fuel prices, other
operating costs, or interest rates, to the extent not offset by increases in
freight rates, would adversely affect the Company's operating results, both as
a result of increased direct expenses and because of the possibility that
independent contractors, who are responsible for paying for their own
equipment, fuel, and other costs, could seek increased compensation in the
form of a higher percentage of revenue per load hauled. Fuel prices have
increased sharply during 1996. Prolonged or further increases could adversely
affect future results. Economic recessions or downturns in customers' business
cycles, particularly in the steel and building material industries, also could
have a materially adverse effect upon the operating results of the Company. If
the resale value of the Company's revenue equipment were to decline, the
Company could find it necessary to retain some of its equipment longer, with a
resulting increase in operating expenses for maintenance and repairs. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Fuel Availability and Cost."

RELIANCE UPON AGENTS AND INDEPENDENT CONTRACTORS

The Company relies to some extent upon the services of independent
commission agents to market its transportation services and act as
intermediaries with customers, and upon independent contractors to provide and
operate a significant portion of its tractor fleet. Contracts with agents and
independent contractors are, in most cases, terminable upon short notice by
either party. Although Smithway believes it has good relationships with its
agents and independent contractors, there can be no assurance that it will
continue to succeed in retaining them or that it can replace agents or
independent contractors who terminate their contracts with equally qualified
persons. Furthermore, because the agents have the primary relationship with
the customers to whom they provide the Company's services, some customers are
likely to terminate their relationship with the Company if an agent ceases his
or her association with Smithway. See "Business--Operations" and "Drivers,
Independent Contractors, and Other Personnel."

GROWTH OF BUSINESS

The Company has experienced a significant and rapid rate of growth in
earnings from operations and net earnings since 1991, which rate cannot be
sustained over an extended period. There can be no assurance that the Company
will successfully adapt its management, administrative, and operational
systems to respond to any future growth, or that the Company's operating
margins, leverage, and net earnings will not be adversely affected by future
changes in or expansion of the business or by changes in economic conditions.
Further, acquiring other truckload carriers comprises a significant component
of the Company's growth strategy, and there can be no assurance that the
Company will negotiate and conclude acquisitions in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Strategy."

6
<PAGE>

CAPITAL REQUIREMENTS; LEVERAGE

The trucking industry is very capital intensive. The Company historically
has relied upon debt and operating leases to finance new revenue equipment,
and it has granted its lenders a lien on substantially all of its assets. If
in the future the Company were unable to recruit adequate numbers of
independent contractors, borrow sufficient funds, enter into acceptable
operating lease arrangements, or raise additional equity, the resulting
capital shortage would impair the Company's ability to acquire additional
revenue equipment and adversely affect the Company's growth and profitability.
The Company currently has a long-term debt-to-capitalization ratio higher than
many of its competitors. Although the Company's long-term debt-to-
capitalization ratio will improve significantly after application of the net
proceeds from this offering, the Company's debt can be expected to increase in
future periods. See "Use of Proceeds," "Capitalization," and "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

DEPENDENCE UPON KEY PERSONNEL

The Company's success is highly dependent upon the continued services of the
Company's senior management team, particularly William G. Smith, the Company's
Chairman of the Board, President, and Chief Executive Officer, none of whom
has an employment agreement. The loss of one or more of these executives could
have a materially adverse effect upon the Company. The Company's success also
depends upon its ability to attract and retain skilled employees. There is
significant competition for qualified personnel in the trucking industry.
There can be no assurance that the Company will attract and retain qualified
management personnel in the future. The Company maintains a $1 million "key
man" life insurance policy on William G. Smith. See "Management."

COMPETITION

The trucking industry is highly competitive and includes numerous regional,
inter-regional, and national truckload carriers, none of which dominates the
market. The Company competes primarily with short-to-medium-haul flatbed
carriers, "private" transportation by shippers using proprietary fleets, and,
to a limited extent, with alternative forms of transportation, such as
railroads and rail-truck intermodal service. Competition historically has
created downward pressure on the trucking industry's pricing structure. Many
of the Company's competitors have greater financial resources, operate more
equipment, and transport more freight than the Company, and many large
truckload carriers have an established presence in the flatbed market segment.
See "Business--Competition."

VOTING CONTROL OF THE COMPANY

On all matters with respect to which the Company's stockholders have a right
to vote, including the election of directors, each share of Class A Common
Stock is entitled to one vote, while each share of Class B Common Stock is
entitled to two votes. The Class B Common Stock is convertible into shares of
Class A Common Stock on a share-for-share basis at the election of the holder
and will be converted automatically into shares of Class A Common Stock if
beneficially owned by any person other than William G. Smith or certain
members of his immediate family. Upon completion of this offering, the Smiths,
directly and indirectly through the ESOP, will beneficially own approximately
28.3% of the outstanding shares of Class A Common Stock and all of the
outstanding shares of Class B Common Stock, which together will represent
approximately 42.7% of all of the outstanding shares of Common Stock and 52.2%
of the total voting power of the Company's outstanding shares (38.7% ownership
and 48.6% of the total voting power if the underwriters' over-allotment option
is exercised in full). Upon completion of this offering, the ESOP will own, in
addition to the shares allocated to the Smiths' ESOP accounts, 11.6% of all
outstanding shares of Common Stock and 9.7% of the total voting power of the
Company's outstanding shares. After this offering, ESOP participants will be
entitled to direct the trustee as to

7
<PAGE>

voting the shares allocated in their accounts and the trustee will have
authority to vote the 164,628 unallocated shares (2.7% of total voting power
after this offering), and shares for which no direction is given. There will
be no unallocated shares following retirement of the ESOP-related debt. The
trustee also has the power to dispose of shares held by the ESOP. As long as
the Smiths control a majority of the votes entitled to be cast by the
Company's Common Stock, they will have the ability to elect the entire Board
of Directors of the Company, determine the outcome of all matters involving a
stockholder vote, and take certain actions by written consent with proper
notice given to the other stockholders. Control by the Smiths of a majority of
the votes entitled to be cast by the outstanding Common Stock could make it
more difficult for a third party to acquire, or discourage a third party from
attempting to acquire, control of the Company. See "Principal and Selling
Stockholders" and "Description of Capital Stock."

NO PRIOR PUBLIC MARKET FOR CLASS A COMMON STOCK; DETERMINATION OF OFFERING
PRICE

Prior to this offering, there has been no public market for the Class A
Common Stock, and there can be no assurance that an active trading market will
develop or, if developed, that such market will be sustained or that the stock
will trade at or above the initial public offering price. The initial public
offering price of the shares of Class A Common Stock offered hereby has been
determined by negotiation among the Company, the Selling Stockholders, and the
Underwriters and may bear no relationship to the price at which the Class A
Common Stock will trade after completion of this offering. See "Underwriting"
for a discussion of the factors considered in determining the initial public
offering price. From time to time the stock market experiences price and
volume volatility, which may affect the market price of the Class A Common
Stock for reasons unrelated to the Company's performance.

CLAIMS EXPOSURE AND INSURANCE COSTS

Trucking companies, including the Company, face multiple claims for personal
injury and property damage relating to accidents, cargo damage, and workers'
compensation. The Company currently maintains liability insurance for bodily
injury, property damage, and cargo damage with a deductible of $50,000, along
with workers' compensation insurance with a deductible, in states in which a
deductible is allowed, of $100,000. To the extent that the Company experiences
a material increase in the frequency or severity of accidents or workers'
compensation claims, or unfavorable developments on existing claims, the
Company's operating results and financial condition could be materially
adversely affected. Significant increases in the Company's claims and
insurance cost, to the extent not offset by rate increases, would reduce the
Company's profitability. See "Business--Safety and Insurance."

ENVIRONMENTAL HAZARDS

The Company's operations are subject to various environmental laws and
regulations dealing with the transportation, storage, presence, use, disposal,
and handling of hazardous materials and hazardous wastes, discharge of
stormwater, and underground fuel storage tanks. The Company transports certain
commodities that may be deemed hazardous substances, and its Fort Dodge, Iowa,
headquarters has an above-ground fuel storage tank and fueling facility. If
the Company should be involved in a spill or other accident involving
hazardous substances, if any such substances were found on the Company's
properties, or if the Company were found to be in violation of applicable laws
and regulations, the Company could be responsible for clean-up costs, property
damage, and fines or other penalties, any one of which could have a materially
adverse effect on the Company. See "Risk Factors--Government Regulation" and
"Business--Regulation."

TAXATION OF INDEPENDENT CONTRACTORS

From time to time, tax authorities have sought to assert that independent
contractors in the trucking industry are employees, rather than independent
contractors. No tax claim has been made with respect to the Company's
independent contractors, and management believes that its independent
contractors are not employees under existing interpretations of federal and
state tax laws. However, there can be no assurance that tax authorities will

8
<PAGE>

not successfully challenge this position, that such interpretations will not
change, or that tax laws will not change. If the independent contractors were
determined to be employees, such determination could materially increase the
Company's social security and workers' compensation expense, as well as its
obligation to provide certain health benefits and withhold federal and state
income tax, and its potential liability for failing to do so in the past.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of Class A Common Stock or their
availability for sale in the public market following this offering may
adversely affect prevailing market prices for the Class A Common Stock. Upon
completion of this offering, the Company will have 4,999,293 shares of
outstanding Common Stock. All of the 2,150,000 shares of Class A Common Stock
offered hereby will be freely tradeable without restriction or further
registration unless acquired by "affiliates" of the Company as defined in Rule
144 under the Securities Act of 1933, as amended (the "Securities Act"). In
connection with this offering, the Company and its officers and directors, who
will beneficially own an aggregate 2,847,636 shares of outstanding Common
Stock after this offering, have agreed not to sell or otherwise dispose of any
shares, directly or indirectly, for 180 days from the date of this Prospectus
without the prior written consent of Morgan Keegan & Company, Inc. (except for
required distributions from the ESOP to former participants and any shares
issued by the Company under its Incentive Stock Plan). See "Management--
Incentive Stock Plan" and "Employee Stock Ownership Plan and 401(k) Plan,"
"Principal and Selling Stockholders," and "Shares Eligible for Future Sale."

LIMITATIONS ON TAKEOVERS

Certain corporate governance and statutory provisions may inhibit changes in
control of the Company. Applicable provisions of Nevada law restrict the
voting rights of certain acquirors and the ability of such persons to engage
in unapproved business combinations with the Company. The Company's Articles
of Incorporation permit the issuance of additional shares of authorized but
unissued Class B Common Stock, which is entitled to two votes per share while
beneficially owned by William G. Smith or certain members of his immediate
family. The Articles of Incorporation also allow the Board of Directors to
issue and establish all relevant provisions of preferred stock without further
action by the stockholders. Such preferred stock could be used, for example,
in a stockholders' rights plan. The Company's Bylaws limit the persons who may
call a special meeting of the stockholders. In addition, the Smiths
beneficially own stock entitled to a majority of the voting power of all of
the Company's outstanding Common Stock. These provisions and the Smiths' stock
ownership could make a takeover more difficult or discourage a person from
attempting a takeover, including a takeover that some stockholders may deem to
be in their best interests. See "Description of Capital Stock--Certain
Provisions of Articles and Bylaws" and "Statutory Anti-Takeover Provisions."

GOVERNMENT REGULATION

Truckload companies are subject to regulation by various federal and state
agencies, including the United States Department of Transportation (the
"DOT"). These regulatory authorities govern activities such as operational
safety, accounting systems, and financial reporting. State regulation of
intrastate authority and routes of service was preempted by federal law in
1995. The abolition of the Interstate Commerce Commission effective January 1,
1996, terminated regulation by that agency, including regulation of truckload
rates and certain mergers, consolidations, and acquisitions (subject to
continued antitrust review by the Department of Justice and the Federal Trade
Commission). The Company also is subject to regulations promulgated by the
Environmental Protection Agency ("EPA") and similar state agencies. See "Risk
Factors--Environmental Hazards" and "Business--Regulation."

9
<PAGE>

LACK OF DIVIDENDS

The Company has never declared or paid cash dividends on its capital stock.
The Company intends to continue to retain earnings to finance the growth and
development of its business and does not anticipate paying cash dividends in
the foreseeable future. Any payment of cash dividends in the future will
depend upon the Company's financial condition, capital requirements, earnings,
restrictions under loan agreements, and other factors the Board of Directors
may deem relevant. See "Dividend Policy."

DILUTION

At the initial public offering price of $8.50 per share, purchasers of Class
A Common Stock in this offering will incur immediate and substantial dilution
in the net tangible book value of their shares of $4.40 per share.

ACQUISITION OF RELATED COMPANIES AND HOLDING COMPANY FORMATION

William G. Smith and his father purchased the Company, then known as Acme
Transfer, Inc., an Iowa corporation, in 1958. In 1972, the name was changed to
Smithway Motor Xpress, Inc. In preparation for this offering, the Company
effected a reverse stock split, after which all remaining stockholders
consented to (i) the formation of Smithway-Nevada under the laws of Nevada and
(ii) the acquisition of Smithway-Iowa by Smithway-Nevada, resulting in
Smithway-Iowa becoming a wholly owned subsidiary of Smithway-Nevada effective
January 31, 1995. Also in preparation for this offering, the Company acquired
related entities STB and Wilmar, both of which were wholly owned by the
Smiths. The Company also acquired the 7 tractors and 28 trailers that formerly
had been leased to the Company by Smith Leasing. The STB, Wilmar, and Smith
Leasing transactions were accounted for in a manner similar to a pooling of
interests because of common ownership and related operations; accordingly, the
results of such entities were combined with the Company's results and all
inter-company transactions were eliminated in all periods presented in this
Prospectus. Unless the context otherwise requires, all information in this
Prospectus assumes that the Smithway-Iowa, STB, Wilmar, and Smith Leasing
transactions and all Common Stock issuances in connection therewith occurred
on January 1, 1991.

Smithway-Nevada issued an aggregate 3,186,763 shares of Common Stock to the
Smiths, G. Larry Owens, and the ESOP, in proportion to their respective
interests, in exchange for all of their capital stock of Smithway-Iowa. The
Smiths received 942,146 shares of Class A Common Stock and 1,000,000 shares of
Class B Common Stock, Owens received 147,879 shares of Class A Common Stock,
and the ESOP received 1,096,738 shares of Class A Common Stock.

In addition, the Company issued to the Smiths (i) 269,500 shares of Class A
Common Stock in exchange for 100% of the capital stock of STB, which had been
appraised by Stern Brothers Valuation Advisors, Inc., Kansas City, Missouri,
as having a value equal to 7.7% of the combined Smithway-STB enterprise; (ii)
55,126 shares of Class A Common Stock in exchange for the 7 tractors and 28
trailers previously owned by William G. Smith d/b/a Smith Leasing (which had
been appraised by Allstate Sales Corporation as to the tractors and Central
Trailer Service Ltd. as to the trailers at $780,000, less $234,257 of
associated debt assumed by the Company); and (iii) 2,308 shares of Class A
Common Stock in exchange for 100% of the capital stock of Wilmar, which was
valued at the $22,846 excess of appraised value of the revenue equipment owned
by Wilmar over associated debt. Kenworth of Omaha had appraised the equipment
owned by Wilmar.

10
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,500,000 shares of
Class A Common Stock offered by it hereby are estimated to be approximately
$10.9 million ($12.4 million if the underwriters' over-allotment option is
exercised in full), after deducting underwriting discounts and commissions and
estimated expenses of this offering payable by the Company. The funds
available for use by the Company will be approximately $11.4 million ($12.9
million if the underwriters' over-allotment option is exercised in full),
because the Company had paid approximately $494,000 in offering costs as of
March 31, 1996.

The net proceeds will be used to (i) repay the Company's line of credit,
which is secured by accounts receivable, (ii) reduce other secured debt, and
(iii) pay approximately $35,000 in prepayment penalties. The line of credit
and other secured debt amounted to approximately $1.4 million and $26.3
million, respectively, at March 31, 1996. The debt to be repaid bears interest
at rates ranging from 5.3% to 10.3% per annum, and matures at various dates
through December 2006. See Note 6 to Consolidated Financial Statements. Of the
secured debt to be repaid, approximately $2.3 million was incurred within one
year prior to the date hereof. Pending application of the net proceeds as
described above, the Company intends to invest such proceeds in short-term,
interest-bearing securities.

Management also intends to continue the Company's strategy of acquiring
flatbed and dry van truckload carriers. Management is presently evaluating
several acquisition opportunities but has not undertaken substantive
negotiations with any of the potential targets. To the extent the Company pays
cash in any acquisition it may be deemed to have used offering proceeds to do
so.

The Company will not receive any proceeds from the sale of shares of Class A
Common Stock by the Selling Stockholders. See "Principal and Selling
Stockholders."

DIVIDEND POLICY

The Company never has declared or paid cash dividends on its capital stock.
The Company intends to continue to retain earnings to finance the growth and
development of its business and does not anticipate paying cash dividends in
the foreseeable future. Any payment of cash dividends in the future will
depend upon the Company's financial condition, capital requirements, earnings,
restrictions under loan agreements, and other factors the Board of Directors
may deem relevant.

11
<PAGE>

CAPITALIZATION

The following table sets forth the current maturities of long-term debt and
the capitalization of the Company as of March 31, 1996, and as adjusted to
give effect to (i) the sale of the 1,500,000 shares of Class A Common Stock
offered by the Company hereby, (ii) application of the estimated net proceeds
therefrom as described in "Use of Proceeds," (iii) the elimination of ESOP-
related debt, and (iv) the elimination of the put option with respect to
vested ESOP shares. This table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Consolidated Financial Statements and Notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Line of credit.......................................... $ 1,402 $ --
Current maturities of long-term debt.................... 5,517 3,462
------- -------
Total short-term debt................................. $ 6,919 $ 3,462
======= =======
Long-term debt:
Secured debt............................................ $20,928 $12,963
ESOP-related debt....................................... 110 --
------- -------
Total long-term debt (net of current maturities)...... 21,038 12,963
------- -------
Redeemable Class A Common Stock(1); 751,770 shares issued
and outstanding, none issued and outstanding as adjusted. 1,634 --
------- -------
Non-redeemable common stockholders' equity(2):
Preferred stock, $.01 par value; 5,000,000 shares
authorized; none issued and outstanding................ -- --
Class A Common Stock, $.01 par value; 20,000,000 shares
authorized; 1,747,523 shares issued and outstanding,
3,999,293 shares issued and outstanding as adjusted.... 17 40
Class B Common Stock, $.01 par value; 5,000,000 shares
authorized; 1,000,000 shares issued and outstanding.... 10 10
Additional paid-in capital.............................. -- 11,220
Reacquired shares....................................... (78) (78)
Retained earnings....................................... 8,430 9,658
Equity reduction for ESOP-related debt(3)............... (215) --
------- -------
Total non-redeemable common stockholders' equity...... 8,164 20,850
------- -------
Total capitalization.................................. $30,836 $33,813
======= =======
</TABLE>
- --------
(1) The approximately 752,000 shares of Class A Common Stock that are vested
in participants' accounts are subject to the right of the participants to
"put" the shares to the Company at appraised value upon termination of
their employment. Accordingly, such shares, while subject to this put
option, are not classified as part of non-redeemable common stockholders'
equity and are referred to as "redeemable" Class A Common Stock. Under
applicable law and the ESOP documents, the participants' put option
terminates automatically concurrently with this offering. See Note 9 to
Consolidated Financial Statements.
(2) Excludes 225,000 shares of Class A Common Stock reserved for issuance to
key employees under the Company's Incentive Stock Plan (under which
options for 85,000 shares have been granted) and 25,000 shares of Class A
Common Stock reserved for issuance to non-employee directors under the
Company's Outside Director Stock Plan.
(3) The ESOP owes Harold C. Smith for the remaining installments of the
purchase price of the stock it acquired from him on December 31, 1986. The
Company is required to reflect this amount as a liability so long as the
only source of payment of the debt is the Company's annual contribution to
the ESOP. Upon completion of this offering and the sale of 500,000 shares
of Class A Common Stock by the ESOP, the proceeds received by the ESOP
will exceed the ESOP-related debt; therefore the Company's consolidated
financial statements will no longer reflect the ESOP-related debt as a
liability.

12
<PAGE>

DILUTION

At March 31, 1996, the Company's net tangible book value was approximately
$7.3 million, or $2.67 per share of Common Stock. Net tangible book value per
share is determined by dividing the total number of outstanding shares of non-
redeemable Class A and Class B Common Stock into the net tangible book value
of the Company (total tangible assets less total liabilities and redeemable
Class A Common Stock ). After giving effect to (i) the sale by the Company of
the 1,500,000 shares of Class A Common Stock offered by it hereby, net of
underwriting discounts and commissions and estimated offering expenses payable
by the Company; (ii) the elimination of ESOP-related debt, and (iii) the
elimination of the participants' put option with respect to vested ESOP
shares, the Company's net tangible book value at March 31, 1996, would have
been $20.5 million or $4.10 per share of Common Stock. This represents an
immediate increase in net tangible book value of $1.43 per share to existing
stockholders and an immediate dilution in net tangible book value of $4.40 per
share to purchasers of shares of Class A Common Stock in this offering. The
following table illustrates this dilution at March 31, 1996, on a per share
basis:

<TABLE>
<S> <C> <C>
Initial public offering price per share............................. $8.50
Net tangible book value per share before offering................. $2.67
Increase per share attributable to new investors(1)............... 1.43
-----
Pro forma net tangible book value per share after offering.......... 4.10
-----
Dilution per share to new investors................................. $4.40
=====
</TABLE>

The following table shows the difference between existing stockholders and
the purchasers of shares in this offering with respect to the number of shares
purchased from the Company, the total consideration paid, and the average
price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders(2).... 3,499,293 70.0% $ 990,000 7.2% $0.28
New investors............... 1,500,000 30.0% $12,750,000 92.8% $8.50
--------- ----- ----------- -----
Total................... 4,999,293 100.0% $13,740,000 100.0%
========= ===== =========== =====
</TABLE>
- --------
(1) Included in this amount is $.37 attributable to the elimination of ESOP
debt and the put option with respect to vested ESOP shares
contemporaneously with this offering.
(2) Shares sold by the Selling Stockholders in this offering will reduce the
number of shares held by the Selling Stockholders to 1,699,757 shares of
Class A Common Stock and 1,000,000 shares of Class B Common Stock, or
54.0% of the total shares of Common Stock to be outstanding after this
offering. See "Principal and Selling Stockholders."

13
<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT SHARE AMOUNTS AND OPERATING DATA)

The selected consolidated statement of operations and balance sheet data as
of and for each of the years in the five-year period ended December 31, 1995
are derived from the Company's Consolidated Financial Statements. The
Consolidated Financial Statements for the years ended December 31, 1995 and
1994 have been audited by KPMG Peat Marwick LLP, independent auditors. The
Consolidated Financial Statements for the years ended December 31, 1992 and
1993 have been audited by Denman & Company, L.L.P., independent auditors. The
unconsolidated financial statements of Smithway-Iowa for the year ended
December 31, 1991, were audited by Denman & Company, L.L.P., independent
auditors, and in such year Smithway-Iowa contributed more than 94% of the
revenue generated by the consolidated operations of the Company. The
Consolidated Financial Statements for the three-month periods ended March 31,
1995 and 1996, are unaudited. In management's opinion, such unaudited
financial statements include all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the Company's
financial condition and results of operations for such periods. The results
for the three-month period ended March 31, 1996, are not necessarily
indicative of the results expected for the full year. The selected
consolidated financial data should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Operating revenue...... $ 49,832 $ 56,073 $ 59,931 $ 69,180 $ 77,339 $ 18,273 $ 19,860
Operating expenses:
Purchased
transportation(1)... 27,849 23,131 23,797 27,420 31,621 7,265 7,792
Compensation and
employee
benefits(1)......... 3,105 13,039 13,840 15,877 17,182 4,081 4,539
Fuel, supplies, and
maintenance......... 7,154 8,054 8,876 9,368 10,183 2,373 2,799
Insurance and claims. 2,160 2,236 2,318 2,238 1,827 532 374
Taxes and licenses... 1,145 1,346 1,492 1,454 1,588 375 393
General and
administrative...... 3,323 3,050 3,357 3,512 3,592 862 942
Communications and
utilities........... 489 563 543 585 758 156 219
Depreciation and
amortization........ 2,258 2,551 2,821 2,774 3,879 949 1,506
--------- --------- --------- --------- --------- --------- ---------
Total operating
expenses............ 47,483 53,970 57,044 63,228 70,630 16,593 18,564
--------- --------- --------- --------- --------- --------- ---------
Earnings from
operations............ 2,349 2,103 2,887 5,952 6,709 1,680 1,296
Interest expense
(net)................. 1,597 1,345 1,179 966 1,225 250 414
--------- --------- --------- --------- --------- --------- ---------
Earnings before income
taxes and accounting
change................ 752 758 1,708 4,986 5,484 1,430 882
Income taxes........... 250 228 603 1,879 2,393 617 369
Accounting change...... -- -- 86 -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net earnings........... 502 530 1,019 3,107 3,091 813 513
PRO FORMA DATA:
Pro forma provision
for income taxes(2)... 109 155 177 232 -- -- --
--------- --------- --------- --------- --------- --------- ---------
Pro forma net
earnings(2)........... $ 393 $ 375 $ 842 $ 2,875 $ 3,091 $ 813 $ 513
========= ========= ========= ========= ========= ========= =========
Pro forma net earnings
per common share(2)
(3)................... $ 0.11 $ 0.11 $ 0.25 $ 0.82 $ 0.88 $ 0.23 $ 0.15
========= ========= ========= ========= ========= ========= =========
Pro forma weighted
average shares
outstanding(3)........ 3,430,524 3,430,524 3,428,270 3,498,212 3,524,042 3,535,650 3,501,681
OPERATING DATA(4):
Operating ratio(5)..... 95.3% 96.3% 95.2% 91.4% 91.3% 90.8% 93.5%
Average revenue per
tractor per week...... $ 1,828 $ 2,015 $ 2,129 $ 2,272 $ 2,160 $ 2,257 $ 1,980
Average revenue per
loaded mile........... $ 1.30(6) $ 1.30(6) $ 1.33 $ 1.39 $ 1.38 $ 1.38 $ 1.37
Empty miles
percentage............ 16.6% 16.0% 15.5% 15.1% 15.1% 15.4% 16.6%
Average length of haul
in miles.............. 589 599 583 571 563 581 557
Company tractors at
end of period......... 256 261 288 302 376 317 403
Independent contractor
tractors at end of
period................ 214 229 219 258 303 265 317
Weighted average
tractors during
period................ 470 489 497 532 619 565 722
Trailers at end of
period................ 765 818 814 911 1,167 909 1,175
BALANCE SHEET DATA (AT
END OF PERIOD):
Working capital
(deficit)............. $ (2,169) $ (2,835) $ (2,236) $ 371 $ 2,516 $ 650 $ (416)
Net property and
equipment............. 12,903 12,771 14,211 15,824 27,843 17,939 33,856
Total assets........... 19,101 20,471 22,569 25,229 40,702 27,754 45,974
Long-term debt,
including current
maturities............ 10,673 9,744 10,899 11,775 23,219 13,065 26,555
Total non-redeemable
common stockholders'
equity................ 1,908 2,050 2,513 4,789 7,871 5,754 8,164
</TABLE>

(footnotes are on the following page)

14
<PAGE>

- --------
(1) In 1991, the Company obtained certain personnel, primarily Company
drivers, through a related-party employee leasing company. As a result,
amounts paid to the employee leasing company and included in purchased
transportation during that year have since been included in compensation
and employee benefits.
(2) Adjusted to reflect a provision for pro forma income taxes for certain
related entities acquired by Smithway, the earnings of which were not
subject to corporate income. Such transactions were accounted for in a
manner similar to a pooling of interests. See "Acquisition of Related
Companies and Holding Company Formation" and Notes 1 and 14 to
Consolidated Financial Statements.
(3) Adjusted to reflect the issuance of 3,513,697 shares of Common Stock by
the Company in the formation of the holding company and acquisition of the
related entities referred to in Note (2) above. See "Acquisition of
Related Companies and Holding Company Formation" and Note 1 to
Consolidated Financial Statements.
(4) Excludes brokerage activities except as to operating ratio.
(5) Operating expenses as a percentage of operating revenue. The Company
finances some of its revenue equipment under operating leases rather than
through debt financing or capitalized leases and utilizes independent
contractors whose compensation includes the implied cost of financing the
equipment owned by them. As a result, the financing costs associated with
such equipment are characterized as operating expenses. The Company's
Adjusted Operating Ratio, which removes such implied financing costs from
operating expenses, was 91.9%, 93.2%, 92.9%, 89.6%, and 88.5% for the
years ended December 31, 1991, 1992, 1993, 1994, and 1995, respectively,
and 88.5% and 91.1% for the three-month periods ended March 31, 1995 and
1996, respectively. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a more complete explanation of
Adjusted Operating Ratio.
(6) Net of fuel surcharges.

15
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company focused upon net earnings growth during the five-year period
ended December 31, 1995. During that period, management emphasized
conservative revenue growth and improved profitability, while implementing
systems to support sustained growth. Among other steps, the Company (i) added
management depth and financial expertise; (ii) diversified its shipper base
and freight profile; (iii) implemented the "Spectrum" freight selection
software into its dispatch operation; (iv) founded the van division; (v)
returned to its policy of compensating most Company drivers based upon a
percentage of revenue per load hauled, as it had consistently paid its
independent contractors, rather than by the mile; and (vi) broadened its use
of incentive-based compensation for non-driver employees. These initiatives
resulted in 30.0% compounded annual growth in earnings from operations, 67.5%
compounded annual growth in net earnings, and 68.2% compounded annual growth
in net earnings per share during the period (pro forma net earnings, which
reflect a provision for C corporation income taxes for consolidated entities
which were S corporations and a sole proprietorship). The Company's earnings
growth was achieved through a combination of 11.6% compounded annual growth in
revenue during the five years ended December 31, 1995, and an improvement in
the Company's operating ratio to 91.3% in 1995 from 95.3% in 1991. Management
does not anticipate that the Company will continue to improve its operating
ratio and net earnings at the percentage rate achieved during the five-year
period ended December 31, 1995.

The Company operates a fleet comprised of both Company-owned revenue
equipment and revenue equipment owned by independent contractors. Using
independent contractors reduces fixed costs, capital requirements, and revenue
equipment debt, and improves return on equity. The use of independent
contractors affects the Company's expense categories by increasing purchased
transportation while decreasing compensation and employee benefits; fuel,
supplies, and maintenance; insurance and claims; and depreciation. In
addition, the independent contractors' implied financing costs for their
equipment and the implied interest component of operating leases are reflected
as operating expenses (purchased transportation) rather than interest expense,
which negatively impacts the Company's operating ratio. As a result,
management evaluates the Company's operating efficiency through the Company's
"Adjusted Operating Ratio." The Adjusted Operating Ratio is calculated by
assuming that all tractors and trailers obtained from independent contractors
and under operating leases were Company-owned equipment having a value equal
to the average net book value of the tractors and trailers owned by the
Company, with such amount financed at an interest rate equal to the average
interest rate on the Company's equipment debt. The average net book value of
the Company-owned tractors and the weighted average number of tractors
provided by both independent contractors and third-party lessors,
respectively, were $38,731 and 375 in 1991, $34,271 and 391 in 1992, $40,846
and 374 in 1993, $36,649 and 366 in 1994, and $64,371 and 380 in 1995. The
average net book value of the Company-owned trailers and the weighted average
number of trailers provided by both independent contractors and third-party
lessors, respectively, were $9,266 and 185 in 1991, $9,092 and 241 in 1992,
$7,587 and 236 in 1993, $8,437 and 247, $9,843 and 316 in 1995. The Company's
average interest rate on equipment debt in such years was 10.5%, 11.1%, 7.9%,
7.8%, and 7.8%. The amount of assumed interest expense is then subtracted from
operating expenses to produce an operating ratio that excludes financing
costs. The total amount of assumed interest expense subtracted from operating
expenses was approximately $1.7 million, $1.7 million, $1.3 million, $1.2
million, and $2.2 million in each of 1991 through 1995, respectively.
Management believes that the Company's Adjusted Operating Ratio reflects
operating efficiency more accurately than its operating ratio because the
Adjusted Operating Ratio excludes the effects of fluctuating numbers of
independent contractors and assets obtained under operating leases.

The Company's effective income tax rate reflected herein and in its
Consolidated Financial Statements is different from the combined federal and
state expected tax rate for a corporation headquartered in Iowa because (i)
the net earnings of Wilmar and Smith Leasing were not subject to corporate
income taxes, lowering the Company's effective tax rate prior to 1995; and
(ii) beginning in 1992, the Company began absorbing driver per diem travel
expenses, a significant portion of which are not deductible and inflate the
Company's effective tax rate. The impact of the Company's paying driver per
diem travel expenses varies depending upon the ratio of drivers to independent
contractors and the Company's net earnings. The Company acquired Wilmar and
Smith Leasing effective January 31, 1995, and since such date has paid
corporate taxes on the pretax earnings attributable to such entities. The pro
forma provision for income taxes reflected in this Prospectus reflects the
income taxes that would have been payable on the pretax earnings of such
entities.

16
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth the percentage relationship of certain items
to revenue for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
------------------- --------------------
1993 1994 1995 1995 1996
----- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
Operating revenue................... 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Purchased transportation.......... 39.7 39.6 40.9 39.8 39.2
Compensation and employee
benefits......................... 23.1 23.0 22.2 22.3 22.9
Fuel, supplies, and maintenance... 14.8 13.5 13.2 13.0 14.1
Insurance and claims.............. 3.9 3.2 2.4 2.9 1.9
Taxes and licenses................ 2.5 2.1 2.1 2.1 2.0
General and administrative........ 5.6 5.1 4.6 4.7 4.7
Communications and utilities...... 0.9 0.8 1.0 0.9 1.1
Depreciation and amortization..... 4.7 4.0 5.0 5.2 7.6
----- ----- ----- --------- ---------
Total operating expenses........ 95.2 91.4 91.3 90.8 93.5
----- ----- ----- --------- ---------
Earnings from operations............ 4.8 8.6 8.7 9.2 6.5
Interest expense (net).............. 2.0 1.4 1.6 1.4 2.1
----- ----- ----- --------- ---------
Earnings before income taxes and
accounting
change............................. 2.8 7.2 7.1 7.8 4.4
Income taxes including pro forma
provision for
income taxes....................... 1.3 3.0 3.1 3.4 1.9
----- ----- ----- --------- ---------
Pro forma earnings before accounting
change............................. 1.5 4.2 4.0 4.4 2.6
Accounting change................... 0.1 -- -- -- --
----- ----- ----- --------- ---------
Pro forma net earnings.............. 1.4% 4.2% 4.0% 4.4% 2.6%
===== ===== ===== ========= =========
</TABLE>

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 WITH THREE MONTHS ENDED MARCH
31, 1995.

Operating revenue increased 8.7% to $19.9 million during the 1996 period
from $18.3 million during the 1995 period, primarily as a result of a 27.8%
increase in weighted average tractors, to 722 in the 1996 period. Revenue per
loaded mile decreased slightly due to rate pressure caused by a soft freight
market and empty miles increased to 16.6% in the 1996 period from 15.4% in the
1995 period, which resulted in a 2.1% decrease in revenue per operated mile.
Revenue per tractor was adversely affected during the 1996 period because the
Company held 56 tractors that were traded or sold in March that were not
producing revenue during January and February and acquired 50 tractors in
January in anticipation of the Smith Trucking acquisition that were not placed
in service until February.

Purchased transportation decreased to 39.2% of revenue during the 1996
period from 39.8% in the 1995 period, while compensation and employee benefits
increased to 22.9% of revenue during the 1996 period from 22.3% during the
1995 period. These changes were attributable to an increase in the percentage
of the Company's tractor fleet being operated by Company-employed drivers in
relation to independent contractors and a decrease in revenue from brokerage
operations during the 1996 period.

Fuel, supplies, and maintenance increased to 14.1% of revenue during the
1996 period from 13.0% during the 1995 period, principally as a result of a
6.2% increase in the price per gallon of fuel.

Insurance and claims decreased to 1.9% of revenue during the 1996 period
from 2.9% during the 1995 period, as the Company's safety record continued to
improve and resulted in premium decreases as revenue increased.

17
<PAGE>

Taxes and licenses remained essentially constant at 2.0% of revenue in the
1996 period compared with 2.1% in the 1995 period.

General and administrative expenses remained constant at 4.7% of revenue in
each period.

Communications and utilities increased slightly, to 1.1% of revenue during
the 1996 period from .9% during the 1995 period, as the Company had begun
equipping its tractors with satellite-based tracking and communication units
during the 1995 period and had completed installation in 100% of Company-owned
tractors during the 1996 period.

Depreciation and amortization increased to 7.6% of revenue during the 1996
period from 5.2% during the 1995 period. The increase was attributable to a
combination of (i) a newer tractor fleet and the installation of satellite-
based tracking and communication units, which increased the cost of equipment
being depreciated, (ii) an increase in the percentage of the Company's fleet
being comprised of Company-owned equipment, and (iii) a 12.3% decrease in
revenue per tractor.

As a result of the foregoing, the Company's operating ratio increased to
93.5% during the 1996 period from 90.8% during the 1995 period. The Adjusted
Operating Ratio was 91.1% during the 1996 period compared with 88.5% during
the 1995 period.

Interest expense increased to 2.1% of revenue during the 1996 period from
1.4% during the 1995 period, as higher average debt balances ($22.3 million in
the 1996 period compared with $10.6 million in the 1995 period) more than
offset lower average interest rates (7.5% in the 1996 period compared with
9.1% in the 1995 period).

The Company's effective tax rate was 41.8% during the 1996 period (1.9% of
revenue) compared with 43.1% during the 1995 period (3.4% of revenue).

As a result of the factors described above, net earnings decreased to
$513,000 during the 1996 period (2.6% of revenue) from net earnings of
$813,000 during the 1995 period (4.4% of revenue).

COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994

Operating revenue increased 11.8% to $77.3 million in 1995 from $69.2
million in 1994. The revenue increase resulted primarily from a 16.4% increase
in weighted average tractors, to 619 in 1995, and a 32.8% increase in revenue
from the Company's brokerage division, to $6.3 million. Revenue per loaded
mile and empty miles percentage remained essentially constant in 1994 and
1995. Revenue per tractor per week declined 4.9%, to $2,160, in 1995 as
overcapacity in the truckload industry and a slowing economy reduced
productivity.

Purchased transportation increased to 40.9% of revenue in 1995 from 39.6% in
1994, reflecting the expenses associated with increased revenue from the
brokerage division.

Compensation and employee benefits decreased to 22.2% of revenue in 1995
from 23.0% in 1994, principally as a result of a decrease in workers'
compensation expense attributable to lower premiums negotiated by management.

Fuel, supplies, and maintenance decreased slightly to 13.2% of revenue in
1995 from 13.5% in 1994, reflecting reduced repair and maintenance expense
attributable to a newer Company-owned tractor fleet and lower average fuel
costs as a result of more efficient use of a fuel provider network. The
Company's average fuel cost decreased to $1.08 per gallon in 1995 from $1.10
in 1994.

Insurance and claims decreased to 2.4% of revenue in 1995 from 3.2% in 1994,
as the Company's safety record resulted in premium reductions while revenue
increased.

18
<PAGE>

Taxes and licenses remained constant at 2.1% of revenue during each period.

General and administrative expenses decreased to 4.6% of revenue in 1995
from 5.1% in 1994, as the percentage of revenue generated by the Company's
employees increased and the percentage of revenue generated by Smithway's
independent commission agents and third-party freight brokers (who receive
commissions larger than the revenue bonuses received by the Company's
employees) decreased. In addition, certain fixed costs remained constant while
revenue increased.

Communications and utilities increased to 1.0% of revenue in 1995 from .8%
in 1994, as the Company equipped substantially all of its Company-owned
tractors with Qualcomm satellite-based tracking and communications systems.

Depreciation and amortization increased to 5.0% of revenue in 1995 from 4.0%
in 1994, as a result of a newer fleet of Company-owned tractors and trailers,
a decrease in revenue per tractor, a higher percentage of the fleet being
comprised of Company-owned equipment, and a decrease in the gain on sale of
revenue equipment to $96,000 in 1995 from $437,000 in 1994 as the Company's
replacement cycle resulted in the disposal of fewer tractors and trailers.

As a result of the foregoing, the Company's operating ratio improved to
91.3% in 1995 from 91.4% in 1994. The Company's Adjusted Operating Ratio was
88.5% in 1995 compared with 89.6% in 1994.

Interest expense increased to 1.6% of revenue in 1995 from 1.4% in 1994,
because increased average debt balances associated with expanding the fleet of
Company-owned tractors and trailers ($17.4 million in 1995 compared with $11.0
million in 1994), more than offset lower average interest rates (8.4% in 1995
compared with 9.1% in 1994). In addition, lower revenue per tractor affected
this fixed cost as a percentage of revenue.

The Company's effective tax rate was 43.6% in 1995 (3.1% of revenue),
compared with 42.3% in 1994 (3.0% of revenue, including pro forma provision
for income taxes), in each case including the cost of nondeductible driver per
diem expense absorbed by the Company.

As a result of the factors described above, net earnings increased to $3.1
million in 1995 (4.0% of revenue) from pro forma net earnings of $2.9 million
in 1994 (4.2% of revenue).

COMPARISON OF YEAR ENDED DECEMBER 31, 1994 TO YEAR ENDED DECEMBER 31, 1993

Operating revenue increased 15.4% to $69.2 million in 1994 from $59.9
million in 1993. The revenue increase resulted primarily from an increase in
weighted average tractors of 7.0%, to 532 in 1994. As a result, average
revenue per tractor per week increased 6.7%, to $2,272 in 1994; average
revenue per loaded mile increased 4.5%, to $1.39 in 1994; and empty miles
percentage improved to 15.1% in 1994 from 15.5% in 1993.

Purchased transportation and compensation and employee benefits remained
relatively constant at 39.6% and 23.0% of revenue in 1994 versus 39.7% and
23.1% in 1993, respectively, because independent contractors, whose
compensation comprised most of purchased transportation expense, and the
majority of Company drivers are compensated based upon a percentage of revenue
per load hauled.

Fuel, supplies, and maintenance decreased to 13.5% of revenue in 1994 from
14.8% in 1993, principally as a result of increased fuel efficiency, fewer
repairs, and a higher percentage of repairs being performed under warranty, as
the Company received the benefit of new, more technologically advanced
tractors delivered late in 1993 and in 1994. The Company also benefitted from
lower average fuel costs of $1.10 per gallon in 1994 versus $1.11 in 1993.

19
<PAGE>

Insurance and claims decreased to 3.2% of revenue in 1994 from 3.9% in 1993,
as the Company's liability claims and insurance premiums remained essentially
constant as a result of its safety record and negotiated premium rate
reductions, while revenue increased 15.4%.

Taxes and licenses decreased to 2.1% of revenue in 1994 from 2.5% in 1993,
as a result of increased revenue per tractor and the fixed nature of a portion
of these expenses.

General and administrative expenses decreased to 5.1% of revenue in 1994
from 5.6% in 1993, primarily as a result of higher 1994 revenue and the fixed
nature of a portion of these expenses.

Communications and utilities decreased slightly to .8% of revenue in 1994
from .9% in 1993.

Depreciation and amortization decreased to 4.0% of revenue in 1994 from 4.7%
in 1993, as this fixed cost was offset primarily by an increase in average
revenue per tractor per week to $2,272 in 1994 from $2,129 in 1993, and an
increase in the gain on sale of revenue equipment to $437,000 in 1994 from
$72,000 in 1993, as the Company's replacement cycle resulted in the disposal
of additional tractors and trailers.

As a result of the foregoing, the Company's operating ratio improved to
91.4% in 1994 from 95.2% in 1993. The Company's Adjusted Operating Ratio was
89.6% in 1994 compared with 92.9% in 1993.

Interest expense decreased to 1.4% of revenue in 1994 from 2.0% in 1993, as
a result of slightly lower average debt balances ($11.0 million in 1994
compared with $12.6 million in 1993), lower average interest rates (9.1% in
1994 compared with 9.3% in 1993), and higher revenue per tractor.

The Company's effective tax rate, including the provision for pro forma
income taxes, was 42.3% in 1994 (3.0% of revenue), compared with 45.7% in 1993
(1.3% of revenue). The Company's effective tax rate is affected by its driver-
oriented policy of absorbing nondeductible per diem expenses. The impact of
this policy was greater in 1993 because nondeductible expenses comprised a
greater percentage of earnings before income taxes and accounting change.

As a result of the factors described above, pro forma net earnings increased
to $2.9 million in 1994 (4.2% of revenue) from $842,000 in 1993 (1.4% of
revenue). Pro forma net earnings in 1993 were negatively affected by an
$86,000 accounting change relating to the cumulative effect of changing from
the deferred method to the liability method of accounting for income taxes
upon adoption of FASB Statement No. 109. Without the accounting change, 1993
pro forma net earnings would have been $928,000 (1.5% of revenue).

LIQUIDITY AND CAPITAL RESOURCES

The growth of the Company's business has required significant investments in
new revenue equipment. Smithway historically has financed its revenue
equipment requirements with borrowings under installment notes payable to
commercial lending institutions and equipment manufacturers, borrowings under
a $5.75 million line of credit, cash flow from operations, equipment leases
from third-party lessors, and through the use of independent contractors. The
Company's primary sources of liquidity currently are funds provided by
operations and borrowings under credit agreements with financial institutions
and equipment manufacturers.

Net cash (used in) provided by operating activities was ($100,000) for the
three months ended March 31, 1996, and $6.5 million, $7.0 million, and $4.8
million for the years ended December 31, 1995, 1994, 1993, respectively. The
Company's principal use of cash from operations is to service debt and
internally finance accounts receivable associated with growth in the business.
Customer accounts receivable increased $1.7 million for the three months ended
March 31, 1996, and $404,000, $993,000, and $154,000 for the years ended
December 31, 1995, 1994, and 1993, respectively. The average age of the
Company's accounts receivable was approximately 30 days for the three months
ended March 31, 1996, and for each of 1995, 1994, and 1993.

20
<PAGE>

Net cash (used in) provided by investing activities was ($2.6 million) for
the three months ended March 31, 1996, and ($2.6 million), $81,000, and
$401,000 for the years ended December 31, 1995, 1994, and 1993, respectively.
In each instance, the investing activities related primarily to purchases,
sales, and trades of revenue equipment. The Company expects capital
expenditures (primarily for revenue equipment and satellite-based tracking and
communication units), net of revenue equipment sales and trade-ins, to be
approximately $13.5 million for calendar 1996 and $11.0 million in 1997. Such
projected capital expenditures will be funded with cash flow from operations,
borrowings, or operating leases. In prior years, substantially all revenue
equipment additions were financed through borrowing or leasing transactions.
See "Use of Proceeds."

Net cash used in financing activities of $205,000 for the three months ended
March 31, 1996, and $2.1 million, $7.5 million, and $4.0 million for the years
ended December 31, 1995, 1994, and 1993, respectively, consisted primarily of
net payments of $1.3 million, $1.7 million, $3.9 million, and $3.4 million of
principal under the Company's long-term debt agreements and net borrowings
(payments) of $1.4 million, $0, ($3.3 million), and ($.2 million) under the
Company's line of credit.

The maximum amount available under the Company's primary line of credit at
March 31, 1996, was $5.75 million, on which the Company had drawn $1.4
million. The interest rate on the line of credit is .5% above the bank's prime
rate. The line of credit is collateralized by accounts receivable and
inventory. At March 31, 1996, the Company had outstanding long-term debt
(including current maturities) consisting of approximately $26.6 million, most
of which was comprised of obligations for the purchase of revenue equipment.
Interest rates on this debt range from 5.3% to 12.75%, and the principal
amounts mature at various dates through December 2006.

The Company intends to apply its net proceeds of this offering to reduce
long-term debt, including current maturities, to 48.6% of its total
capitalization immediately following this offering. At March 31, 1996, and
December 31, 1993, the Company experienced working capital deficits, which are
common to many truckload carriers that expand by borrowing to finance revenue
equipment purchases ($416,000 and $2.2 million, respectively). At year-end
1994 and 1995, the Company had positive working capital of $371,000 and $2.5
million, respectively. Management believes that the Company's working capital
deficits have had little impact upon liquidity. Management believes that
available borrowings under the line of credit, future revenue equipment
borrowings or leases, and cash flow generated from operations will meet its
working capital requirements, anticipated capital expenditures, and
obligations under operating leases at least through 1997.

INFLATION

Most of the Company's operating expenses are inflation-sensitive, with
inflation generally producing increased costs of operation. Inflation has had
a minimal effect upon the Company's profitability in recent years. The Company
expects that inflation will affect its costs no more than it affects those of
other truckload carriers.

SEASONALITY

In the trucking industry, results of operations show a seasonal pattern
because customers generally reduce shipments during the winter season, and the
Company experiences some seasonality due to the open, flatbed nature of the
majority of its trailers. The Company at times has experienced delays in
meeting its shipment schedules as a result of severe weather conditions,
particularly during the winter months. In addition, the Company's operating
expenses historically have been higher in the winter months due to decreased
fuel efficiency and increased maintenance costs in colder weather.

ACCOUNTING CHANGES

Effective January 1, 1993, the Company changed its method of accounting for
income taxes to conform to the provisions of Statement of Financial Standards
No. 109, "Accounting for Income Taxes." In accordance with Statement of
Financial Standards No. 109, the Company accounted for the effect of initially
applying this statement, as of January 1, 1993, as a cumulative effect and
therefore 1993 net earnings were reduced by $86,000.

21
<PAGE>

INDUSTRY OVERVIEW

Smithway competes in the truckload segment of the trucking industry, which
involves transporting full trailer loads of freight from origin to destination
without intermediate handling. The truckload segment is fragmented and highly
competitive, with several thousand carriers competing for an estimated $50
billion of annual revenue of "for-hire" freight and the potential to capture
another $90 billion from the private fleet market, in which shippers transport
their own goods. The ten largest for-hire truckload carriers accounted for
less than 15% of total for-hire truckload revenues in 1994, the latest year
for which such information is available.

Distinct shipper needs have caused a variety of specialized market segments
to develop within the truckload industry based upon equipment type, length of
haul, geographic region, and service standards. Smithway competes in the
service-sensitive flatbed and dry van segments, offering time-sensitive,
dedicated, and other premium services to shippers in its traffic lanes. More
than 70% of the truckload industry's revenue is generated in the 500-mile or
less short-haul market, and the Company's 563-mile average length of haul
places it in the short-to-medium haul classification.

The estimated $4.2 billion (1994 revenues) flatbed segment of the truckload
industry focuses upon hauling long or bulky materials not easily handled by
traditional, dry van carriers. Flatbed carriers typically obtain higher rates
per loaded mile but experience higher empty mile percentages. Flatbed carriers
must train drivers to cover loads with tarpaulins, secure them with chains,
and inspect them for further securing after an interval of transport and load
settling. These additional services are offset by eliminating driver
responsibility for loading and unloading. Compared with the dry van segment,
the flatbed market is characterized by more localized marketing and sales
efforts, fragmentation among smaller carriers operating older equipment over
relatively short routes, and lower trailer to tractor ratios.

To meet the industry's chronic driver shortage, carriers have attempted to
reduce driver turnover and attract drivers from other carriers by: raising
their compensation; operating comfortable, late-model equipment; equipping
tractors for satellite communications; avoiding freight that requires delays
or layovers; and scheduling frequent stops at home. Some truckload carriers
utilize independent contractors, who own tractors, and sometimes trailers, and
contract with the carrier to provide service for a fixed term. Independent
contractors typically have a lower turnover rate than Company drivers, and
they reduce a carrier's capital expenditures and financing costs.

In addition to increased emphasis upon drivers, several trends that affect
both shippers and carriers are reshaping the truckload industry. Many shippers
are outsourcing functions, including transportation, that outside specialists
can more efficiently perform, and delegating distribution control to logistics
management companies, such as Smithway's STB subsidiary. A recent study
estimated that trucking companies provide service at 25% lower cost than
private fleets. Also, major shippers are reducing the number of their carriers
from hundreds or dozens to a relatively few "core carriers" with whom they
have service-based, continuing relationships. Technological innovations have
lowered fuel and maintenance expense, improved communication, and enhanced
productivity for those carriers making the required capital expenditures.
These trends favor larger, better capitalized carriers that are able to
purchase newer equipment and invest in the latest communications technologies.

The trends toward shipper reliance upon fewer carriers and industry
consolidation began in the dry van segment of the industry. Management
believes the flatbed sector is beginning to undergo a similar experience
because, like the van business, many flatbed shippers are restricting the
number of carriers to those capable of providing reliable service on time-
sensitive schedules, whose ability to attract and retain drivers will assure
dependable and safe operating records. Management believes its improving
operations and relatively low debt-to-total capitalization ratio after this
offering will position it to benefit from industry trends.

22
<PAGE>

BUSINESS

THE COMPANY

Smithway is a short-to-medium length of haul truckload carrier of
diversified freight, with a primary focus upon the flatbed market. The Company
operates nationwide and in eight Canadian provinces through its Fort Dodge,
Iowa, headquarters and a network of 21 regional facilities that are
strategically located to enhance traffic balance and customer service. The
Company's primary traffic lanes are between points located predominantly
between the Rocky Mountains in the West and the Appalachian Mountains in the
East. Smithway operates primarily flatbed trailers, which include traditional
flatbeds, as well as dropdeck and lightweight aluminum models to carry freight
for certain customers on largely "dedicated" routes. The Company also operates
a van division that had grown to 218 trailers (approximately 126 tractors) at
March 31, 1996. Approximately thirteen percent of the van division's service
is for dedicated routes, and management intends to expand its van division
primarily through additional dedicated service.

Smithway transports a broad array of products, including commercial air
conditioning units, irrigation systems, locomotive engines and components,
manufacturing and container steel, oversized tires, and packaged foodstuffs,
as well as wallboard, roofing materials, lumber, and structural steel used
primarily in commercial and residential remodeling and new construction.
Through its brokerage and logistics subsidiary, Smithway controls all or a
portion of the distribution of outbound freight from a number of shipper
facilities, handling much of the volume with Smithway equipment and brokering
shipments moving in traffic lanes for which other carriers have equipment more
readily available. By offering broad transportation service and targeting
time-sensitive traffic that lessens the impact of price competition, Smithway
has become a primary service provider, or core carrier, to many of its
shippers.

Smithway operated essentially as a local cartage company until the early
1970's, when it acquired the assets and operating rights of another carrier
and began expanding its flatbed operation. From that time through the early
1980's, the Company specialized in transporting building materials and managed
growth by balancing its fleet with approximately equal numbers of Company-
owned and independent contractor tractors. William G. Smith became President
of Smithway in 1984, when the Company's revenue was $26.4 million. Mr. Smith
led the Company's effort to diversify its customer and freight base, form the
Smithway Network of locations, and grow to the size that enabled it to be
named as a core carrier by major shippers. After achieving revenue of
approximately $50 million in 1991, management focused upon profitability and
implemented systems to support sustained growth and premium service. After
establishing this growth platform, management commenced the Company's
acquisition strategy in 1995 to take advantage of economies of scale and
customer relationships offered by industry consolidation.

RECENT ACQUISITIONS

In June 1995, the Company acquired the business of Van Tassel, Inc., a
Pittsburg, Kansas-based flatbed carrier. In January 1996, the Company
purchased the business of Smith Trucking Company, a primarily dry van carrier
based in McPherson, Kansas.

STRATEGY

Smithway's objective is to accelerate the expansion of its operations to
take advantage of growth opportunities resulting from the industry trend
toward larger, better capitalized carriers, while maintaining profitability
and premium service.

The Smithway growth strategy contains six key elements:

. Market Leadership. Smithway strives for market prominence by offering a
combination of premium service, equipment availability, and broad geographic
coverage in a highly fragmented flatbed market segment characterized primarily
by smaller, less diversified, and less technologically advanced carriers.
Management

23
<PAGE>

believes the Company's service standards, as well as core carrier and
dedicated fleet relationships with major shippers, support higher rates and
prevent diversion of freight by price-competitive carriers. Management
believes the flatbed market is less developed than the dry van segment, and
that the Company's size, service standards, and financial strength have
positioned it to take advantage of predicted market consolidation.

. Diversified Freight. Smithway targets a diversified mix of freight to
increase profitability and reduce exposure to business cycles. Revenue
generated by dry van, transportation logistics, brokerage, specialized
railroad service, and dedicated route operations, together with transporting
non-construction freight such as tires, machinery, and irrigation systems,
increased to 47.5% of total revenue in 1995 from 26.1% in 1991, with revenue
from steel, building materials, and lumber transportation increasing from
$36.8 million in 1991 to $40.4 million in 1995. Smithway serves over 500
customers, and its largest customer accounted for less than 6.0% of revenue in
1995.

. Acquisitions. Smithway intends to pursue strategic acquisitions of both
flatbed and dry van carriers, focusing primarily on the flatbed sector of the
industry. Management believes that shipper trends toward core carrier
relationships, outsourcing transportation formerly provided by private fleets,
and arranging "dedicated" or "continuous movement" routes favor large, well-
capitalized carriers, because major shippers often require large fleets of
modern equipment, time-sensitive and damage-free delivery, safe and well-
trained drivers, in-transit communication and load tracking, electronic data
interchange, and adequate insurance. Many smaller, more leveraged carriers
have good customer relationships but are unable to provide these services
without significant capital investment and face higher costs as they are
unable to achieve economies of scale. Smithway has acquired the businesses of
two of such carriers since June 1995. Management believes that consolidation
in the truckload industry will accelerate in future years.

. Return on Equity. Smithway emphasizes return on equity by enhancing asset
productivity and limiting capital investment through the use of equipment
owned by independent contractors and facilities provided by commission sales
agents. Between 1991 and 1995, Smithway raised its equipment utilization
(revenue miles per tractor) 11.2%, while decreasing its empty mile percentage.
The Company's participation in the flatbed market reduces capital requirements
because flatbed operations require a lower ratio of trailers to tractors than
is required for van traffic. The Company achieved a 41.0% return on average
equity for 1995 (including both redeemable and non-redeemable Common Stock).

. Productivity Incentives. Smithway seeks to create an entrepreneurial
environment for its personnel by compensating all independent contractors,
commission sales agents, and most flatbed drivers solely on a percentage of
revenue basis, and all Company sales personnel partially through percentage of
revenue bonuses. The majority of employees also participate in profits through
the Company's contributions to its 401(k) profit-sharing plan or the ESOP's
30.9% ownership of the Company's Common Stock. Management believes that these
incentives invest its workforce with a direct personal interest in each load
and contribute to the productivity demonstrated by a ratio of 4.1 total
tractors for each non-driver employee at March 31, 1996.

. Operating Efficiencies. Smithway enhances operating efficiency through
freight-selection software, satellite-based communication, late-model revenue
equipment, and the Smithway Network. The Spectrum freight selection software
permits dispatchers to select freight based upon profitability and
compatibility with preferred routes, while the Qualcomm satellite-based
tracking and communication system permits instantaneous location of equipment
and communication with drivers. Smithway's late-model tractor fleet (with an
average age of 16 months at March 31, 1996) enhances fuel efficiency and
driver recruitment while reducing maintenance downtime. Smithway's tractor
replacement schedule is designed to insure that most repairs are made under
factory warranties. The Smithway Network of terminals, field offices, and
agents is strategically located near major customers and markets to enhance
equipment balance, driver recruitment, and localized marketing expected by the
Company's customers. Management believes these strategies have contributed to
an improvement in Smithway's operating ratio to 91.3% for the year ended
December 31, 1995, from 95.3% in 1991, and positioned the Company for future
expansion. The Company's Adjusted Operating Ratio was 88.5% for the year ended
December 31, 1995, compared with 91.9% in 1991.

24
<PAGE>

OPERATIONS

Smithway integrates its sales and dispatch functions throughout its
computer-connected "Smithway Network," which consists of the Company's
headquarters in Fort Dodge, Iowa, and 21 field offices, independent agencies,
and terminals strategically located near major shippers to provide the
consistent, local contact with shipper personnel expected by its flatbed
customers. The headquarters and 14 terminals and field offices are managed by
Smithway employees, while the 7 agencies are managed by independent commission
agents. The customer sales representatives and agents at each location have
front-line responsibility for booking freight and dispatching all trucks in
their regions, and fleet managers at the Fort Dodge, Iowa, headquarters
coordinate all load movements via computer link to optimize load selection and
promote proper fleet balance among regions. Personnel at the Company's
headquarters also handle all sales and dispatch functions for the van division
and for flatbed traffic that does not originate within a specific sales
region.

Smithway's headquarters consists of 21,000 square feet of office space and
44,800 square feet of equipment maintenance and wash facilities, located on 31
acres near Fort Dodge, Iowa. Driver recruitment activity takes place at Fort
Dodge, Iowa; Joplin, Missouri; Oklahoma City, Oklahoma; and Youngstown, Ohio,
and maintenance and repair shops are operated at Fort Dodge and Joplin. Of the
17 locations at which sales and dispatch functions are performed, 11 are
located in or near truckstops, to afford drivers and independent contractors
access to required facilities without capital investment by Smithway.

The Smithway Network consists of locations in or near the following cities:

<TABLE>
<CAPTION>
COMPANY LOCATIONS OWNERSHIP AGENT LOCATIONS
----------------- --------- ---------------
<S> <C> <C>
Chicago, Illinois............................ Owned Cedar Rapids, Iowa
Dallas, Texas................................ Leased* Cincinnati, Ohio
Denver, Colorado............................. Leased* Detroit, Michigan
Fort Dodge, Iowa............................. Owned Hennepin, Illinois
Joplin, Missouri............................. Owned Houston, Texas
Kansas City, Missouri........................ Leased* Norfolk, Nebraska
McPherson, Kansas............................ Leased Toledo, Ohio
Memphis, Tennessee........................... Leased
Montgomery, Alabama.......................... Leased
Oklahoma City, Oklahoma...................... Owned
Oshkosh, Wisconsin........................... Leased*
Philadelphia, Pennsylvania................... Leased*
St. Louis, Missouri.......................... Leased*
St. Paul, Minnesota.......................... Leased
Youngstown, Ohio............................. Leased*
</TABLE>
- --------
* Month-to-month leases.

Agents are important to the Company's operations because they are the
primary contact for shippers within their region and have regular contact with
drivers and independent contractors. The Company's agents are paid a
commission on revenue they generate, and, in 1995, agents generated
approximately 24.4% of Smithway's $77.3 million in revenue. Although agent
contracts typically are cancelable on 14 days' notice, Smithway's agents
average nearly ten years' tenure with the Company. In addition to sales and
customer service benefits, management believes agents offer the advantage of
minimizing capital investment and fixed costs, because agents are responsible
for all of their own expenses.

Customers and Marketing. Smithway markets itself as a provider of premium
service by emphasizing rapid response time to customer requests for equipment,
undamaged and on-time pickup and delivery, one of the nation's largest fleets
of flatbed equipment, safe, professional drivers, logistics management,
dedicated fleet capability, and its strategically located Smithway Network.
Management believes that few other carriers operating principally in the
Midwest flatbed market offer similar size, service, and the reliability of a
late-model fleet; consequently, the Company seeks service-sensitive freight
rather than competing primarily on the basis of price.

25
<PAGE>

Smithway's sales force includes six national sales representatives, who
focus upon national accounts and the van division, as well as personnel at 14
terminals and field offices and 7 independent commission agencies, who are
responsible for regional customer contact. Smithway's sales employees and
agents earn incentive compensation based upon a percentage of revenue
generated per load hauled within their areas of responsibility. Agents receive
a percentage of all revenue they generate, and Company customer sales
representatives receive a base salary and a revenue-based percentage bonus.

The Company's sales department seeks new and expanded relationships with
shippers who require multiple, predictable freight movements within Smithway's
primary service territory. In recent years, Smithway has targeted shippers and
products that are subject to fewer cyclical fluctuations than the freight
traditionally hauled by flatbed carriers. These efforts have contributed to a
freight mix that is more diversified than the freight transported by many
flatbed carriers, and includes aircraft aluminum, air conditioners, bathroom
accessories, electric utility poles, irrigation systems, construction
materials, structural steel, appliances, non-hazardous agricultural products,
and pet food. This diversified freight is complemented by a customer profile
that includes both large and small accounts. In 1995, the Company's top 50,
25, 10, and 5 customers accounted for 64.0%, 52.6%, 37.4%, and 23.1% of
revenue, respectively, with more than 450 customers accounting for the
remaining 36.0% of revenue. The Company's top ten customers by revenue during
1995 were York International, National Gypsum, LTV Steel, Tamko Roofing
Products, Celotex, General Electric, U.S. Steel, Goodyear, Nestle, and
Universal-Rundle. No single customer accounted for more than 6.0% of
Smithway's revenue during 1995.

Technology. Smithway uses proven technology to enhance its operating
efficiency and provide the customer service expected of a core carrier. In
July 1993, the Company initiated the use of the Spectrum freight selection
software that permits dispatchers to improve freight selection and increase
revenue per operated mile by ranking each potential load based upon rate per
loaded mile, empty mile exposure, and history of obtaining a profitable return
load from the proposed destination. Management believes the use of Spectrum
has contributed to the Company's 4.25% increase in revenue per operated mile
between 1993 and 1995.

Smithway has installed Qualcomm satellite-based tracking and communication
units in 100% of its Company-owned tractors and has offered rental of these
units as an option to its independent contractors. Management believes on-
board communication facilitates dispatch, while reducing empty miles and
increasing equipment utilization. The system also enables the Company to
advise customers of the location of freight in transit through its hourly
position reports of each tractor's location.

Smithway also offers its customers Electronic Data Interchange ("EDI")
communications technology. EDI allows customers to communicate directly with
the Company via computer link and, with the aid of satellite communication,
obtain location updates of in-transit freight, expected delivery times, and
account payment instructions. In addition, Smithway gains efficiency from the
Rand McNally Milemaker(TM) software, which permits standardized mileage and
rate quotations for all freight movements.

DRIVERS, INDEPENDENT CONTRACTORS, AND OTHER PERSONNEL

Smithway seeks drivers and independent contractors who safely manage their
equipment and treat freight transportation as a business. The Company
compensates all of its independent contractors and most drivers in the flatbed
division by paying a percentage of revenue per load hauled rather than on a
mileage basis, thus aligning the drivers' and the Company's interests. Drivers
in the van and heavy load divisions are compensated by the mile. All Company
drivers share in Smithway's profitability through the ESOP and 401(k) Plans,
subject to eligibility requirements.

The Company historically has operated a fleet comprised of substantial
numbers of both Company-owned and independent contractor tractors. Management
believes a mixed fleet offers competitive advantages because the Company is
able to recruit from both personnel pools to facilitate fleet expansion. The
Company intends to retain a mixed fleet in the future to insure that its
recruiting efforts toward either group are not damaged by becoming categorized
as predominantly either a Company-owned or independent contractor fleet,
although acquisitions or other factors may cause fluctuations in the fleet mix
from time to time.

26
<PAGE>

Smithway's independent contractors own their tractors and more than 90% also
provide a trailer. As owners, they are responsible for all associated
expenses, including financing costs, fuel, maintenance, licenses, physical
damage insurance, taxes, and workers' compensation. Independent contractors
contract with the Company to provide transportation service for a period of
time, and the contracts are terminable by either party on short notice.
Smithway establishes safety, experience, and other guidelines for its
independent contractors in accordance with DOT regulations. By using
independent contractors as well as Company-owned tractors to expand its fleet,
Smithway's management believes the Company will reduce its capital investment
and fixed costs, improve its return on equity, and retain flexibility in
meeting fluctuating shipper demand. Management also believes that equipment
ownership motivates its independent contractors to operate safely.

Smithway has implemented several policies to promote driver and independent
contractor satisfaction: maintaining an open-door policy with easy access to
senior executives; appointing an advisory board comprised of top drivers and
independent contractors, which consults quarterly with management on matters
such as compensation, recruiting, training, safety, and job satisfaction; and
assigning each driver and independent contractor to a particular dispatcher to
insure personal contact. In addition, the Company utilizes conventional
(engine-forward) tractors, which are more comfortable for the driver, and
operates over relatively short distances (563-mile average length of haul in
1995), to return drivers home as frequently as possible. These factors
contributed to 77% turnover of drivers (measured from the date they were
assigned a vehicle) and 18% turnover of independent contractors in 1995. In
addition, 40% of new drivers and independent contractors in 1995 were referred
by existing Smithway drivers and independent contractors. Smithway drivers and
independent contractors have an average tenure of 3.5 years, and at December
31, 1995, more than 67% of the Company's drivers and independent contractors
have more than one year's experience with the Company. Management believes
experienced drivers and independent contractors provide a competitive
advantage in the flatbed market because of the requirement that all loads be
properly secured, covered, and inspected.

Smithway is not a party to a collective bargaining agreement and its
employees have never attempted to organize a union. At December 31, 1995, the
Company had 339 Company drivers, 157 non-driver employees, and 303 independent
contractors. The Company believes it has good relationships with its employees
and independent contractors.

SAFETY AND INSURANCE

Smithway's active safety and loss prevention program has resulted in a
"satisfactory" safety and fitness rating from the DOT (the highest rating) and
numerous driving awards. Management takes great pride in Smithway's reputation
for safety, which is evidenced by the following awards from the Interstate
Truckload Carriers Conference (ITCC) of the American Trucking Associations:

1995 ITCC First Place Carrier--50-99 million miles
1994 ITCC Second Place Carrier--50-99 million miles
1994 ITCC Top Five Grand Champion Company Driver
1994 ITCC Top Twelve Owner-Operator
1993 ITCC First Place Carrier--50-99 million miles
1993 ITCC Grand Champion Company Driver
1992 ITCC First Place Carrier--25-49 million miles
1992 ITCC Grand Champion Owner-Operator

All of the Company's drivers and independent contractors are pre-screened
for driving violations and must attend the Company's three-day orientation
sessions. Drivers without substantial over-the-road experience are assigned to
drive with experienced Smithway trainers for six weeks. Management also
believes the use of independent contractors contributes to safety, because
they have made significant investments in their equipment.

The Company continuously reinforces safety and DOT compliance through
newsletters, safety review sessions, and driving contests. Each year at its
awards banquet, the Company recognizes drivers and independent

27
<PAGE>

contractors under its safety bonus program. In 1995, Smithway awarded more
than $276,000 in bonuses to 279 drivers and 277 independent contractors.
Approximately 94% of the Company's combined driver and independent contractor
pool accumulated sufficient points to qualify for a 1995 award, based upon
their revenue produced, safety record, compliance with DOT regulations, and
other factors.

The Company's policy is to review 100% of its driver logs and inspection
reports for compliance with DOT hours-in-service regulations and to contact
drivers concerning any violation of DOT guidelines. The DOT reviews the number
of reportable and preventable accidents experienced by a carrier when
assigning a safety rating. In each of the past five years, the Company has
experienced less than one such accident per 5 million miles driven, and
Smithway's safety record and claims experience have contributed to reduced
insurance and claims expense as a percentage of revenue, which has improved to
2.4% of revenue in 1995 from 4.0% in 1992.

The Company maintains insurance covering losses in excess of a $50,000 self-
insured retention for cargo loss, personal injury, property damage, and
physical damage claims, and a $100,000 retention for workers' compensation
claims. Its primary insurance policy has a limit of $2.0 million per
occurrence, and the Company carries excess liability coverage, which
management believes is adequate to cover exposure to claims exceeding its
retention limits.

REVENUE EQUIPMENT

Smithway's equipment strategy is to operate late-model tractors to improve
fuel mileage and reduce maintenance expense; trade or dispose of its tractors
prior to the expiration of major component warranties to minimize repair
expense; select comfortable, conventional tractors preferred by most drivers;
and maintain a fleet comprised of both Company-owned and independent
contractor tractors to reduce capital expenditures and provide maximum
flexibility in meeting fluctuating shipper demands. The Company operates
predominantly Peterbilt and Kenworth tractors equipped with Cummins electronic
engines. At March 31, 1996, the Company owned or leased under operating leases
403 tractors with an average age of 16 months. Scheduled deliveries and trades
in 1996 would result in 426 Company-owned tractors at year-end. The Company
operated 317 tractors provided by independent contractors. Smithway operates
1,175 trailers, including trailers provided by independent contractors. Most
of the Company's trailers are equipped with air-ride suspensions. The
Company's practice is to trade or dispose of its tractors on a four-year cycle
and its trailers on a seven-year cycle. Management believes that the Company's
late-model fleet helps it maintain its status as a core carrier and
distinguishes it from carriers that operate older equipment.

At March 31, 1996, the Company owned (or leased under operating leases) the
following revenue equipment:

<TABLE>
<CAPTION>
FLATBEDS
-----------
DROP LEVEL
MODEL YEAR TRACTORS DECKS DECK VANS
---------- -------- ----- ----- ----
<S> <C> <C> <C> <C>
1996............................................ 186 25 36 59
1995............................................ 104 -- 117 31
1994............................................ 92 -- 66 54
1993............................................ 13 -- 37 5
1992............................................ 8 -- 14 36
1991............................................ 0 24 61 21
Pre-1991........................................ 0 1 281 12
--- --- --- ---
Totals...................................... 403 50 612 218
</TABLE>

Smithway orders standard engine and drivetrain components for its tractors,
and brakes and tires for its trailers, in order to minimize its inventory of
spare parts. All equipment is subject to the Company's regular maintenance
program, and is also inspected and maintained each time it passes through a
Smithway maintenance facility.

28
<PAGE>

COMPETITION

The truckload segment of the trucking industry is highly competitive and
fragmented, and no carrier or group of carriers dominates the flatbed or van
market. Smithway competes primarily with other regional, short-to-medium-haul
carriers and private truck fleets used by shippers to transport their own
products in proprietary equipment. The Company competes to a limited extent
with rail and rail-truck intermodal service, but attempts to limit this
competition by seeking service-sensitive freight, maintaining a short-to-
medium length of haul (563-mile average) and emphasizing destinations not
conveniently or expeditiously served by rail. Although management believes the
957 flatbed trailers it operated at March 31, 1996, rank its flatbed division
among the ten largest such fleets in that industry segment, there are other
trucking companies, including diversified carriers with large flatbed fleets,
that possess substantially greater financial resources and operate more
equipment than Smithway.

FUEL AVAILABILITY AND COST

Consistent with its corporate emphasis on minimizing costs and striving for
increased operating efficiency, the Company actively manages its fuel costs.
Company drivers purchase virtually all of the Company's fuel through service
centers with which Smithway has volume purchasing arrangements, and the
Company periodically enters into futures contracts on heating oil, which is
derived from the same petroleum products as diesel fuel, in an effort to
partially hedge increases in fuel prices.

The Company historically has recovered most increases in fuel prices and
taxes by passing the costs through to customers in the form of higher rates,
although short-term price increases may not be recovered. Most of the
Company's shipping contracts contain clauses permitting fuel surcharges. In
response to increases in fuel prices in 1996, the Company has implemented
surcharges with many major customers. See "Risk Factors--Business Cycles and
Industrywide Cost Increases."

REGULATION

Historically, the ICC and various state agencies regulated motor carriers'
operating rights, accounting systems, mergers and acquisitions, periodic
financial reporting, and other matters. In 1995, federal legislation preempted
state regulation of prices, routes, and services of motor carriers and
eliminated the ICC. Several ICC functions were transferred to the DOT, but the
lack of implementing regulations prevents the Company from determining the
full impact of this action. Management does not believe that regulation by the
DOT or by the states in their remaining areas of authority will have a
material effect on the Company's operations. The Company's drivers and
independent contractors must comply with the safety and fitness regulations
promulgated by the DOT, including those relating to drug and alcohol testing
and hours of service.

The Company's operations are subject to various federal, state, and local
environmental laws and regulations, implemented principally by the EPA and
similar state regulatory agencies, governing the management of hazardous
wastes, other discharge of pollutants into the air and surface and underground
waters, and the disposal of certain substances. Smithway does not have
underground fuel storage tanks at any of its properties, and the above-ground
fuel tank at Fort Dodge, installed in 1990, is the only fueling site at a
Company location. Management believes that its operations are in material
compliance with current laws and regulations. See "Risk Factors--Government
Regulation" and "Environmental Hazards" and "Business--Operations."

LEGAL PROCEEDINGS

The Company from time to time is a party to litigation arising in the
ordinary course of its business, substantially all of which involves claims
for personal injury and property damage incurred in the transportation of
freight. The Company is not aware of any claims or threatened claims that
might have a materially adverse effect upon its operations or financial
position.

29
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS, AND DIRECTOR NOMINEES

The Company's executive officers, directors, and director nominees are:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
<C> <C> <S>
Chairman of the Board, President, and Chief
William G. Smith....... 56 Executive Officer
Executive Vice President and Chief Financial
G. Larry Owens......... 58 Officer, Director Nominee
Martin D. Smith........ 47 Director of Operations
Michael E. Oleson...... 45 Treasurer and Chief Accounting Officer
Daniel S. O'Brion...... 36 Director of Sales and Marketing
Herbert D. Ihle........ 56 Director Nominee
Robert E. Rich......... 64 Director Nominee
Terry G. Christenberry. 49 Director Nominee
</TABLE>

All directors are elected at the annual meeting of stockholders and hold
office until their successors are elected and qualified. The executive
officers are appointed by the Company's Board of Directors and serve at the
Board's discretion.

William G. Smith has been employed by the Company since 1958, served as
President since 1984, and as Chairman of the Board and Chief Executive Officer
since January 1995. Prior to 1984, Mr. Smith served in various other executive
management capacities. Mr. Smith is a past Chairman of the Iowa Motor Truck
Association and currently serves on its executive committee. In addition, Mr.
Smith serves on the Board of Regents of Waldorf College in Forest City, Iowa.

G. Larry Owens has served as Executive Vice President and Chief Financial
Officer since joining Smithway in January 1993. Prior to joining Smithway, Mr.
Owens spent twenty-five years in the banking industry, most recently from 1982
through 1992 as President of Boatmen's Bancshares' regional banks in Spencer
and Fort Dodge, Iowa.

Martin D. Smith has served as Smithway's Director of Operations since 1989
and as Director of Administration from 1977 to 1989. Martin D. Smith is
unrelated to William G. Smith.

Michael E. Oleson has served as Smithway's Controller since joining the
Company in 1980 and in January 1995 was named Treasurer and Chief Accounting
Officer. Prior to joining Smithway, Mr. Oleson was employed as an accountant
with Mallinger Truck Line, Inc., in Fort Dodge, Iowa, from 1974 to 1980.

Daniel S. O'Brion has been Director of Sales and Marketing for Smithway
since 1990 and served as a sales representative prior to 1990.

Herbert D. Ihle has been President and owner of Diversified Financial
Services, a Minneapolis, Minnesota, management and financial services
consulting firm, since 1989. From 1990 to 1992, Mr. Ihle served as Senior Vice
President--Finance and Controller for Northwest Airlines, and from 1963 to
1989 served in various positions, including Executive Vice President--Finance,
for Pillsbury Co. Mr. Ihle is also a director of Lutheran Brotherhood
Insurance Company and serves as Chairman of the Board of Regents of Waldorf
College in Forest City, Iowa.

Robert E. Rich is a private investor and has been involved in the management
of several privately owned farming and manufacturing companies since 1978.
From 1967 through 1978, Mr. Rich served as Executive Vice President and
Treasurer and a member of the Board of Directors of Iowa Southern Utilities.
Mr. Rich is a certified public accountant. Mr. Rich also serves as a director
of AmerUs Group and AmerUs Bank, Des Moines, Iowa, and Trinity Health Systems.

30
<PAGE>

Terry G. Christenberry has been the President and a director of
Christenberry, Collet & Company, Inc., an investment banking firm located in
Kansas City, Missouri, since its incorporation in June 1994. From September
1986 to June 1994, Mr. Christenberry was Executive Vice President and a
director of H.B. Oppenheimer & Company, Inc., also an investment banking firm
located in Kansas City, Missouri. Mr. Christenberry also serves as a director
of OTR Express, Inc., a nationwide truckload carrier with common stock traded
on the Nasdaq National Market.

The individuals listed as Director Nominees have consented to become
directors of the Company effective upon the closing of this offering.

COMMITTEES

Following completion of this offering, the Board of Directors intends to
establish Audit and Compensation Committees comprised initially of Messrs.
Ihle, Rich, and Christenberry. The Audit Committee will have responsibility
for reviewing audit plans and discussing audit work, internal controls, and
related matters with the Company's independent auditors, reviewing the audit
report and any accompanying recommendations, and nominating independent
auditors to perform the annual audit. The Compensation Committee will have
responsibility for reviewing the compensation of the Company's executive
officers, making recommendations to the Board of Directors, and administering
the Company's Incentive Stock Plan. See "Management--Incentive Stock Plan."

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued by the
Company for services rendered in all capacities by the Company's Chief
Executive Officer, the only executive officer of the Company whose total cash
compensation exceeded $100,000 for services rendered during the fiscal year
ended December 31, 1995.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------
NAME AND PRINCIPAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY(1) BONUS COMPENSATION(2) COMPENSATION
------------------ ---- --------- ----- --------------- ------------
<S> <C> <C> <C> <C> <C>
William G. Smith
President and Chief
Executive Officer.......... 1995 $300,000 -- $1,617 --
</TABLE>
- --------
(1) Effective February 1995, Mr. Smith's salary was increased to $300,000
annually.
(2) Represents the value of Company-furnished automobile.

INCENTIVE STOCK PLAN

In March 1995, the Company's Board of Directors and stockholders adopted an
incentive stock plan (the "Incentive Stock Plan") designed to attract and
retain key employees and motivate such employees through incentives that are
aligned with the Company's goals of increased profitability and stockholder
value. The Incentive Stock Plan is intended to afford the Company wide
discretion in making awards. Awards under the Incentive Stock Plan will be
made by the Compensation Committee of the Board of Directors, which is
comprised solely of "disinterested directors" as such term is used in Rule
16b-3(c) of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended. Awards may be in the form of incentive stock options,
non-qualified stock options, restricted stock awards, or any other awards of
stock consistent with the Incentive Stock Plan's purpose.

The Compensation Committee may amend the Incentive Stock Plan but may not,
without the prior approval of the stockholders, amend the plan to extend the
period during which the options or awards may be granted or

31
<PAGE>

exercised, extend the term of the Incentive Stock Plan, or increase the total
number of reserved shares. The Committee may substitute new stock options for
previously granted options. No awards of incentive stock options may be made
after December 31, 2004.

The Company has reserved 225,000 shares of Class A Common Stock for issuance
pursuant to the Incentive Stock Plan, and to date has awarded options covering
85,000 of such shares to eight of its executive officers and other key
employees at an exercise price of $9.50 per share. The first 20% of such
options vested and became exercisable January 1, 1996, and an additional 20%
will become vested and exercisable on January 1 of each succeeding year
through 2000. Options or awards that expire unexercised, are forfeited, or are
settled in exchange for tax withholding or in payment of the exercise price of
other options, become available again for issuance under the Incentive Stock
Plan. The Compensation Committee may determine when and in what amounts future
awards vest and options become exercisable. Terms of awards need not be the
same for all participants. The price payable upon exercise of an option may be
satisfied in cash or, in the Committee's discretion, with exercisable but
unexercised options or previously acquired shares of the Company's Class A
Common Stock.

EMPLOYEE STOCK OWNERSHIP PLAN AND 401(K) PLAN

The Company established its Employee Stock Ownership Plan and Trust ("ESOP")
in 1986 to purchase the shares of Common Stock then owned by Harold C. Smith.
Employees age 21 or older are eligible to participate after one year of
service with the Company. A majority of Smithway's employees are vested owners
of Class A Common Stock through the ESOP, which holds 30.9% of the Company's
capital stock.

The Smiths' vested shares comprise 3.4% of the vested shares held by the
ESOP, and all vested shares allocated to executive officers as a group
comprise 6.7%. After this offering, participants will be entitled to direct
the voting of all shares allocated to their accounts, and the ESOP trustee
will vote only unallocated shares and shares for which no direction is
received. At March 31, 1996, a total of 888,834 of the 1,080,677 shares held
by the ESOP were allocated to participant accounts. All of the shares held by
the ESOP will become allocated upon retirement of the ESOP-related debt.

Effective April 22, 1996, Jerome F. Sherman, Ph.D., was appointed sole
trustee of the ESOP. In such capacity, Dr. Sherman has determined that the
ESOP will participate in this offering as described in this Prospectus. Dr.
Sherman is an associate professor of finance at Creighton University and has
consulted on matters involving corporate valuations and ESOPs for over 20
years. Dr. Sherman has provided the annual valuation of the Company's Common
Stock for the ESOP since 1987 at an annual fee of $1,500.

Management believes that allowing the ESOP to sell a portion of its Smithway
stock in this offering will cause the employees to recognize the benefit of
public stock ownership and demonstrate to them the value of their remaining
equity position. The ESOP will offer approximately 472,785 allocated and
27,215 unallocated shares in this offering, with the net proceeds of
unallocated shares being used to retire the ESOP-related debt and certain
administrative costs and the net proceeds of allocated shares being
distributed pro rata among participants' accounts. See "Principal and Selling
Stockholders."

In 1992, the Company adopted a defined contribution plan (the "401(k)
Plan"), which is intended to satisfy the tax qualification requirements of
sections of the Internal Revenue Code of 1986, as amended (the "Code"). All
Company personnel age 21 or older are eligible to participate in the 401(k)
Plan after one year of service with the Company. The 401(k) Plan permits
participants to contribute up to 15% of their annual compensation from the
Company, subject to the limit imposed by the Code. All amounts deferred under
the 401(k) Plan by a participant fully vest immediately. The 401(k) Plan also
permits discretionary contributions by the Company, which contributed $64,000
in 1995, $50,000 in 1994, and $50,000 in 1993, its first three years of
contribution.

32
<PAGE>

The Company has no long-term incentive plans, as that term is defined in
Securities and Exchange Commission regulations, other than the Incentive Stock
Plan. The Company has no defined benefit or actuarial plans.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Following the completion of this offering, the Company intends to establish
a Compensation Committee of the Board of Directors, comprised initially of
Messrs. Ihle, Rich, and Christenberry. Prior to this offering, Mr. Smith made
all decisions concerning executive officer compensation. No member of the
proposed Compensation Committee serves as a member of another company's
compensation committee. See "Certain Transactions" for a discussion of certain
transactions between the Company and certain members (or designees) of the
Board of Directors.

DIRECTORS' COMPENSATION

Under the Company's Outside Director Stock Plan, each director who is not an
employee of the Company will receive an annual option to purchase 1,000 shares
of the Company's Class A Common Stock at 85% of the market price on the last
day of the month immediately preceding the option grant, except for 1996, in
which the exercise price will be 85% of the initial public offering price. The
Company has reserved 25,000 shares of Class A Common Stock for issuance under
the Outside Director Stock Plan. In addition, each non-employee director will
receive $1,000 for each meeting of the Board of Directors or committee of the
Board of Directors attended by such director (if such committee meeting is
held other than on the day of a Board meeting), plus reimbursement of expenses
incurred in attending such meetings.

33
<PAGE>

CERTAIN TRANSACTIONS

In 1995, Smithway-Nevada was capitalized as a holding company to own all of
the issued and outstanding capital stock of Smithway-Iowa and acquire the
stock or net assets of certain related entities. Smithway-Nevada issued
3,513,697 shares of Common Stock in the transaction, which was intended to
qualify as a tax-free transfer to a controlled corporation under Section 351
of the Internal Revenue Code. For additional information, see "Acquisition of
Related Companies and Holding Company Formation."

During 1995, 1994, and 1993, Smith Leasing and Wilmar leased tractors and
trailers to the Company. The Company paid rent of approximately $57,000 for
January 1995, $879,000 in 1994, and $1,092,000 in 1993, for such revenue
equipment. Effective January 31, 1995, the Company acquired all of such
revenue equipment. See "Acquisition of Related Companies and Holding Company
Formation." Such payments were eliminated in the Company's Consolidated
Financial Statements because the acquisitions of Smith Leasing and Wilmar were
accounted for in a manner similar to a pooling of interests.

During 1995, 1994, and 1993, the Company transported freight brokered by
STB, which was wholly owned by Mr. Smith prior to January 31, 1995. STB paid
the Company approximately $44,000 during January 1995, $495,000 in 1994, and
$312,000 in 1993 for such freight transportation services. Effective January
31, 1995, the Company acquired STB. See "Acquisition of Related Companies and
Holding Company Formation." Such payments were eliminated in the Company's
Consolidated Financial Statements because the acquisition of STB was accounted
for in a manner similar to a pooling of interests.

The Company acquired the assets and assumed the liabilities of Smithway
Driver Leasing, Inc. ("SDL"), a related entity owned by Mr. Smith and three
other executive officers, effective January 1, 1993. SDL had provided drivers
and associated personnel services to Smithway prior to 1993. The amount of
liabilities assumed exceeded assets acquired by $24,000.

The Company formerly leased its Oklahoma City terminal from William G.
Smith, and paid rent of approximately $5,000 for the period January 1 through
March 31, 1993. The Company acquired the Oklahoma City property from Mr. Smith
in March 1993 for $164,000, the same amount paid for the property by Mr.
Smith.

From time to time, Mr. Smith has personally guaranteed obligations for
revenue equipment, including $8.1 million of secured debt at March 31, 1996.
It is anticipated that Mr. Smith will not guarantee future obligations.

At March 31, 1996, William G. Smith owed the Company $22,000 and Mr. Smith's
father, Harold C. Smith, owed the Company $44,000. Neither of such amounts
bears interest. The Smiths intend to retire these amounts contemporaneously
with the closing of this offering.

Terry G. Christenberry, an executive officer of Christenberry, Collet &
Company, Inc. ("CCCO"), has been retained by the Company since November 1994
to provide various financial advisory services in connection with this
offering. Mr. Christenberry has agreed to become a director of the Company
immediately following closing of this offering. The Company paid CCCO
approximately $60,000 in financial consulting fees during 1995. It is
estimated that the Company will pay CCCO approximately $30,000 in such fees in
1996. CCCO also will receive from the Company a fee of 1% of the total
offering proceeds ($183,000). CCCO had not performed services for the Company
prior to 1994.

Smithway has adopted a policy that any future transactions with affiliated
persons or entities will be on terms no less favorable to the Company than
those that could have been obtained on an arms-length basis from unaffiliated
third parties, and that any such transactions must be approved by a majority
of the disinterested directors.

34
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of Class A and Class B Common Stock as of March 31, 1996, and as
adjusted to reflect the sale of the shares of Class A Common Stock offered
hereby, by each person known by the Company to beneficially own more than 5%
of the outstanding shares of Common Stock; each of the Company's directors and
director nominees; each of the executive officers identified in the Summary
Compensation Table; each Selling Stockholder; and all directors and executive
officers as a group. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially
owned. The Company has five stockholders at the date of this Prospectus.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THIS OFFERING AFTER THIS OFFERING
--------------------------- ------------------------------
CLASS A CLASS B CLASS A CLASS B
COMMON COMMON SHARES COMMON COMMON
NAME STOCK STOCK PERCENT OFFERED STOCK STOCK PERCENT(1)
---- --------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
William G. and Marlys L.
Smith(2)............... 1,294,720 1,000,000 65.6% 150,000(3) 1,132,909 1,000,000 42.7%
ESOP(4)................. 1,080,677 -- 30.9% 500,000 580,677 -- 11.6%
G. Larry Owens(5)....... 150,437 -- 4.3% -- 149,259 -- 3.0%
Herbert D. Ihle......... -- -- -- -- -- -- --
Robert E. Rich.......... -- -- -- -- -- -- --
Terry G. Christenberry.. -- -- -- -- -- -- --
All directors and
executive officers
as a group (5
persons)(6)............ 1,470,447 1,000,000 70.6% -- 1,295,808 1,000,000 45.9%
</TABLE>
- --------
(1) Percentage based on both Class A and Class B Common Stock.

(2) The Smiths' beneficial ownership before and after this offering includes
25,640 shares of Class A Common Stock allocated to the Smiths' ESOP
accounts prior to this offering, of which 25,409 shares are vested, and
13,829 shares of Class A Common Stock allocated to the Smiths' ESOP
accounts after the sale of shares by the ESOP in this offering, of which
13,598 are vested (assuming that vested shares are sold first and that the
allocated shares sold by the ESOP are withdrawn pro rata from
participants' accounts), and 190,000 shares held in the name of Melissa
Osterberg as voting trustee for the benefit of the Smith Family Limited
Partnership. If the Underwriters' over-allotment option is exercised in
full, the Smiths will sell an additional 122,500 shares of Class A Common
Stock, which will result in the Smiths owning 38.7% of the outstanding
Common Stock after this offering. The Smiths' business address is Rural
Route 5, Fort Dodge, Iowa 50501.
(3) Excluding 11,811 shares offered by the ESOP and allocated to the Smiths'
accounts.

(4) Includes 53,488 shares of Class A Common Stock before this offering and
28,849 shares after this offering allocated to the accounts of the Smiths,
Mr. Owens, and other executive officers and reported as beneficially owned
by such persons herein. Of the 500,000 shares of Class A Common Stock to
be sold by the ESOP in this offering, approximately 27,215 shares will be
unallocated and 472,785 shares will be shares allocated to participant's
accounts.
(5) Includes 2,558 shares of Class A Common Stock allocated to Mr. Owens' ESOP
account prior to this offering, of which 1,023 shares are vested, and
1,380 shares of Class A Common Stock allocated to Mr. Owens' account after
the sale of shares by the ESOP in this offering, of which no shares are
vested (assuming that vested shares are sold first and that the allocated
shares sold by the ESOP are withdrawn pro rata from participants'
accounts).
(6) Includes 53,488 shares of Class A Common Stock before this offering and
28,849 shares after this offering allocated to executive officers,
including the Smiths and Mr. Owens as ESOP participants. Excludes 225,000
shares of Class A Common Stock reserved for issuance under the Company's
Incentive Stock Plan, and 25,000 such shares reserved for issuance under
the Company's Outside Director Stock Plan, none of which shares has been
allocated to plan participants.

35
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue up to 20,000,000 shares of Class A Common
Stock, par value one cent ($.01) per share, 5,000,000 shares of Class B Common
Stock, par value one cent ($.01) per share, and 5,000,000 shares of preferred
stock, par value one cent ($.01) per share. At March 31, 1996, the Company had
2,499,293 shares of Class A Common Stock, 1,000,000 shares of Class B Common
Stock, and no shares of preferred stock issued and outstanding. The Class A
Common Stock was held by five stockholders of record at March 31, 1996. All
shares of Class B Common Stock are held by the Smiths. All of the outstanding
Common Stock is, and the shares of Class A Common Stock offered by the Company
hereby when issued and paid for will be, fully paid and non-assessable.

CLASS A AND CLASS B COMMON STOCK

Voting. Holders of Class A Common Stock are entitled to one vote per share.
Holders of Class B Common Stock are entitled to two votes per share. All
actions submitted to a vote of stockholders are voted on by holders of Class A
and Class B Common Stock voting together as a single class, except as
otherwise required by law. Holders of the Company's Common Stock are not
entitled to cumulative voting in the election of directors.

Conversion. Class A Common Stock has no conversion rights. Holders of Class
B Common Stock may convert their Class B Common Stock into Class A Common
Stock at any time at the ratio of one share of Class A Common Stock for each
share of Class B Common Stock. Class B Common Stock immediately and
automatically converts into an equal number of Class A Common Stock shares if
any person other than William G. Smith, Marlys L. Smith, Kelli A. Henricks,
Stacy L. Smith, Melissa S. Osterberg, Amber A. Smith, and Alexander A. Smith
(or trusts for the benefit of any of them or entities wholly owned by any of
them), obtains beneficial ownership of such shares.

Dividends. Holders of Class A Common Stock and Class B Common Stock are
entitled to receive dividends payable in cash or property other than Common
Stock on an equal basis, if and when such dividends are declared by the Board
of Directors from funds legally available, subject to any preference in favor
of outstanding shares of preferred stock, if any. In the case of any dividend
payable in Common Stock, all holders of Common Stock shall receive the same
percentage dividend, with the holders of Class A Common Stock receiving Class
A Common Stock shares and the holders of Class B Common Stock receiving Class
A or Class B Common Stock shares, as determined by the Board of Directors when
declaring such dividend.

Liquidation. In the event of liquidation, holders of Class A and Class B
Common Stock participate with each other on a ratable basis as a single class
in the net assets of the Company available for distribution after payment or
provision for liabilities of the Company and payment of the liquidation
preference, if any, on any outstanding shares of preferred stock.

Other Terms. Neither the Class A nor the Class B Common Stock may be
subdivided, consolidated, reclassified, or otherwise changed unless
contemporaneously therewith the other class of shares is subdivided,
consolidated, reclassified, or otherwise changed in the same proportion and in
the same manner. In any merger, consolidation, reorganization, or other
business combination, the consideration to be received per share by holders of
either Class A or Class B Common Stock must be identical to that received by
holders of the other class of Common Stock, except that if, after such
business combination, William G. Smith, Marlys L. Smith, Kelli A. Henricks,
Stacy L. Smith, Melissa S. Osterberg, Amber A. Smith, and Alexander A. Smith
(or trusts for the benefit of any of them or entities wholly owned by any of
them) beneficially own, in the aggregate, more than one-third of the equity
interests in the surviving entity, any securities received by them may differ
as to voting rights only to the extent that voting rights now differ between
Class A and Class B Common Stock. Holders of Common Stock are not entitled to
preemptive rights and neither the Class A Common Stock nor the Class B Common
Stock is subject to redemption.

36
<PAGE>

The rights, preferences, and privileges of holders of both classes of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which the Company may
designate and issue in the future.

PREFERRED STOCK

The Board of Directors is authorized to issue, from time to time, without
approval of the stockholders, up to 5,000,000 shares of preferred stock in one
or more series. The Board of Directors may fix for each series: the
distinctive serial designation and number of shares of the series; the voting
powers and the right, if any, to elect a director or directors (and the terms
of office of any such directors); the dividend rights, if any; the terms of
redemption, and the amount of and provisions regarding any sinking fund for
the purchase or redemption thereof; the liquidation preferences and the
amounts payable on dissolution or liquidation; the terms and conditions under
which shares of the series may or shall be converted into any other series or
class of stock or debt of the corporation; and any other terms or provisions
which the Board of Directors is legally authorized to fix or alter.

It is not possible to state the actual effect of the authorization of the
preferred stock upon the rights of holders of the Common Stock until the Board
determines the specific rights of the holders of any series of preferred
stock. Depending upon the rights granted to any series of preferred stock,
issuance thereof could adversely affect the voting power, liquidation
preference, or other rights of the holders of Common Stock or other preferred
stock. The Board's authority to issue shares of preferred stock provides a
potential vehicle for use in possible acquisitions and other corporate
purposes, but its issuance, for example in connection with a stockholder
rights plan, could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from acquiring, control of
the Company. The Company has no present plans to issue any shares of preferred
stock.

CERTAIN PROVISIONS OF ARTICLES AND BYLAWS

Provisions with Anti-Takeover Implications. Certain provisions of the
Company's Articles of Incorporation ("Articles") and Bylaws deal with matters
of corporate governance and the rights of stockholders. Under the Company's
Articles, the Board of Directors may issue shares of preferred stock and set
the voting rights, preferences, and other terms thereof, and the Class B
Common Stock possesses disproportionate voting rights. The Company's Bylaws
provide that a special meeting of stockholders may be called only by the
Chairman of the Board, the President, or a majority of the directors. Such
provisions, together with certain provisions of the Nevada General Corporation
Law (see "Description of Capital Stock--Statutory Anti-Takeover Provisions"),
could be deemed to have an anti-takeover effect and discourage takeover
attempts not first approved by the Board of Directors (including takeovers
which certain stockholders may deem to be in their best interest). Any such
discouraging effect upon takeover attempts could potentially depress the
market price of the Class A Common Stock or inhibit temporary fluctuations in
the market price of the Class A Common Stock that otherwise could result from
actual or rumored takeover attempts.

Indemnification and Limitation of Liability. Under its Articles and Bylaws,
the Company will indemnify its officers, directors, and agents against all
liabilities and expenses reasonably incurred in connection with service for or
on behalf of the Company to the full extent permitted by Nevada law. The
Company also is authorized to advance expenses, purchase insurance, and enter
into indemnification agreements and otherwise grant broader indemnification
rights. The Articles also eliminate the liability of directors and officers to
the Company or its stockholders for monetary damages for breach of fiduciary
duty except to the extent such exemption from liability or limitation thereof
is not permitted under the Nevada General Corporation Law. This provision does
not eliminate the duty of care and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Nevada law. In addition, each director continues to be subject
to liability for monetary damages for acts or omissions involving intentional
misconduct, fraud, or knowing violations of law, and for unlawful
distributions. The Company believes that these provisions of its Articles and
Bylaws are necessary to attract and retain qualified persons as directors and
officers.

37
<PAGE>

STATUTORY ANTI-TAKEOVER PROVISIONS

Nevada's "Combination with Interested Stockholders Statute" and "Control
Share Acquisition Statute" may have the effect of delaying or making it more
difficult to effect a change in control of the Company.

The Combination with Interested Stockholders Statute prevents an "interested
stockholder" and an applicable Nevada corporation from entering into a
"combination," unless certain conditions are met. A "combination" includes,
among other transactions, any merger or consolidation with an "interested
stockholder," or any sale, lease, exchange, mortgage, pledge, transfer, or
other disposition, in one transaction or a series of transactions with an
"interested stockholder" having: an aggregate market value equal to 5% or more
of the aggregate market value of the assets of a corporation; an aggregate
market value equal to 5% or more of the aggregate market value of all
outstanding shares of a corporation; or representing 10% or more of the
earning power or net income of the corporation. An "interested stockholder"
means the beneficial owner of 10% or more of the voting shares of a
corporation, or an affiliate or associate thereof. A corporation may not
engage in a "combination" within three years after the interested stockholder
acquired his shares unless the combination or purchase is approved by the
Board of Directors before the interested stockholder acquired such shares. If
this approval is not obtained, then after the expiration of the three-year
period, the business combination may be consummated by the approval of the
Board of Directors before the interested stockholder's date of acquiring
shares, or a majority of the voting power held by disinterested stockholders,
or if the consideration to be paid by the interested stockholder is at least
equal to the highest of: the highest price per share paid by the interested
stockholder within the three years immediately preceding the date of the
announcement of the combination or in the transaction in which he became an
interested stockholder, whichever is higher (as adjusted for interest and
dividends); the market value per common share on the date of announcement of
the combination or the date the interested stockholder acquired the shares,
whichever is higher (as adjusted for interest and dividends); or if higher for
the holders of shares of preferred stock, the highest liquidation value for
the shares of preferred stock.

Nevada's Control Share Acquisition Statute prohibits an acquiror, under
certain circumstances, from voting shares of a target corporation's stock
after crossing certain threshold ownership percentages, unless the acquiror
obtains the approval of the target corporation's disinterested stockholders.
The Control Share Acquisition Statute specifies three thresholds: one-fifth or
more but less than one-third, one-third but less than a majority, and a
majority or more, of the outstanding voting power. Once an acquiror crosses
one of the above thresholds in an offer or acquisition, those shares acquired
within 90 days become Control Shares (as defined in such statute) and such
Control Shares are deprived of the right to vote until disinterested
stockholders restore the right. The Control Share Acquisition Statute also
provides that in the event Control Shares are accorded full voting rights and
the acquiring person has acquired a majority or more of all voting power, all
other stockholders who do not vote in favor of authorizing voting rights to
the Control Shares are entitled to demand payment for the fair value of their
shares. The Board of Directors is to notify the stockholders as soon as
practicable after such an event has occurred that they have the right to
receive the fair value of their shares in accordance with statutory procedures
established generally for dissenter's rights. This statute is applicable only
to Nevada corporations doing business in the state and that have at least 200
stockholders, at least 100 of whom are stockholders of record and residents of
Nevada.

TRANSFER AGENT AND REGISTRAR

UMB Bank, n.a., 928 Grand Avenue, Kansas City, Missouri 64106, will be the
Transfer Agent and Registrar for the Class A Common Stock.

38
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company's directors and officers and
all other current stockholders will beneficially own 2,849,293 shares of
Common Stock, representing approximately 57.0% of the total outstanding
shares. The Company and current stockholders, who will hold an aggregate
2,847,636 shares after this offering, have agreed not to offer, sell, or
otherwise dispose of any shares of Common Stock owned (or in the case of the
Company, owned, or issuable) by them for 180 days from the commencement of
this offering without the prior written consent of Morgan Keegan & Company,
Inc. (except for required distributions from the ESOP to former participants
and any shares issued by the Company under its Incentive Stock Plan). All of
the 2,847,636 shares will become eligible for sale by the holders thereof
under Rule 144 not later than February 1997.

In general, Rule 144 provides that, subject to its provisions and other
applicable federal and state securities law requirements, any person (or
persons whose shares are aggregated), including any person who may be deemed
an "affiliate" as defined under the Securities Act, who has acquired
securities directly or indirectly from the issuer or an affiliate in a
transaction not involving a public offering ("restricted securities"), and who
has beneficially owned such restricted securities for at least two years is
entitled to sell, within any three-month period, a number of such shares that
does not exceed the greater of (i) the average weekly trading volume of the
same class of securities during the four calendar weeks preceding the filing
of notice of the sale with the Securities and Exchange Commission; or (ii) one
percent of the same class of securities then outstanding, subject to certain
manner-of-sale provisions, notice requirements, and the availability of
current information concerning the Company. A person who is not deemed an
"affiliate" of the Company and who has beneficially owned shares for at least
three years is entitled to sell such shares under Rule 144 without regard to
the volume limitations and current public information, manner of sale, and
notice requirements described above. Affiliates are subject to the volume
limitations and certain other requirements as to all shares owned by them,
regardless of the length of time such shares have been beneficially owned and
irrespective of whether such shares were acquired from the issuer or otherwise
and whether acquired in a transaction involving a public offering.

Prior to this offering, there has been no public market for the Class A
Common Stock of the Company and no determination can be made as to the effect,
if any, that the sale or availability for sale of additional shares of Common
Stock will have on the market price of the Class A Common Stock prevailing
from time to time. Nevertheless, sales of substantial amounts of the shares on
the public market could adversely affect the market price of the Class A
Common Stock and could impair the Company's ability to raise capital through
sale of its equity securities.

39
<PAGE>

UNDERWRITING

The Underwriters named below (the "Underwriters"), for whom Morgan Keegan &
Company, Inc., A.G. Edwards & Sons, Inc., and George K. Baum & Company are
acting as representatives (the "Representatives"), have severally agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company and the Selling Stockholders the aggregate number of shares
of Class A Common Stock set forth opposite their respective names below:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
<S> <C>
Morgan Keegan & Company, Inc............................. 520,000
A.G. Edwards & Sons, Inc................................. 520,000
George K. Baum & Company................................. 520,000
Alex. Brown & Sons Incorporated.......................... 150,000
Robert W. Baird & Co. Incorporated....................... 40,000
J. C. Bradford & Co...................................... 40,000
Dain Bosworth Incorporated............................... 40,000
Equitable Securities Corporation......................... 40,000
Furman Selz LLC.......................................... 40,000
Interstate/Johnson Lane Corporation...................... 40,000
Piper Jaffray Inc........................................ 40,000
Raymond James & Associates, Inc.......................... 40,000
The Robinson-Humphrey Company Inc........................ 40,000
Stephens Inc............................................. 40,000
Wheat First Butcher Singer............................... 40,000
---------
Total................................................ 2,150,000
=========
</TABLE>

The Underwriting Agreement provides that the Underwriters are obligated to
purchase all of the shares of Class A Common Stock offered hereby if any of
such shares are purchased. The Company and the Selling Stockholders have been
advised by the Representatives that the Underwriters propose to offer the
shares of Class A Common Stock to the public at the initial public offering
price set forth on the cover page of this Prospectus and to certain dealers at
such price less a concession not in excess of $0.34 per share. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of $0.10 per share to other dealers. The initial public offering price
and the concessions and discount to dealers may be changed by the
Representatives after the initial public offering.

The Company and the Smiths have granted to the Underwriters an option,
expiring on the thirtieth day subsequent to the date of this Prospectus, to
purchase up to an additional 322,500 shares of Class A Common Stock (200,000
from the Company and 122,500 from the Smiths) at the initial public offering
price, less underwriting discount, as shown on the cover page of this
Prospectus. The Underwriters may exercise such option solely for the purpose
of covering over-allotments incurred in the sale of Class A Common Stock
offered hereby. To the extent that the Underwriters exercise such option, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number of
shares of Class A Common Stock set forth next to such Underwriter's name in
the preceding table bears to the total offered. The Company and the Selling
Stockholders have agreed to indemnify the several Underwriters or to
contribute to losses arising out of certain liabilities, including liabilities
under the Securities Act.

With certain limited exceptions, the Company and all current stockholders
have agreed not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose (or announce any offer, sale, or grant of any
option to purchase or other disposition) of any shares of Class A Common
Stock, or any securities convertible into, or exercisable or exchangeable for,
shares of Class A Common Stock for a period of 180 days after the date of this
Prospectus, without the prior written consent of Morgan Keegan & Company, Inc.

40
<PAGE>

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.

Prior to this offering, there has been no public market for the Class A
Common Stock. Consequently, the initial public offering price of the Class A
Common Stock has been determined by negotiations among the Company, the
Selling Stockholders, and the Representatives. Among the factors considered in
determining the initial public offering price of the Class A Common Stock, in
addition to prevailing market conditions, were price-earnings ratios of
publicly traded companies that the Company, the Selling Stockholders, and the
Representatives believe to be comparable to the Company, estimates of the
business potential of the Company, the current state of the trucking industry,
and other factors deemed relevant.

The Company has retained Christenberry Collet & Company, Inc. to provide
various financial advisory services in connection with this offering.
Management estimates that the aggregate fees paid and payable to Christenberry
Collet & Company, Inc. by the Company will be approximately $273,000. See
"Certain Transactions."

LEGAL MATTERS

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company and the Selling Stockholders by Scudder Law Firm,
P.C., Lincoln, Nebraska. Certain legal matters in connection with this
offering are being passed upon for the Underwriters by Piper & Marbury L.L.P.,
Baltimore, Maryland.

EXPERTS

The consolidated financial statements of the Company as of December 31, 1995
and 1994, and for the years then ended, have been included herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

The consolidated statements of earnings, non-redeemable common stockholders'
equity, and cash flows of the Company for the year ended December 31, 1993,
have been included herein and in the registration statement in reliance upon
the report of Denman & Company, L.L.P., independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm
as experts in accounting and auditing.

Upon recommendation by the Board of Directors, effective December 1994, the
Company replaced Denman & Company, L.L.P. as the Company's independent public
accountants for the 1994 fiscal year in preparation for this offering. The
Company's financial statements for the past two fiscal years have not
contained an adverse opinion or disclaimer of opinion, nor were they qualified
or modified as to uncertainty, audit scope, or accounting principles. The
Company did not have any disagreements with Denman & Company, L.L.P. on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure.

41
<PAGE>

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act with respect to the Class A Common Stock
offered hereby. This Prospectus, which is part of the Registration Statement,
does not contain all the information set forth in the Registration Statement
and the exhibits and schedules thereto, certain items of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Class A Common Stock,
reference is hereby made to the Registration Statement and such exhibits and
schedules filed as a part thereof, which may be inspected, without charge, at
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of all or any portion of the Registration Statement may be obtained from the
Public Reference Section of the Commission, upon payment of prescribed fees.
Statements contained in this Prospectus as to the content of any contract,
agreement, or other document referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract, agreement, or
document filed as an exhibit to the Registration Statement, each such
statement being qualified in its entirety by such reference.

42
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report--KPMG Peat Marwick LLP....................... F-2
Independent Auditors' Report--Denman & Company, L.L.P..................... F-3
Consolidated Balance Sheets at December 31, 1994 and 1995, and March 31,
1996 (unaudited)......................................................... F-4
Consolidated Statements of Earnings for the Years Ended December 31, 1993
, 1994, and 1995,
and for the periods ended March 31, 1995 (unaudited) and March 31, 1996
(unaudited).............................................................. F-6
Consolidated Statements of Non-Redeemable Common Stockholders' Equity for
the Years Ended December 31, 1993, 1994, and 1995, and for the period
ended March 31, 1996 (unaudited)......................................... F-7
Consolidated Statements of Cash Flows for the Years Ended December 31,
1993, 1994, and
1995, and for the periods ended March 31, 1995 (unaudited) and March 31,
1996 (unaudited)......................................................... F-8
Notes to Consolidated Financial Statements................................ F-9
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Smithway Motor Xpress Corp.:

We have audited the accompanying consolidated balance sheets of Smithway
Motor Xpress Corp. and subsidiaries as of December 31, 1995 and 1994 and the
related consolidated statements of earnings, non-redeemable common
stockholders' equity, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Smithway
Motor Xpress Corp. and subsidiaries as of December 31, 1995 and 1994 and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Des Moines, Iowa
February 23, 1996

F-2
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Smithway Motor Xpress Corp.:

We have audited the accompanying consolidated statement of earnings, non-
redeemable common stockholders' equity, and cash flows of Smithway Motor
Xpress Corp. and subsidiaries (formerly the entities described in Note 1) for
the year ended December 31, 1993. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.

We conducted the audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the results of operations and cash
flows of Smithway Motor Xpress Corp. and subsidiaries for the year ended
December 31, 1993 in conformity with generally accepted accounting principles.

As discussed in Note 7 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1993.

Denman & Company

West Des Moines, Iowa
March 10, 1994,
except for Note
1, which is as
of March 1, 1995

F-3
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------- MARCH 31,
1994 1995 1996
------- ------- -----------
ASSETS
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 1,175 $ 2,976 $ 49
Short-term investment (note 12)................... 500 500 300
Receivables (note 5):
Trade........................................... 5,304 5,708 7,413
Other........................................... 309 399 511
Recoverable income taxes........................ -- 9 --
Inventories (note 5)................................ 344 416 416
Deposits, primarily with insurers (note 12)......... 808 854 797
Prepaid expenses.................................... 513 921 1,308
Deferred income taxes (note 7)...................... -- 176 176
------- ------- -------
Total current assets.......................... 8,953 11,959 10,970
------- ------- -------
Property and equipment (note 6):
Land.............................................. 431 481 531
Buildings and improvements........................ 2,863 3,626 3,685
Tractors.......................................... 12,352 20,423 26,656
Trailers.......................................... 11,008 13,852 14,953
Other equipment................................... 2,598 3,049 3,124
------- ------- -------
29,252 41,431 48,949
Less accumulated depreciation and amortization.... 13,428 13,588 15,093
------- ------- -------
Net property and equipment.................... 15,824 27,843 33,856
------- ------- -------
Other assets (note 13).............................. 452 900 1,148
------- ------- -------
$25,229 $40,702 $45,974
======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- MARCH 31,
1994 1995 1996
------- ------- -----------
(UNAUDITED)
LIABILITIES AND NON-REDEEMABLE COMMON STOCKHOLDERS' EQUITY

<S> <C> <C> <C>
Current liabilities:
Line of credit................................. $ -- $ -- $ 1,402
Current maturities of long-term debt (note 6).. 3,188 4,861 5,517
Accounts payable............................... 1,653 1,972 2,107
Accrued loss reserves (note 12)................ 1,239 1,370 1,159
Other accrued expenses......................... 1,713 1,240 1,099
Income taxes payable........................... 782 -- 102
Deferred income taxes (note 7)................. 7 -- --
------- ------- -------
Total current liabilities.................. 8,582 9,443 11,386
Long-term debt, less current maturities (note 6). 8,587 18,358 21,038
Deferred income taxes (note 7)................... 2,251 3,618 3,752
------- ------- -------
Total liabilities.......................... 19,420 31,419 36,176
------- ------- -------
Redeemable Class A common stock (note 9)......... 1,020 1,412 1,634
------- ------- -------
Non-redeemable common stockholders' equity (note
8):
Preferred stock................................ -- -- --
Common stock:
Class A...................................... 18 18 17
Class B...................................... 10 10 10
Additional paid-in capital..................... -- -- --
Retained earnings.............................. 5,167 8,138 8,430
Reacquired shares, at cost..................... (58) (52) (78)
Equity reduction for Employee Stock Ownership
Plan (ESOP) debt
(note 9)...................................... (348) (243) (215)
------- ------- -------
Total non-redeemable common stockholders'
equity.................................... 4,789 7,871 8,164
------- ------- -------
Commitments (notes 11 and 12)
$25,229 $40,702 $45,974
======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------- ------------------------
1993 1994 1995 1995 1996
---------- ---------- ---------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating revenue:
Freight............... $ 59,810 $ 69,044 $ 77,020 $ 18,257 $ 19,834
Other................. 121 136 319 16 26
---------- ---------- ---------- ---------- ----------
Operating revenue... 59,931 69,180 77,339 18,273 19,860
---------- ---------- ---------- ---------- ----------
Operating expenses:
Purchased
transportation....... 23,797 27,420 31,621 7,265 7,792
Compensation and
employee benefits.... 13,840 15,877 17,182 4,081 4,539
Fuel, supplies, and
maintenance.......... 8,876 9,368 10,183 2,373 2,799
Insurance and claims.. 2,318 2,238 1,827 532 374
Taxes and licenses.... 1,492 1,454 1,588 375 393
General and
administrative....... 3,357 3,512 3,592 862 942
Communications and
utilities............ 543 585 758 156 219
Depreciation and
amortization......... 2,821 2,774 3,879 949 1,506
---------- ---------- ---------- ---------- ----------
Total operating
expenses........... 57,044 63,228 70,630 16,593 18,564
---------- ---------- ---------- ---------- ----------
Earnings from
operations......... 2,887 5,952 6,709 1,680 1,296
Financial (expense)
income:
Interest expense...... (1,255) (1,066) (1,456) (272) (429)
Interest income....... 76 100 231 22 15
---------- ---------- ---------- ---------- ----------
Earnings before
income taxes....... 1,708 4,986 5,484 1,430 882
Income taxes (note 7). 603 1,879 2,393 617 369
---------- ---------- ---------- ---------- ----------
Earnings before
cumulative effect
of change in
accounting
principle.......... 1,105 3,107 3,091 813 513
Cumulative effect of
change in accounting
principle (note 7)..... 86 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net earnings........ $ 1,019 $ 3,107 $ 3,091 $ 813 $ 513
========== ========== ========== ========== ==========
Pro forma data
(unaudited--note 14):
Historical net
earnings............. $ 1,019 $ 3,107 $ 3,091 $ 813 $ 513
Pro forma provision
for income taxes..... 177 232 -- -- --
---------- ---------- ---------- ---------- ----------
Pro forma net
earnings............. $ 842 $ 2,875 $ 3,091 $ 813 $ 513
========== ========== ========== ========== ==========
Net earnings per common
share (pro forma in
1993 and 1994):
Earnings before
cumulative effect of
change in accounting
principle............ $ .27 $ .82 $ .88 $ .23 $ .15
Cumulative effect of
change in accounting
principle............ .02 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net earnings........ $ .25 $ .82 $ .88 $ .23 $ .15
========== ========== ========== ========== ==========
Weighted average common
shares outstanding (pro
forma in 1993 and
1994).................. 3,428,270 3,498,212 3,524,042 3,535,650 3,501,681
========== ========== ========== ========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF NON-REDEEMABLE COMMON STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
TOTAL NON-
NON- EQUITY REDEEMABLE
REDEEMABLE ADDITIONAL REDUCTION COMMON
COMMON PAID-IN RETAINED REACQUIRED FOR ESOP STOCKHOLDERS'
STOCK CAPITAL EARNINGS SHARES DEBT EQUITY
---------- ---------- -------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1992................... $29 -- $2,550 $ -- $(529) $2,050
Net earnings............ -- -- 1,019 -- -- 1,019
Net contributions
(distributions)........ -- -- (455) -- -- (455)
Reduction of ESOP debt.. -- -- -- -- 86 86
Acquisition of common
shares (note 8)........ -- -- -- (37) -- (37)
Change in value and
number of redeemable
common shares (note 9). (1) -- (149) -- -- (150)
--- ---- ------ ---- ----- ------
Balance at December 31,
1993................... 28 -- 2,965 (37) (443) 2,513
Net earnings............ -- -- 3,107 -- -- 3,107
Net contributions
(distributions)........ -- -- (534) -- -- (534)
Reduction of ESOP debt.. -- -- -- -- 95 95
Sale of 147,879 common
shares................. 1 219 -- -- -- 220
Acquisition of common
shares (note 8)........ -- (219) (91) (21) -- (331)
Change in value and
number of redeemable
common shares (note 9). (1) -- (280) -- -- (281)
--- ---- ------ ---- ----- ------
Balance at December 31,
1994................... 28 -- 5,167 (58) (348) 4,789
Net earnings............ -- -- 3,091 -- -- 3,091
Net contributions
(distributions)........ -- 127 -- -- -- 127
Net undistributed
earnings of "S"
corporation and sole
proprietorship at date
of termination (note
1)..................... -- 47 (47) -- -- --
Cancellation of
reacquired common
shares (note 8)........ -- (58) -- 58 -- --
Reduction of ESOP debt.. -- -- -- -- 105 105
Change in price of
common shares
repurchased which was
provided for in 1994
(note 9)............... -- 203 -- -- -- 203
Acquisition of common
shares (note 8)........ -- -- -- (52) -- (52)
Change in value and
number of redeemable
common shares (note 9). -- (319) (73) -- -- (392)
--- ---- ------ ---- ----- ------
Balance at December 31,
1995................... 28 -- 8,138 (52) (243) 7,871
Net earnings
(unaudited)............ -- -- 513 -- -- 513
Reduction of ESOP debt
(unaudited)............ -- -- -- -- 28 28
Acquisition of common
shares (unaudited)..... -- -- -- (26) -- (26)
Change in value and
number of redeemable
common shares (note 9). (1) -- (221) -- -- (222)
--- ---- ------ ---- ----- ------
Balance at March 31,
1996 (unaudited)....... $27 $ -- $8,430 $(78) $(215) $8,164
=== ==== ====== ==== ===== ======
</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------- -----------------------
1993 1994 1995 1995 1996
-------- -------- -------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net earnings............ $ 1,019 $ 3,107 $ 3,091 $ 813 $ 513
-------- -------- -------- -------- --------
Adjustments to reconcile
net earnings to net
cash provided by (used
in) operating
activities:
Depreciation and
amortization........... 2,821 2,774 3,879 949 1,506
Deferred income taxes... 388 809 1,184 (66) 134
Changes in:
Trade receivables...... (154) (993) (404) (868) (1,705)
Other receivables...... (171) 43 (90) (45) (112)
Inventories............ 65 (41) (72) 1 --
Deposits, primarily
with insurers......... (557) (90) (46) 5 57
Prepaid expenses....... 529 (45) (408) (250) (387)
Accounts payable....... (166) 519 319 406 135
Accrued loss reserves.. 526 183 131 215 (211)
Other accrued
expenses.............. 193 154 (270) (381) (141)
Income taxes........... 317 625 (791) (218) 111
-------- -------- -------- -------- --------
Total adjustments.... 3,791 3,938 3,432 (252) (613)
-------- -------- -------- -------- --------
Net cash provided by
(used in) operating
activities.......... 4,810 7,045 6,523 561 (100)
-------- -------- -------- -------- --------
Cash flows from investing
activities:
Purchase of property and
equipment.............. (211) (424) (2,836) (700) (2,822)
Proceeds from sale of
property and equipment. 480 428 211 -- --
Payments received on
notes receivable....... -- 77 -- -- --
Purchase of short-term
investments............ (500) (500) (500) (500) (300)
Proceeds from short-term
investments............ 632 500 500 500 500
-------- -------- -------- -------- --------
Net cash provided by
(used in) investing
activities.......... 401 81 (2,625) (700) (2,622)
-------- -------- -------- -------- --------
Cash flows from financing
activities:
Proceeds from long-term
debt................... 811 -- 2,869 -- --
Principal payments on
long-term debt......... (4,170) (3,873) (4,593) (1,049) (1,333)
Borrowings on line of
credit agreement....... 61,486 66,610 77,606 15,596 19,469
Payments on line of
credit agreement....... (61,642) (69,911) (77,606) (15,596) (18,067)
Payments for reacquired
shares................. (37) (21) (52) -- (26)
Proceeds from issuance
of common stock........ -- 220 -- -- --
Distributions........... (455) (574) (55) (55) --
Contributions........... -- 40 182 182 --
Other................... -- -- (448) (9) (248)
-------- -------- -------- -------- --------
Net cash (used in)
provided by
financing
activities.......... (4,007) (7,509) (2,097) (931) (205)
-------- -------- -------- -------- --------
Net increase
(decrease) in cash
and cash
equivalents......... 1,204 (383) 1,801 (1,070) (2,927)
Cash and cash equivalents
at beginning of period.. 354 1,558 1,175 1,175 2,976
-------- -------- -------- -------- --------
Cash and cash equivalents
at end of period........ $ 1,558 $ 1,175 $ 2,976 $ 105 $ 49
======== ======== ======== ======== ========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest................ $ 1,268 $ 1,070 $ 1,401 $ 264 $ 473
Income taxes............ 5 445 2,151 589 121
======== ======== ======== ======== ========
Supplemental schedules of
noncash investing and
financing activities:
Notes payable:
Terminal acquisition.... $ 114 $ -- $ -- $ -- $ --
Tractors and trailers... 4,486 4,844 13,273 2,364 4,697
Tires on above:
Prepaid at end of
year.................. 76 133 232 91 129
Expensed............... 77 209 365 33 102
Notes receivable
issuance for sale of
property and equipment. -- 453 -- -- --
Principal payments made
by ESOP................ 86 95 105 25 28
Liability established
for fractional shares
to be acquired (note
8)..................... -- 310 (203) -- --
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.

F-8
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1994 AND 1995
(INFORMATION PERTAINING TO THE THREE MONTHS ENDED MARCH 31, 1994 AND 1995 IS
UNAUDITED)
(DOLLARS IN THOUSANDS)

(1) CONSOLIDATED ENTITY

Smithway Motor Xpress Corp. and subsidiaries is a Fort Dodge, Iowa-based
truckload motor carrier primarily serving shippers in the central United
States and southern provinces of Canada. It operates over short-to-medium
traffic routes, concentrating primarily on the flatbed segment of the
truckload market.

Smithway Motor Xpress Corp. was incorporated, as a Nevada corporation, on
January 17, 1995 to acquire the stock of Smithway Motor Xpress, Inc.; the
stock of Smithway Transportation Brokerage, Inc.; the stock of Wilmar Truck
Leasing, Inc. (an "S" corporation); and the net assets of Smith Leasing (a
sole proprietorship), in preparation for a proposed initial public offering of
its Class A common stock. Unless otherwise indicated, the companies and sole
proprietorship named in this paragraph are collectively referred to as the
"Company."

The transactions described above were between entities under common control;
accordingly, they have been accounted for in a manner similar to a pooling of
interests, and the accompanying consolidated financial statements represent
the historical combined operations of such companies. Name references in the
consolidated financial statements and the notes thereto have been changed to
reflect these transactions, which were effective as of January 31, 1995. All
share and per share information for all periods has been restated to reflect
the conversion into Smithway Motor Xpress Corp. common stock based upon the
actual shares issued.

Pursuant to the acquisitions described above, Smithway Motor Xpress Corp.
issued 3,513,697 shares of its common stock as follows:

<TABLE>
<CAPTION>
SHARES OR ASSETS SMITHWAY MOTOR XPRESS
STOCKHOLDER RELINQUISHED CORP. SHARES ISSUED
----------- ---------------- ---------------------
<S> <C> <C>
William G. Smith and 788,000 common shares of 942,146 Class A common
Marlys L. Smith Smithway Motor Xpress, Inc. shares and 1,000,000
Class B common shares(a)
All common shares of 269,500 Class A
Smithway Transportation common shares
Brokerage, Inc.
All common shares of 2,308 Class A
Wilmar Truck Leasing, Inc. common shares
Assets of Smith Leasing, 55,126 Class A
net of liabilities assumed common shares
G. Larry Owens 60,000 common shares of 147,879 Class A
Smithway Motor Xpress, Inc. common shares (b)
Smithway Motor
Xpress, 444,987 common shares of 1,096,738 Class A
Inc. Employee Stock Smithway Motor Xpress, Inc. common shares
Ownership Plan
(ESOP)
</TABLE>
- --------
(a) Management of the Company believes that the fair value of the Class A
Common Stock is not materially different from that of the Class B Common
Stock.
(b) The original 60,000 shares (147,879 Class A common shares of the Company)
issued to G. Larry Owens, Executive Vice President of the Company, in 1994
were issued for cash based upon the appraised value of the stock for ESOP
purposes.

F-9
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company as
described in note 1. All significant intercompany balances and transactions
have been eliminated in consolidation.

Customers

The Company serves a diverse base of shippers. No single customer accounted
for more than 10 percent of the Company's total operating revenues during any
of the years ended December 31, 1993, 1994, and 1995. The Company's 10 largest
customers accounted for approximately 34 percent of the Company's total
operating revenues during 1995. The Company's largest concentration of
customers is in the steel and building materials industries, which together
accounted for approximately 51 percent of the Company's total operating
revenues in 1995.

Drivers

The Company faces intense industry competition in attracting and retaining
qualified drivers and independent contractors. This competition could result
in the Company temporarily idling some of its revenue equipment or increasing
the compensation the Company pays to its drivers and independent contractors.

Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these consolidated financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.

Cash and Cash Equivalents

The Company considers interest-bearing instruments with an original maturity
of three months or less to be the equivalent of cash.

Short-Term Investment

Short-term investment, which consists of a certificate of deposit with a
maturity of greater than three months, is stated at cost, which approximates
market value.

Receivables

The financial status of customers is checked and monitored by the Company
when granting credit. The Company routinely has significant dollar
transactions with certain customers. At December 31, 1993 and 1994, there were
no accounts receivable in excess of 10 percent of total trade receivables. At
December 31, 1995, one customer accounted for approximately 13 percent of
total trade receivables.

Inventories

Inventory consists of tractor and trailer supplies and parts. Inventory is
stated at lower of cost (first-in, first-out method) or market.

F-10
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

Prepaid Expenses

Prepaid expenses consist primarily of the cost of tarps, which are amortized
over 36 months and the cost of tires purchased with new equipment, which are
amortized six months in the year of purchase and six months in the subsequent
year. The unamortized cost is included in prepaid expenses. Replacement and
recapped tires are expensed when placed in service.

Accounting for Leases

The Company is a lessee of revenue equipment under capital and operating
leases. Equipment under capital leases is capitalized and depreciated over the
term of the lease, and the related interest expense is charged to the
consolidated statements of earnings as it is incurred. Under operating leases,
rent expense is charged to operations as it is incurred under the terms of the
respective leases.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided by use
of the straight-line and declining-balance methods over lives of 5 to 31 years
for buildings and improvements, 5 to 7 years for tractors and trailers, and 3
to 10 years for other equipment.

Expenditures for maintenance and minor repairs are charged to operations,
and expenditures for major replacements and betterments are capitalized. The
cost and related accumulated depreciation on property and equipment retired,
traded, or sold are eliminated from the property accounts at the time of
retirement, trade, or sale.

In accordance with industry practices, the gain or loss on retirement or
sale is included in depreciation and amortization in the consolidated
statements of earnings. Gains or losses on trade-ins are included in the basis
of the new asset.

Revenue Recognition

The Company recognizes operating revenue when the freight to be transported
has been loaded. Amounts payable to independent contractors for purchased
transportation, to Company drivers for wages, and other direct expenses are
accrued when the related revenue is recognized. The Company operates in the
short-to-medium length haul category of the trucking industry and therefore,
the Company's typical customer delivery is completed one day after pickup.
Accordingly, this method of revenue recognition is not materially different
from recognizing revenue based on completion of delivery.

ESOP Indebtedness

Long-term indebtedness of the Company-sponsored leveraged ESOP has been
recorded in the consolidated balance sheets as a liability under the captions
"Current maturities of long-term debt" and "Long-term debt, less current
maturities" with a corresponding reduction in stockholders' equity under the
caption "Equity reduction for ESOP debt." As principal payments are made on
the debt by the ESOP, the Company's long-term debt and related stockholders'
equity reduction is reduced.

Insurance and Claims

Losses resulting from personal liability, physical damage, and workers'
compensation are covered by insurance subject to certain deductibles, and
claims resulting from cargo loss and damage are self insured. Losses resulting
from uninsured claims are recognized when such losses are known and can be
estimated. The Company estimates and accrues a liability for its share of
ultimate settlements using all available information. Expenses depend on
actual loss experience and changes in estimates of settlement amounts for open
claims which have not been fully resolved.

F-11
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

Income Taxes

Prior to the transactions described in note 1, Wilmar Truck Leasing, Inc.,
had elected "S" Corporation status under the Internal Revenue Code and Smith
Leasing was a sole proprietorship. Accordingly, for 1993 and 1994, there was
no provision for income taxes in the consolidated financial statements related
to these two entities since the income tax liability or benefit accrued to the
stockholders or owner and not to the Company. As discussed in note 14, a pro
forma provision for income taxes (unaudited) relating to the earnings of the
"S" Corporation and sole proprietorship has been reflected in the pro forma
data included in the accompanying consolidated statements of earnings for the
years ended December 31, 1993 and 1994.

Statement of Financial Accounting Standard (SFAS) No. 109, "Accounting for
Income Taxes," was adopted by the Company as of January 1, 1993, and the
Company has reported the cumulative effect of the change in method of
accounting for income taxes in the 1993 consolidated statement of earnings.
SFAS 109 requires income taxes to be accounted for under the asset and
liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. Previously, deferred taxes were recognized
when income or expense items were reported in different periods for financial
reporting and income tax purposes, using the tax rate applicable to the year
of calculation.

Net Earnings Per Common Share

Net earnings per common share (pro forma in 1993 and 1994--unaudited) have
been computed by dividing net earnings by the weighted average outstanding
redeemable and non-redeemable Class A and Class B common shares during each of
the periods (see note 14).

Unaudited Interim Financial Statements

The consolidated financial statements as of and for the three months ended
March 31, 1995 and 1996 are unaudited. These interim financial statements
include all adjustments (consisting of normal recurring adjustments)
considered necessary by management for presentation of the financial position
and results of operations for these periods. The results of operations for
interim periods are not necessarily indicative of the results that may be
expected for the entire year.

(3) ACQUISITIONS

On May 31, 1995, the Company entered into a 5-year consulting and noncompete
clause with the shareholder of Van Tassel, Inc. for $72 and assumed certain
leases for 15 trailers. The Company also purchased certain office equipment of
Van Tassel, Inc. for approximately $37. The effect of this transaction is not
material to the consolidated financial statements of the Company.

In January 1996, the Company purchased 12 trailers, 21 flat racks, and
certain office equipment from Smith Trucking Company. The Company also entered
into a 2-year noncompete agreement with the shareholder of Smith Trucking
Company. The Company agreed to pay total consideration of $381 in the
transaction.

F-12
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

(4) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and estimated fair values
of the Company's financial instruments at December 31, 1995. SFAS 107,
"Disclosures about Fair Value of Financial Instruments," defines the fair
value of a financial instrument as the amount at which the instrument could be
exchanged in a current transaction between willing parties.

<TABLE>
<CAPTION>
CARRYING FAIR
AMOUNT VALUE
-------- -------
<S> <C> <C>
Financial assets:
Cash and cash equivalents............................. $ 2,976 $ 2,976
Short-term investment................................. 500 500
Trade receivables..................................... 5,708 5,708
Other receivables..................................... 399 399
Financial liabilities:
Accounts payable...................................... 1,972 1,972
Accrued loss reserves................................. 1,370 1,370
Other accrued expenses................................ 1,240 1,240
Long-term debt........................................ 23,219 22,543
</TABLE>

The carrying amounts shown in the table are included in the balance sheet
under the indicated captions.

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Cash and cash equivalents, short-term investment, trade receivables,
other receivables, accounts payable, accrued loss reserves, and other
accrued expenses: The carrying amounts approximated fair value because of
the short maturity of those instruments.

Long-term debt: The fair value of the Company's long-term debt was
estimated by discounting the future cash flows of each instrument at rates
currently offered to the Company for similar debt instruments of comparable
maturities by the Company's bankers.

(5) LINES OF CREDIT

The Company has a line of credit agreement which allows advances up to the
lesser of 85 percent of qualifying accounts receivable or $5,750. Any
borrowings under this line of credit are secured by accounts receivable and
inventories. There were no outstanding borrowings at December 31, 1994 and
1995. This line of credit bore interest at 1.25 percent over prime at December
31, 1993 and 1994 and .50 percent over prime at December 31, 1995. The
interest rate would have been 8.00 percent at December 31, 1993; 9.75 percent
at December 31, 1994; and 9.00 percent at December 31, 1995. See also note 12.

At December 31, 1994 and 1995, the Company also had a second line of credit
totaling $425. There were no outstanding balances at December 31, 1994 and
1995 under this line. Interest is payable monthly at 2 percent over prime,
which would have been 10.5 percent at December 31, 1994 and 1995. Any
borrowings under this line of credit would be secured by certain equipment.
This line of credit expired January 28, 1996.

F-13
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

(6) LONG-TERM DEBT

The following is a summary of long-term debt at December 31, 1994 and 1995:

<TABLE>
<CAPTION>
PAYABLE CURRENT
THROUGH INTEREST RATE 1994 1995
------- --------------- ------- -------
<S> <C> <C> <C> <C>
Equipment notes......................... 1999 5.64% to 12.75% $10,085 $21,902
Capitalized lease obligations........... 1995 5.69% to 13.00% 332 --
Mortgages............................... 2000 8.49% to 10.00% 1,010 1,074
Debt of Company-sponsored ESOP.......... 1997 10.00% 348 243
------- -------
11,775 23,219
Less current maturities................. 3,188 4,861
------- -------
$ 8,587 $18,358
======= =======
</TABLE>

The Company has pledged all equipment and real estate except those included
in note 5 as security for these debts.

Cost and accumulated depreciation of equipment under capital leases at
December 31, 1994 was as follows:

<TABLE>
<S> <C>
Cost:
Tractors......................................................... $1,235
Trailers......................................................... 175
Other equipment.................................................. 204
------
1,614
Accumulated amortization........................................... 1,218
------
$ 396
======
</TABLE>

Amortization expense related to the above capital leases was $331, $183, and
$59 for the years ended December 31, 1993, 1994, and 1995, respectively, and
is included in depreciation and amortization expense in the accompanying
consolidated statements of earnings.

Future maturities on long-term debt for years ending December 31, are as
follows:

<TABLE>
<CAPTION>
EQUIPMENT
NOTES AND ESOP
MORTGAGES DEBT
--------- ----
<S> <C> <C>
1996....................................................... $ 4,756 $105
1997....................................................... 4,734 138
1998....................................................... 5,012 --
1999....................................................... 4,113 --
2000....................................................... 3,328 --
Thereafter................................................. 1,033 --
------- ----
$22,976 $243
======= ====
</TABLE>

For the three months ended March 31, 1996, substantially all long-term debt
incurred by the Company related to equipment notes with essentially the same
terms and interest rates as the equipment notes outstanding at December 31,
1995.

F-14
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)
(7) INCOME TAXES

As discussed in Note 2, the Company adopted SFAS 109 as of January 1, 1993.
The cumulative effect of the change in accounting for income taxes as of
January 1, 1993 of $86 has been reported in the 1993 consolidated statement of
earnings. There was no effect for the year ended December 31, 1993 of applying
SFAS 109 on earnings before income taxes.

Income taxes consist of the following components:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
YEAR ENDED DECEMBER 31, 1993 31, 1994
------------------------------- --------------------
FEDERAL STATE TOTAL FEDERAL STATE TOTAL
---------- -------- --------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Current..................... $ 264 $ 34 $ 301 $ 905 $165 $1,070
Deferred.................... 257 45 302 704 105 809
--------- -------- --------- ------ ---- ------
$521 $ 82 $ 603 $1,609 $270 $1,879
========= ======== ========= ====== ==== ======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31, 1995
--------------------
FEDERAL STATE TOTAL
------- ----- ------
<S> <C> <C> <C>
Current.............................................. $1,088 $121 $1,209
Deferred............................................. 1,034 150 1,184
------ ---- ------
$2,122 $271 $2,393
====== ==== ======
</TABLE>

Total income tax expense differs from the amount of income tax expense
computed by applying the normal United States federal income tax of 34 percent
to income before income tax expense. The reasons for such differences are as
follows:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------------
1993 1994 1995
---- ------ ------
<S> <C> <C> <C>
Computed "expected" tax expense..................... $581 $1,695 $1,865
State income tax expense, net of federal benefit.... 40 179 179
Permanent differences, primarily nondeductible
portion of driver per diem and travel expenses..... 72 142 153
Tax effect (at expected federal rate) on income from
nontaxable sole proprietorship and "S" Corporation. (155) (210) --
Other............................................... 65 73 196
---- ------ ------
$603 $1,879 $2,393
==== ====== ======
</TABLE>

Temporary differences between the financial statement basis of assets and
liabilities and the related deferred tax assets and liabilities at December
31, 1994 and 1995 were as follows:

<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Deferred tax assets:
Alternative minimum tax (AMT) credit carryforwards.... $ -- $ 353
Accrued expenses...................................... 102 334
------- -------
Total gross deferred tax assets..................... 102 687
------- -------
Deferred tax liabilities:
Prepaid expenses...................................... (109) (158)
Property and equipment................................ (2,251) (3,971)
------- -------
Total gross deferred tax liabilities................ (2,360) (4,129)
------- -------
Net deferred tax liabilities........................ $(2,258) $(3,442)
======= =======
</TABLE>

At December 31, 1995, the Company had approximately $353 in AMT credit
carryforwards. These credits are available indefinitely to reduce future
income tax liabilities to the extent they exceed AMT liabilities.

F-15
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

(8) STOCKHOLDERS' EQUITY

The total number of shares of capital stock of all classes which the Company
has the authority to issue is 30 million shares, all having a par value of one
cent per share. Capital stock authorized consists of 20 million shares of
Class A common stock, 5 million shares of Class B common stock, and 5 million
shares of preferred stock.

On all matters with respect to which the Company's stockholders have a right
to vote, each share of Class A common stock is entitled to one vote, while
each share of Class B common stock is entitled to two votes. The Class B
common stock is convertible into shares of Class A common stock on a share-
for-share basis at the election of the stockholder and will be converted
automatically into shares of Class A common stock upon transfer to any party
other than William G. Smith, his wife, Marlys L. Smith, their children, their
grandchildren, trusts for any of their benefit, and entities wholly owned by
them.

Pursuant to the transactions described in note 1, the Company had
outstanding 2,513,697 shares of Class A common stock, 1 million shares of
Class B common stock, and no shares of preferred stock, prior to the proposed
public offering of Class A common stock and reacquired shares described below.

The Company reacquired 27,854 common shares during 1993 and 14,899 shares
during 1994 at a cost of $37 and $21, respectively. These common shares were
canceled by the Company as a result of the transactions described in note 1.
The Company reacquired 9,627 common shares in 1995 at a cost of $52.

At December 31, 1994, the Company provided a current liability of $310 for
certain minority common shares of the Company which were not acquired in the
transaction described in note 1. Such amount was charged to additional paid-in
capital and retained earnings, since these shares were reacquired as
fractional shares after a reverse stock split by the Company in 1995. The
actual purchase price from these fractional shares during 1995 differed from
$310 due to a change in the purchase price of the fractional shares from the
proposed initial public offering price to the appraised value of the Company
at December 31, 1994 and a change in the number of shares repurchased. The
effect of these changes was $203 and has been reflected in additional paid-in
capital during 1995.

The Company adopted an incentive stock option plan effective March 1, 1995.
The Company has reserved 225,000 shares of Class A common stock for issuance
pursuant to the plan agreement. At December 31, 1995, the Company had granted
options covering 85,000 shares to certain employees at an exercise price of
$9.50 per share. Such options become excercisable between January 1, 1996 and
January 1, 2000 at the rate of 20 percent per year. Any shares which expire
unexercised or are forfeited become available again for issuance under the
plan. No awards of incentive stock options may be made after December 31,
2004.

The Company also adopted an outside director stock option plan effective
March 1, 1995. The Company has reserved 25,000 shares of Class A common stock
for issuance pursuant to the plan agreement. The term of each option shall be
6 years from the grant date. Options vest on the first anniversary of the
grant date. Exercise price of each stock option is 85 percent of the fair
market value of the common stock on the last day of the calendar month
immediately preceding the date of grant. At December 31, 1995, no options had
been granted under the plan.

F-16
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

(9) ESOP AND REDEEMABLE CLASS A COMMON STOCK

The Company's ESOP entered into an agreement to purchase shares of common
stock from a stockholder during December 1986, for approximately $900 payable
over an 11-year period. In connection with this purchase of common stock, the
ESOP incurred a note payable to the previous stockholder which had a balance
of $348 and $243 as of December 31, 1994 and 1995, respectively. Such debt has
been recorded in the accompanying consolidated balance sheets; see note 6.
Actual interest expense on the ESOP debt was $50, $41 and $31 during the years
ended December 31, 1993, 1994, and 1995, respectively. Contributions made to
the plan for the years ended December 31, 1993, 1994, and 1995, were $156,
$138, and $138.

The plan provides for 100 percent vesting after six years of service. Vested
benefits will normally be distributed to the participant from the plan upon
death or retirement in the form of cash or Company stock. Participants may
sell the stock they received to a third party; however, the Company has a
right of first refusal to purchase the stock, until the date of any initial
public offering, at which time the right of first refusal expires.

The participant or beneficiary has two put options to the employer which
require that the Company purchase the shares at a price equal to its value in
cash or in installments over a period of five years. The first 60 day put
option begins the day following the date the stock was distributed to the
participant or beneficiary. The second 60 day put option begins the first day
of the fifth month of the plan year following the date of such stock
distribution. Distribution of shares only occurs upon termination of
employment or retirement.

Due to the put option, the total appraised value at which the Company would
have to repurchase the shares at December 31, 1994, 1995 and March 31, 1996,
respectively, of the 651,127, 649,710, and 751,770 vested shares of Class A
common stock at December 31, 1994, 1995 and March 31, 1996, respectively, has
been classified as redeemable Class A common stock in the accompanying
consolidated balance sheets and not as part of consolidated non-redeemable
common stockholders' equity. The change in the balance of redeemable Class A
common stock results from the change in the number of vested shares and the
change in the appraised value during the periods.

In accordance with provisions of the ESOP and applicable law, the rights to
these put options will no longer exist upon the effective date of an initial
public offering of common stock by the Company.

(10) EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN

The Company has an Employees' Profit Sharing and Savings Plan which is a
qualified plan under the provisions of Sections 401(a) and 501(a) of the
Internal Revenue Code. Eligible employees are allowed to contribute up to a
maximum of 15 percent of pretax compensation into the plan. Employers may make
savings, matching, and discretionary contributions, subject to certain
restrictions. During the years ended December 31, 1993, 1994, and 1995,
Company contributions totaled $50, $50, and $64, respectively.

(11) LEASE COMMITMENTS

The Company has entered into various noncancelable operating leases for
transportation equipment and buildings which will expire over the next five
years. Under the leases of transportation equipment, the Company is
responsible for all repairs, maintenance, insurance, and all other operating
expenses.

F-17
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(DOLLARS IN THOUSANDS)

The following is a schedule by year of approximate future minimum lease
payments under noncancelable operating leases as of December 31, 1995:

<TABLE>
<S> <C>
Year ending December 31:
1996............................................................. $1,609
1997............................................................. 1,084
1998............................................................. 681
1999............................................................. 58
Thereafter....................................................... --
------
Total minimum lease payments................................... $3,432
======
</TABLE>

Certain leases on transportation equipment require the Company to guarantee
the value at the maturity of the lease at amounts varying from 8 percent to 20
percent of the original equipment cost. The maximum contingent liability under
such leases is approximately $888 from 1996 to 1999.

Rent charged to expenses on the above leases, expired leases, and short-term
rentals was $1,762 in 1993; $1,621 in 1994; and $1,901 in 1995.

(12) CONTINGENT LIABILITIES

The Company's insurance program for personal liability, physical damage, and
workers' compensation involves self-insurance for losses up to $50 per claim,
$50 per claim, and $100 per claim, respectively. At December 31, 1994 and
1995, the Company had approximately $1,239 and $1,370, respectively, accrued
for its estimated liability for incurred losses related to these programs.
Losses in excess of the self-insured amount per claim are covered by insurance
companies.

The insurance companies require the Company to provide letters of credit to
provide funds for payment of the self-insured amounts. At December 31, 1994
and 1995, the Company had two standby letters of credit from a commercial bank
in the amounts of $500 and $100, both expiring on January 11, 1996. The
letters of credit are secured by a certificate of deposit in the amount of
$500, held by a commercial bank. At December 31, 1995, the Company also had a
$1,000 letter of credit from a commercial bank. The letter of credit is
secured by the collateral described in note 5 for the $5,750 line of credit
with the same bank. This letter of credit directly reduces the amount of
potential borrowings available under this line of credit. In addition, funds
totaling $754 and $801 were held by the insurance companies as deposits at
December 31, 1994 and 1995, respectively.

The Company's insurance program for health insurance provided as an employee
benefit for all eligible employees involves self-insurance for losses up to
$60 per claim and an aggregate loss of $940. At December 31, 1994 and 1995,
the Company had approximately $240 and $400, respectively, accrued for its
estimated liability related to these claims.

At December 31, 1995, the Company anticipated purchasing $12 million of new
equipment during 1996. As of February 23, 1996, the Company had purchased $5
million of new equipment, and certain orders had been placed for additional
equipment. However, the Company is not committed to purchase the equipment
ordered.

(13) TRANSACTIONS WITH RELATED PARTIES

At December 31, 1994 and 1995, other assets included $66 in receivables from
an officer and a related party.

The Company leased a terminal through March 1993 from a stockholder, at
which time the terminal was purchased from such stockholder for $164. Rent
expense was $5 on such lease for the period leased in 1993.

F-18
<PAGE>

SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

(DOLLARS IN THOUSANDS)

(14) PRO FORMA DATA (UNAUDITED)

The following unaudited pro forma information accounts for the effect of
income taxes on the earnings for the years ended December 31, 1993 and 1994,
of Wilmar Truck Leasing, Inc., an "S" Corporation, and Smith Leasing, a sole
proprietorship, as if those operations had been subject to corporate income
taxes. Pro forma corporate income taxes relating to these operations for the
period January 1, 1995 to January 31, 1995, the effective date of the
transactions described in note 1, would be insignificant.

<TABLE>
<CAPTION>
YEARS
ENDED
DECEMBER
31,
----------
1993 1994
---- -----
<S> <C> <C>
Pro forma income taxes:
Federal...................................................... $145 $ 200
State........................................................ 32 32
---- -----
$177 $ 232
==== =====
</TABLE>

The difference between the pro forma expected income tax expense (computed
using the federal income tax rate of 34 percent) and the pro forma income tax
expense is the effect of state income taxes, net of federal benefit.

Pro forma net earnings per common share have been based upon the number of
common shares which would have been outstanding considering the actual
conversion ratio of Smithway Motor Xpress, Inc. shares into Smithway Motor
Xpress Corp. shares and as though the 326,934 common shares issued in
connection with the Smithway Transportation Brokerage, Inc., Wilmar Truck
Leasing, Inc., and Smith Leasing acquisitions had been outstanding during all
periods presented, which assumes the transactions described in note 1 had
taken place January 1, 1993.

F-19
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFOR-
MATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY OR EITHER UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OF-
FER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR SINCE THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 6
Acquisition of Related Companies and Holding Company Formation............ 10
Use of Proceeds........................................................... 11
Dividend Policy........................................................... 11
Capitalization............................................................ 12
Dilution.................................................................. 13
Selected Consolidated Financial and Operating Data........................ 14
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 16
Industry Overview......................................................... 22
Business.................................................................. 23
Management................................................................ 30
Certain Transactions...................................................... 34
Principal and Selling Stockholders........................................ 35
Description of Capital Stock.............................................. 36
Shares Eligible for Future Sale........................................... 39
Underwriting.............................................................. 40
Legal Matters............................................................. 41
Experts................................................................... 41
Additional Information.................................................... 42
Index to Consolidated Financial Statements................................ F-1
</TABLE>

---------------

UNTIL JULY 22, 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON
STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DE-
LIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO UNSOLD AL-
LOTMENTS OR SUBSCRIPTIONS.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

2,150,000 SHARES

LOGO

SMITHWAY MOTOR XPRESS CORP.

CLASS A COMMON STOCK

---------------

PROSPECTUS

---------------

MORGAN KEEGAN & COMPANY, INC.

A.G. EDWARDS & SONS, INC.

GEORGE K. BAUM & COMPANY

JUNE 27, 1996

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an itemized statement of all expenses to be incurred by
the Registrant in connection with the sale and distribution of the securities
being registered by this Registration Statement, other than the underwriting
discounts and commissions. All amounts are estimated except the SEC
registration fee, the NASD filing fee, and the NASDAQ filing fee. The Selling
Stockholders will not bear any expenses of this offering other than the
underwriters' discount applicable to the shares sold by them.

<TABLE>
<S> <C>
SEC registration fee.......................................... $ 10,232
NASD filing fee............................................... 3,467
NASDAQ filing fee............................................. 30,000
Blue sky fees and expenses.................................... 10,000
Accounting fees and expense................................... 125,000
Legal fees and expenses....................................... 325,000
Printing and engraving........................................ 100,000
Registrar and transfer agent fees............................. 1,000
Miscellaneous................................................. 122,301
Financial consulting fee...................................... 273,000
----------
Total..................................................... $1,000,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article VII of the Registrant's Articles of Incorporation and Article X of
the Registrant's Bylaws provide that the Registrant's directors and officers
shall be indemnified against liabilities they may incur while serving in such
capacities to the fullest extent allowed by the Nevada General Corporation
Law. Under these indemnification provisions, the Registrant is required to
indemnify its directors and officers against any reasonable expenses
(including attorney fees) incurred by them in the defense of any action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, to
which they were made a party, or in defense of any claim, issue, or matter
therein, by reason of the fact that they are or were a director or officer of
the Registrant or while a director or officer of the Registrant are or were
serving at the Registrant's request as a director, officer, partner, trustee,
employee, or agent of another corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise unless it is ultimately determined
by a court of competent jurisdiction that they failed to act in a manner they
believed in good faith to be in, or not opposed to, the best interests of the
Registrant, and with respect to any criminal proceeding, had reasonable cause
to believe their conduct was lawful. The Registrant will advance expenses
incurred by directors or officers in defending any such action, suit, or
proceeding upon receipt of written confirmation from such officers or
directors that they have met certain standards of conduct and an undertaking
by or on behalf of such officers or directors to repay such advances if it is
ultimately determined that they are not entitled to indemnification by the
Registrant. The Registrant may, through indemnification agreements, insurance,
or otherwise, provide additional indemnification.

Article VI of the Registrant's Articles of Incorporation eliminates, to the
fullest extent permitted by law, the liability of directors and officers for
monetary or other damages for breach of fiduciary duties to the Registrant and
its stockholders as a director or officer.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Effective January 31, 1995, the Company issued an aggregate 2,513,697 shares
of Class A Common Stock and 1,000,000 shares of Class B Common Stock in the
following transactions that comprised a plan of tax-free transfers to a
controlled corporation pursuant to Section 351 of the Internal Revenue Code of
1986, as amended:

a. 1,269,080 shares of Class A Common Stock and 1,000,000 shares of Class
B Common Stock to William G. Smith and Marlys L. Smith, as joint tenants
with rights of survivorship, in exchange for: 100%

II-1
<PAGE>

of the capital stock of Wilmar Truck Leasing, Inc., an Iowa corporation,
which owned two tractors previously leased to the Registrant's operating
subsidiary; 7 tractors and 28 trailers previously leased to the
Registrant's operating subsidiary by Mr. Smith d/b/a Smith Leasing; 788,000
shares of common stock of Smithway Motor Xpress, Inc., an Iowa corporation;
and 100% of the capital stock of Smithway Transportation Brokerage, Inc.

b. 1,096,738 shares of Class A Common Stock to the Company's Employee
Stock Ownership Plan Trust in exchange for 444,987 shares of common stock
of Smithway Motor Xpress, Inc.

c. 147,879 shares of Class A Common Stock to G. Larry Owens in exchange
for 60,000 shares of common stock of Smithway Motor Xpress, Inc. Mr. Owens
had previously purchased the 60,000 shares of Smithway Motor Xpress, Inc.
common stock in May 1994 for $220,000 in a private offering.

For additional information regarding the stock issuances described above,
see "Acquisition of Related Companies and Holding Company Formation."

All shares were issued in private offerings, which did not involve the
public offer or sale of securities, in reliance upon the exemption from
registration afforded by Section 4(2) of the Securities Act. No underwriters,
brokers, or finders were involved in the above transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
1+++ Form of Underwriting Agreement.
2.1+ Exchange Agreement dated as of March 1, 1995, among William G. and
Marlys L. Smith, William G. Smith d/b/a Smith Leasing, G. Larry
Owens, Smithway Motor Xpress, Inc. Employee Stock Ownership Plan and
Trust, and Smithway Motor Xpress Corp., a Nevada corporation.
2.2++ Acquisition Agreement dated May 31, 1995, among Smithway Motor
Xpress, Inc., Van Tassel, Inc., Teresa Van Tassel, and Douglas Van
Tassel.
2.3++ Amendment No. 1 to Exchange Agreement dated as of June 29, 1995,
among William G. and Marlys L. Smith, William G. Smith d/b/a Smith
Leasing, G. Larry Owens, Smithway Motor Xpress, Inc. Employee Stock
Ownership Plan and Trust, and Smithway Motor Xpress Corp., a Nevada
corporation.
2.4++ Acquisition Agreement dated January 10, 1996, among Smithway Motor
Xpress, Inc., an Iowa Corporation, Smith Trucking Company, a Kansas
corporation, and Delmar Smith.
3.1+ Articles of Incorporation.
3.2+ Bylaws.
4.1+ Articles of Incorporation filed as Exhibit 3.1 to this Registration
Statement and incorporated herein by reference.
4.2+ Bylaws filed as Exhibit 3.2 to this Registration Statement and
incorporated herein by reference.
5+++ Opinion, including consent of Scudder Law Firm, P.C., counsel to
Smithway Motor Xpress, Inc., as to the legality of the securities
being registered.
10.1+ Omnitracs Contract dated January 5, 1995, between Qualcomm,
Incorporated and Smithway Motor Xpress, Inc., an Iowa corporation,
for communications equipment and services.
10.2+ Outside Director Stock Plan dated March 1, 1995.
10.3+ Incentive Stock Plan, adopted March 1, 1995.
10.4+ 401(k) Plan, adopted August 14, 1992, as amended.
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
10.5+ Employee Stock Ownership Plan and Trust adopted January 1, 1986, as
amended.
10.6+ Letter Agreement dated November 29, 1994, between Christenberry
Collet & Co. and Smithway Motor Xpress, Inc., an Iowa corporation,
concerning financial consulting.
10.7+ Memorandum of arrangement between Ray Stewart and Smithway Motor
Xpress, Inc., an Iowa corporation, concerning Spectrum software.
10.8+ Voting Trust Agreement dated March 1, 1995, among William G. and
Marlys L. Smith and Melissa Sue Osterberg, as Trustee.
10.9+ Exchange Agreement dated March 1, 1995, among William G. and Marlys
L. Smith, William G. Smith d/b/a Smith Leasing, G. Larry Owens,
Smithway Motor Xpress, Inc. Employee Stock Ownership Plan and Trust,
and Smithway Motor Xpress Corp., a Nevada corporation, filed as
Exhibit 2.1 to this Registration Statement and incorporated herein
by reference.
10.10+ Form of Agency Agreement between Smithway Motor Xpress, Inc. and its
independent commission agents.
10.11+ License Agreement dated November 29, 1993, between Smithway Motor
Xpress, Inc. and Rand McNally--TDM, Inc.
10.12+ Memorandum of officer incentive compensation policy.
10.13+ Offer to Buy Real Estate and Acceptance dated March 31, 1993,
between Smithway Motor Xpress, Inc. and William G. Smith.
10.14+ Form of Independent Contractor Agreement between Smithway Motor
Xpress, Inc. and its independent contractor providers of tractors.
10.15++ Amendment No. 1 to Exchange Agreement dated as of June 29, 1995,
among William G. and Marlys L. Smith, William G. Smith d/b/a Smith
Leasing, G. Larry Owens, Smithway Motor Xpress, Inc. Employee Stock
Ownership Plan and Trust, and Smithway Motor Xpress Corp., a Nevada
corporation, filed as Exhibit 2.3 to this Registration Statement and
incorporated by reference.
10.16++ Acquisition Agreement dated May 31, 1995, among Smithway Motor
Xpress, Inc., Van Tassel, Inc., Teresa Van Tassel, and Douglas Van
Tassel, filed as Exhibit 2.2 to this Registration Statement and
incorporated by this reference.
10.17++ Acquisition Agreement dated January 10, 1996, among Smithway Motor
Xpress, Inc., an Iowa Corporation, Smith Trucking Company, a Kansas
corporation, and Delmar Smith, filed as Exhibit 2.4 to this
Registration Statement and incorporated by reference.
16++ Letter regarding change in certifying accountant.
21+ List of subsidiaries.
23.1+++ Consent of Scudder Law Firm, P.C. (included in their opinion filed
as Exhibit 5 to this Registration Statement).
23.2 Consent of KPMG Peat Marwick LLP, independent accountants.
23.3 Consent of Denman & Company, L.L.P., independent accountants.
23.4+ Consents of G. Larry Owens, Robert E. Rich, and Herbert D. Ihle to
be named as director-nominees and to become members of the Board.
23.5++ Consent of Terry G. Christenberry to be named as a director-nominee
and to become a member of the Board.
24+ Power of Attorney.
</TABLE>
- --------

+Filed as an exhibit to Registration Statement on Form S-1 filed March 16,
1995, pursuant to Registration No. 33-90356.
++Filed as an exhibit to Amendment No. 1 to Registration Statement on Form S-1
filed April 18, 1996, pursuant to Registration No. 33-90356.
+++Filed as an exhibit to Amendment No. 2 to Registration Statement on Form S-
1 filed May 1, 1996, pursuant to Registration No. 33-90356.

II-3
<PAGE>

(b) FINANCIAL STATEMENT SCHEDULES

All schedules are omitted as the required information is inapplicable or the
information is presented in the consolidated financial statements or related
notes.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the provisions set forth in Item 14, or otherwise,
the Registrant has been advised in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Securities Act, and the Registrant will be governed by the final
adjudication of such issue.

The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement, certificates in such denominations
and registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.

The Registrant hereby undertakes that:

a. For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

b. For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and this offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 4 to Registration Statement on Form S-1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Fort Dodge, State of Iowa, on June 26, 1996.

SMITHWAY MOTOR XPRESS CORP.

/s/ William G. Smith
By: _________________________________
William G. Smith
Chairman of the Board, President,
and Chief Executive Officer

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
/s/ William G. Smith Chairman of the Board, June 26, 1996
____________________________________ President, Chief Executive
William G. Smith Officer, Director
(principal executive
officer)

/s/ Michael E. Oleson Treasurer and Chief June 26, 1996
____________________________________ Accounting Officer
Michael E. Oleson (principal financial and
accounting officer)

/s/ G. Larry Owens Executive Vice President and June 26, 1996
____________________________________ Chief Financial Officer
G. Larry Owens

</TABLE>

II-5
<PAGE>

EXHIBITS

<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
------ ----------- ----
<C> <S> <C>
1+++ Form of Underwriting Agreement.
2.1+ Exchange Agreement dated as of March 1, 1995, among William
G. and Marlys L. Smith, William G. Smith d/b/a Smith Leasing,
G. Larry Owens, Smithway Motor Xpress, Inc. Employee Stock
Ownership Plan and Trust, and Smithway Motor Xpress Corp., a
Nevada corporation.
2.2++ Acquisition Agreement dated May 31, 1995, among Smithway
Motor Xpress, Inc., Van Tassel, Inc., Teresa Van Tassel, and
Douglas Van Tassel.
2.3++ Amendment No. 1 to Exchange Agreement dated as of June 29,
1995, among William G. and Marlys L. Smith, William G. Smith
d/b/a Smith Leasing, G. Larry Owens, Smithway Motor Xpress,
Inc. Employee Stock Ownership Plan and Trust, and Smithway
Motor Xpress Corp., a Nevada corporation.
2.4++ Acquisition Agreement dated January 10, 1996, among Smithway
Motor Xpress, Inc., an Iowa Corporation, Smith Trucking
Company, a Kansas corporation, and Delmar Smith.
3.1+ Articles of Incorporation.
3.2+ Bylaws.
4.1+ Articles of Incorporation filed as Exhibit 3.1 to this
Registration Statement and incorporated herein by reference.
4.2+ Bylaws filed as Exhibit 3.2 to this Registration Statement
and incorporated herein by reference.
5+++ Opinion, including consent of Scudder Law Firm, P.C., counsel
to Smithway Motor Xpress, Inc., as to the legality of the
securities being registered.
10.1+ Omnitracs Contract dated January 5, 1995, between Qualcomm,
Incorporated and Smithway Motor Xpress, Inc., an Iowa
corporation, for communications equipment and services.
10.2+ Outside Director Stock Plan dated March 1, 1995.
10.3+ Incentive Stock Plan, adopted March 1, 1995.
10.4+ 401(k) Plan, adopted August 14, 1992, as amended.
10.5+ Employee Stock Ownership Plan and Trust adopted January 1,
1986, as amended.
10.6+ Letter Agreement dated November 29, 1994, between
Christenberry Collet & Co. and Smithway Motor Xpress, Inc.,
an Iowa corporation, concerning financial consulting.
10.7+ Memorandum of arrangement between Ray Stewart and Smithway
Motor Xpress, Inc., an Iowa corporation, concerning Spectrum
software.
10.8+ Voting Trust Agreement dated March 1, 1995, among William G.
and Marlys L. Smith and Melissa Sue Osterberg, as Trustee.
10.9+ Exchange Agreement dated March 1, 1995, among William G. and
Marlys L. Smith, William G. Smith d/b/a Smith Leasing, G.
Larry Owens, Smithway Motor Xpress, Inc. Employee Stock
Ownership Plan and Trust, and Smithway Motor Xpress Corp., a
Nevada corporation, filed as Exhibit 2.1 to this Registration
Statement and incorporated herein by reference.
10.10+ Form of Agency Agreement between Smithway Motor Xpress, Inc.
and its independent commission agents.
10.11+ License Agreement dated November 29, 1993, between Smithway
Motor Xpress, Inc. and Rand McNally--TDM, Inc.
10.12+ Memorandum of officer incentive compensation policy.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
------ ----------- ----
<C> <S> <C>
10.13+ Offer to Buy Real Estate and Acceptance dated March 31, 1993,
between Smithway Motor Xpress, Inc. and William G. Smith.
10.14+ Form of Independent Contractor Agreement between Smithway
Motor Xpress, Inc. and its independent contractor providers
of tractors.
10.15++ Amendment No. 1 to Exchange Agreement dated as of June 29,
1995, among William G. and Marlys L. Smith, William G. Smith
d/b/a Smith Leasing, G. Larry Owens, Smithway Motor Xpress,
Inc. Employee Stock Ownership Plan and Trust, and Smithway
Motor Xpress Corp., a Nevada corporation, filed as Exhibit
2.3 to this Registration Statement and incorporated by
reference.
10.16++ Acquisition Agreement dated May 31, 1995, among Smithway
Motor Xpress, Inc., Van Tassel, Inc., Teresa Van Tassel, and
Douglas Van Tassel, filed as Exhibit 2.2 to this Registration
Statement and incorporated by this reference.
10.17++ Acquisition Agreement dated January 10, 1996, among Smithway
Motor Xpress, Inc., an Iowa Corporation, Smith Trucking
Company, a Kansas corporation, and Delmar Smith, filed as
Exhibit 2.4 to this Registration Statement and incorporated
by reference.
16++ Letter regarding change in certifying accountant.
21+ List of subsidiaries.
23.1+++ Consent of Scudder Law Firm, P.C. (included in their opinion
filed as Exhibit 5 to this Registration Statement).
23.2 Consent of KPMG Peat Marwick LLP, independent accountants.
23.3 Consent of Denman & Company, L.L.P., independent accountants.
23.4+ Consents of G. Larry Owens, Robert E. Rich, and Herbert D.
Ihle to be named as director-nominees and to become members
of the Board.
23.5++ Consent of Terry G. Christenberry to be named as a director-
nominee and to become a member of the Board.
24+ Power of Attorney.
</TABLE>
- --------
+Filed as an exhibit to Registration Statement on Form S-1 filed March 16,
1995 pursuant to Registration No. 33-90356.

++Filed as an exhibit to Amendment No. 1 to Registration Statement on Form S-1
filed April 18, 1996, pursuant to Registration No. 33-90356.
+++Filed as an exhibit to Amendment No. 2 to Registration Statement on Form S-
1 filed May 1, 1996, pursuant to Registration No. 33-90356.

<PAGE>

EXHIBIT 23.2

INDEPENDENT ACCOUNTANTS' CONSENT

The Board of Directors
Smithway Motor Xpress Corp.:

We consent to the use of our report included herein and to the reference to
our firm under the headings "Selected Consolidated Financial and Operating
Data" and "Experts" in the prospectus.

KPMG Peat Marwick LLP

Des Moines, Iowa
June 26, 1996

<PAGE>

EXHIBIT 23.3

INDEPENDENT ACCOUNTANTS' CONSENT

The Board of Directors
Smithway Motor Xpress Corp.:

We consent to the use of our report included herein and to the reference to
our firm under the headings "Selected Consolidated Financial and Operating
Data" and "Experts" in the prospectus.

Denman & Company, L.L.P.

West Des Moines, Iowa
June 26, 1996