SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
-----------------------------------------------------
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission File Number 0-20793
Smithway Motor Xpress Corp.
(Exact name of registrant as specified in its charter)
Nevada 42-1433844
(State or other jurisdiction (I.R.S. employer identification number)
of incorporation or organization)
2031 Quail Avenue
Fort Dodge, Iowa 50501
(515) 576-7418
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
YES X NO_____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (May 5, 2000).
Class A Common Stock, $.01 par value: 4,010,640 shares
Class B Common Stock, $.01 par value: 1,000,000 shares
Exhibit Index is on Page 12-13.
Page 1
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PART I
FINANCIAL INFORMATION
PAGE
NUMBER
Item 1. Financial Statements............................................. 3-7
Condensed Consolidated Balance Sheets as of
December 31, 1999 and March 31, 2000 (unaudited)............... 3-4
Condensed Consolidated Statements of Earnings for the
three months ended March 31, 1999 and 2000 (unaudited)......... 5
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 1999 and 2000 (unaudited)......... 6
Notes to Condensed Consolidated Financial
Statements (unaudited)......................................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................. 8-11
Item 3. Quantitative and Qualitative Disclosures About Market Risks..... 11
PART II
OTHER INFORMATION
Item 1. Legal Proceedings................................................ 11
Item 2. Changes in Securities and Use of Proceeds........................ 11
Item 3. Defaults Upon Senior Securities.................................. 11
Item 4. Submission of Matters to a Vote of Security Holders.............. 11
Item 5. Other Information................................................ 11
Item 6. Exhibits and Reports on Form 8-K................................. 12-13
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements. Statements by the
Company in press releases, public filings, and stockholder reports, as well as
oral public statements by Company representatives, also may contain certain
forward-looking information. Forward-looking information is subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. Without limitation, these risks and uncertainties include
economic factors such as recessions, downturns in customers' business cycles,
surplus inventories, inflation, higher interest rates, and fuel price increases;
the resale value of the Company's used revenue equipment; the availability and
compensation of qualified drivers and owner-operators; competition from
trucking, rail, and intermodal competitors; and the availability of desirable
target companies and financing for acquisitions. Readers should review and
consider the various disclosures made by the Company in its press releases,
stockholder reports, and public filings, as well as the factors explained in
greater detail in the Company's annual report on Form 10-K.
Page 2
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PART I
FINANCIAL INFORMATION
SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------------ ------------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents..................................................$ 685 $ 171
Receivables:
Trade................................................................... 17,928 21,406
Other................................................................... 1,599 2,266
Recoverable income taxes................................................ 1,021 190
Inventories................................................................ 1,611 1,630
Deposits, primarily with insurers.......................................... 281 243
Prepaid expenses........................................................... 579 1,692
Deferred income taxes...................................................... 1,111 1,091
------------------ ------------------
Total current assets................................................. 24,815 28,689
------------------ ------------------
Property and equipment:
Land....................................................................... 1,081 1,456
Buildings and improvements................................................. 6,865 7,298
Tractors................................................................... 74,004 75,595
Trailers................................................................... 42,054 42,001
Other equipment............................................................ 6,765 6,871
------------------ ------------------
130,769 133,221
Less accumulated depreciation.............................................. 36,464 40,478
------------------ ------------------
Net property and equipment........................................... 94,305 92,743
------------------ ------------------
Intangible assets, net........................................................ 5,650 5,546
Other assets.................................................................. 244 250
------------------ ------------------
$ 125,014 $ 127,228
================== ==================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------------ ------------------
(unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt.......................................$ 8,530 $ 8,093
Accounts payable........................................................... 4,962 6,291
Accrued compensation....................................................... 2,436 3,084
Accrued loss reserves...................................................... 2,540 2,489
Other accrued expenses..................................................... 1,188 967
------------------ ------------------
Total current liabilities............................................ 19,656 20,924
Long-term debt, less current maturities....................................... 50,985 51,551
Deferred income taxes......................................................... 14,865 15,109
------------------ ------------------
Total liabilities.................................................... 85,506 87,584
------------------ ------------------
Stockholders' equity:
Preferred stock............................................................ - -
Common stock:
Class A................................................................. 40 40
Class B................................................................. 10 10
Additional paid-in capital................................................. 11,414 11,413
Retained earnings.......................................................... 28,044 28,282
Reacquired shares, at cost................................................. - (101)
------------------ ------------------
Total stockholders' equity........................................... 39,508 39,644
------------------ ------------------
$ 125,014 $ 127,228
================== ==================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1999 2000
------------- --------------
<S> <C> <C
Operating revenue:
Freight........................................$ 47,206 $ 50,579
Other.......................................... 89 169
------------- --------------
Operating revenue.......................... 47,295 50,748
------------- --------------
Operating expenses:
Purchased transportation....................... 18,889 19,974
Compensation and employee benefits............. 11,720 13,309
Fuel, supplies, and maintenance................ 5,518 7,264
Insurance and claims........................... 1,240 798
Taxes and licenses............................. 991 918
General and administrative..................... 1,723 1,891
Communications and utilities................... 578 526
Depreciation and amortization.................. 3,486 4,549
------------- --------------
Total operating expenses................... 44,145 49,229
------------- --------------
Earnings from operations.............. 3,150 1,519
Financial (expense) income
Interest expense............................... (954) (1,015)
Interest income................................ 41 17
------------- --------------
Earnings before income taxes.......... 2,237 521
Income taxes....................................... 933 283
------------- --------------
Net earnings..........................$ 1,304 $ 238
============= ==============
Basic and diluted earnings per common share........$ 0.26 0.05
============= ==============
Basic weighted average common shares outstanding... 5,020,892 5,020,464
Common stock options and awards................ 748 -
------------- --------------
Diluted weighted average common shares outstanding. 5,021,640 5,020,464
============= ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5
<PAGE>
SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1999 2000
-------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings.......................................................................$ 1,304 $ 238
-------------- ---------------
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization.................................................... 3,486 4,549
Deferred income taxes............................................................ 750 264
Stock bonuses.................................................................... 76 58
Changes in:
Receivables.................................................................... (3,628) (4,145)
Inventories.................................................................... 10 (19)
Deposits, primarily with insurers.............................................. (23) 38
Prepaid expenses............................................................... (844) (1,113)
Accounts payable and other accrued liabilities................................. 3,593 2,536
-------------- ---------------
Total adjustments............................................................. 3,420 2,168
-------------- ---------------
Net cash provided by operating activities..................................... 4,724 2,406
-------------- ---------------
Cash flows from investing activities:
Purchase of property and equipment................................................. (2,471) (1,328)
Proceeds from the sale of property and equipment................................... 891 200
Other ............................................................................. 100 (6)
-------------- ---------------
Net cash used in investing activities......................................... (1,480) (1,134)
-------------- ---------------
Cash flows from financing activities:
Proceeds from long-term debt....................................................... - 5,700
Principal payments on long-term debt............................................... (2,986) (7,326)
Payments for reacquired shares..................................................... - (160)
-------------- ---------------
Net cash used in financing activities......................................... (2,986) (1,786)
-------------- ---------------
Net increase (decrease) in cash and cash equivalents.......................... 258 (514)
Cash and cash equivalents at beginning of period..................................... 1,276 685
-------------- ---------------
Cash and cash equivalents at end of period...........................................$ 1,534 $ 171
============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest......................................................................$ 717 $ 851
Income taxes.................................................................. 29 (812)
============== ===============
Supplemental schedules of noncash investing and financing activities:
Notes payable issued for tractors and trailers................................$ 2,257 $ 1,755
Issuance of stock bonuses..................................................... 76 58
============== ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 6
<PAGE>
SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The condensed consolidated financial statements include the accounts of
Smithway Motor Xpress Corp., a Nevada holding company, and its four wholly
owned subsidiaries. All significant intercompany balances and transactions
have been eliminated in consolidation.
The condensed consolidated financial statements have been prepared, without
audit, in accordance with generally accepted accounting principles,
pursuant to the published rules and regulations of the Securities and
Exchange Commission. In the opinion of management, the accompanying
condensed consolidated financial statements include all adjustments which
are necessary for a fair presentation of the results for the interim
periods presented, such adjustments being of a normal recurring nature.
Certain information and footnote disclosures have been condensed or omitted
pursuant to such rules and regulations. The December 31, 1999 Condensed
Consolidated Balance Sheet was derived from the audited balance sheet of
the Company for the year then ended. It is suggested that these condensed
consolidated financial statements and notes thereto be read in conjunction
with the consolidated financial statements and notes thereto included in
the Company's Form 10-K for the year ended December 31, 1999. Results of
operations in interim periods are not necessarily indicative of results to
be expected for a full year.
Note 2. Effect of New Accounting Standards
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended by SFAS No. 137,
will be effective for the Company for the year beginning January 1, 2001.
Management is evaluating the impact the adoption of SFAS No. 133 will have
on the Company's consolidated financial statements. The Company expects to
adopt SFAS No. 133 when required.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The Company's fiscal year ends on December31 of each year. Thus, this
report discusses the first quarter of the Company's 1999 and 2000 fiscal years.
The Company has expanded its operations substantially over the past three
years through a combination of internal growth and acquisitions. For the three
months ended March 31, 2000, operating revenue increased 7.3% to $50.7 million
from $47.3 million during the same quarter in 1999. Net earnings were $238,000,
or $0.05 per diluted share, compared with $1.3 million, or $0.26 per diluted
share, during the 1999 quarter.
The Company operates a tractor-trailer fleet comprised of both
Company-owned vehicles and vehicles obtained under leases from independent
contractors and third-party finance companies. Fluctuations among expense
categories may occur as a result of changes in the relative percentage of the
fleet obtained through equipment that is owned versus equipment that is leased
from independent contractors or financing sources. Costs associated with revenue
equipment acquired under operating leases or through agreements with independent
contractors are expensed as "purchased transportation." For these categories of
equipment the Company does not incur costs such as interest and depreciation as
it might with owned equipment. In addition, independent contractor tractors,
driver compensation, fuel, communications, and certain other expenses are borne
by the independent contractors and are not incurred by the Company. Obtaining
equipment from independent contractors and under operating leases reduces
capital expenditures and on-balance sheet leverage and effectively shifts
expenses from interest to "above the line" operating expenses. The fleet profile
of acquired companies and the Company's relative recruiting and retention
success with Company-employed drivers and independent contractors will cause
fluctuations from time-to-time in the percentage of the Company's fleet that is
owned versus obtained from independent contractors and under operating
leases.(*)
Results of Operations
The following table sets forth the percentage relationship of certain items
to operating revenue for the three months ended March 31, 1999 and 2000:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 2000
----------- -----------
<S> <C> <C>
Operating revenue......................................... 100.0% 100.0%
Operating expenses
Purchased transportation................................ 39.9 39.4
Compensation and employee benefits...................... 24.8 26.2
Fuel, supplies, and maintenance......................... 11.7 14.3
Insurance and claims.................................... 2.6 1.6
Taxes and licenses...................................... 2.1 1.8
General and administrative.............................. 3.6 3.7
Communications and utilities............................ 1.2 1.0
Depreciation and amortization........................... 7.4 9.0
----------- -----------
Total operating expenses.............................. 93.3 97.0
----------- -----------
Earnings from operations.................................. 6.7 3.0
Interest expense (net).................................... (1.9) (2.0)
----------- -----------
Earnings before income taxes.............................. 4.8 1.0
Income taxes.............................................. 2.0 0.6
----------- -----------
Net earnings.............................................. 2.8% 0.5%
=========== ===========
</TABLE>
Comparison of three months ended March 31, 2000 with three months ended March
31, 1999
Operating revenue increased $3.5 million (7.3%) to $50.7 million during the
2000 quarter from $47.3 million during the 1999 quarter. A substantial increase
in fuel surcharge revenue, a slight increase in freight rates, and expanded
Page 8
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business with existing customers contributed to the Company's revenue growth.
Weighted average tractors increased slightly to 1,538 during the 2000 quarter
from 1,529 during the 1999 quarter. Average revenue per tractor per week
(excluding revenue from brokerage operations) increased to $2,323 during the
2000 quarter from $2,225 during the 1999 quarter, primarily due to an increase
in revenue per loaded mile, net of surcharges, to $1.33 in the 2000 quarter from
$1.31 in the 1999 quarter.
Purchased transportation increased $1.1 million (5.7%) to $20.0 million in
the 2000 quarter from $18.9 million in the 1999 quarter primarily due to the
payment of fuel surcharges to independent contractors. As a percentage of
revenue, purchased transportation decreased to 39.4% of revenue in the 2000
quarter from 39.9% in the 1999 quarter. This reflects a decrease in the
percentage of the Company's fleet supplied by independent contractors which was
partially offset by an increase in the percentage of revenue paid to the
independent contractors for fuel surcharges.
Compensation and employee benefits increased $1.6 million (13.6%) to $13.3
million in the 2000 quarter from $11.7 million in the 1999 quarter. As a
percentage of revenue, compensation and employee benefits increased to 26.2% of
revenue in the 2000 quarter from 24.8% in the 1999 quarter. The increase was
primarily attributable to the increase in the per-mile wage paid to flatbed
drivers which occurred in the fourth quarter of 1999.
Fuel, supplies, and maintenance increased $1.7 million (31.6%) to $7.3
million in the 2000 quarter from $5.5 million in the 1999 quarter. As a
percentage of revenue, fuel, supplies, and maintenance increased to 14.3% of
revenue for the 2000 quarter compared with 11.7% for the 1999 quarter. This was
the result of a 44% increase in average fuel costs to $1.38 per gallon during
the 2000 quarter from $0.96 per gallon during the 1999 quarter, which was
partially offset by fuel hedging transactions. The Company is attempting to
recover increases in fuel prices through fuel surcharges and higher rates,
however, recent fuel price increases will not be fully offset through these
measures. Going forward, the Company's fuel hedging positions cover less fuel
than in 1999 and expire in June 2000.
Insurance and claims decreased $442,000 (35.6%) to $798,000 in the 2000
quarter from $1.2 million in the 1999 quarter. As a percentage of revenue,
insurance and claims decreased to 1.6% of revenue for the 2000 quarter compared
with 2.6% for the 1999 quarter. The decrease was attributable to a decrease in
liability and physical damage claims paid and reserved.
Taxes and licenses decreased $73,000 (7.4%) to $918,000 in the 2000 quarter
from $991,000 in the 1999 quarter reflecting a decrease in the number of
shipments requiring special permits during the 2000 quarter. As a percentage of
revenue, taxes and licenses decreased slightly to 1.8% of revenue for the 2000
quarter compared with 2.1% for the 1999 quarter.
General and administrative expenses increased $168,000 (9.8%) to $1.9
million in the 2000 quarter from $1.7 million in the 1999 quarter. As a
percentage of revenue, general and administrative expenses remained essentially
constant at 3.7% of revenue in the 2000 quarter and 3.6% in the 1999 quarter.
Communications and utilities decreased $52,000 (9.0%) to $526,000 in the
2000 quarter from $578,000 in the 1999 quarter. As a percentage of revenue,
communications and utilities decreased slightly to 1.0% of revenue for the 2000
quarter compared with 1.2% for the 1999 quarter due to renegotiated long
distance telephone service contracts.
Depreciation and amortization increased $1.1 million (30.5%) to $4.5
million in the 2000 quarter from $3.5 million in the 1999 quarter. As a
percentage of revenue, depreciation and amortization increased to 9.0% of
revenue in the 2000 quarter from 7.4% in the 1999 quarter reflecting lower gains
on sales of equipment, a larger fleet of Company-owned tractors and trailers,
which increased the cost of equipment being depreciated, and an increase in the
number of Company-owned tractors, trailers, and satellite communications units
financed with debt rather than operating leases.
Interest expense (net) increased $85,000 (9.3%) to $998,000 in the 2000
quarter from $913,000 in the 1999 quarter. As a percentage of revenue, interest
expense (net) remained essentially constant at 2.0% of revenue in the 2000
quarter and 1.9% in the 1999 quarter.
As a result of the foregoing, the Company's pretax margin decreased to 1.0%
in the 2000 quarter from 4.8% in the 1999 quarter.
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The Company's effective tax rate was 54.3% for the 2000 quarter and 41.7%
for the 1999 quarter. The effective tax rate is higher than the expected
combined tax rate for a company headquartered in Iowa because of the cost of
nondeductible driver per diem expense absorbed by the Company. The impact of the
Company's paying per diem travel expenses varies depending upon the ratio of
drivers to independent contractors and the Company's pretax earnings. At the
Company's low earnings level for the quarter, nondeductible per diem travel
expenses comprised a larger portion of pretax earnings, effectively increasing
the tax rate during the quarter.
As a result of the factors described above, net earnings decreased to
$238,000 (0.5% of revenue) in the 2000 quarter from $1.3 million (2.8% of
revenue) in the 1999 quarter.
Liquidity and Capital Resources
The growth of the Company's business has required significant investments
in new revenue equipment that the Company has financed in recent years with
borrowings under installment notes payable to commercial lending institutions
and equipment manufacturers, borrowings under lines of credit, cash flow from
operations, and equipment leases from third-party lessors. The Company also has
obtained a portion of its revenue equipment fleet from independent contractors
who own and operate the equipment, which reduces overall capital expenditure
requirements compared with providing a fleet of entirely Company-owned
equipment. The Company's primary sources of liquidity currently are funds
provided by operations and borrowings under credit agreements with financial
institutions and equipment manufacturers. Management believes that its sources
of liquidity are adequate to meet its currently anticipated working capital
requirements, capital expenditures, and other needs at least through 2000.(*)
Net cash provided by operating activities was $2.4 million for the three
months ended March 31, 2000. The primary sources of cash from operations were
net earnings of $238,000 increased by $4.5 million in depreciation and
amortization, and a $2.5 million increase in accounts payable and other accrued
liabilities. The Company's principal uses of cash from operations are to service
debt and internally finance accounts receivable associated with growth in the
business. Customer accounts receivable increased $4.1 million for the three
months ended March 31, 2000. The average age of the Company's accounts
receivable was approximately 35.6 days for the 2000 period versus 32.8 days for
the 1999 period.
Net cash used in investing activities of $1.1 million in the 2000 period
related primarily to purchases, sales, and trades of revenue equipment. The
Company expects capital expenditures (primarily for revenue equipment and
satellite communications units), net of revenue equipment trade-ins, to be
approximately $19 million during the remaining nine months of 2000. Such
projected capital expenditures will be funded with a combination of cash flow
from operations, borrowings, and operating leases. The Company continues to
evaluate the need to expand its present headquarters facility and may incur a
portion of the expansion costs in 2000. The size and cost of the possible
expansion has not yet been determined. The Company's projected capital
expenditures do not include any amount for this possible expansion.(*)
Net cash used in financing activities of $1.8 million for the three months
ended March 31, 2000, consisted primarily of principal payments, net of
borrowings, made under the Company's long-term debt obligations.
At March 31, 2000, the Company had outstanding long-term debt (including
current maturities) of approximately $59.6 million, most of which was comprised
of obligations for the purchase of revenue equipment. Approximately $33.4
million consisted of borrowings from financial institutions and equipment
manufacturers, $26 million represented the amount drawn under the Company's
revolving credit facility, and $205,000 represented future payments for
purchases of intangible assets. Interest rates on this debt range from 5.81% to
8.5% with maturities through 2005.
At March 31, 2000, the revolving credit facility provided for borrowings of
up to $40.0 million, based upon certain accounts receivable and revenue
equipment values. Based upon the borrowing levels at March 31, 2000, the Company
had $12.0 million of remaining borrowing capacity under this credit facility.
The interest rate under the credit facility is currently 1.5% plus the LIBOR
rate for the corresponding period. The credit facility is secured and contains
covenants that impose certain minimum financial ratios and limit additional
liens, the size of certain mergers and acquisitions, dividends, and other
matters. The Company was in compliance with the terms of the credit facility at
March 31, 2000.
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Year 2000
To date, the Company's information and non information systems have
experienced no adverse impact from the transition to the Year 2000. In addition,
the Company is not aware of any material Year 2000 related issues with any of
its shippers, suppliers, or other third parties with whom it has business
relationships. The Company does not expect to incur any significant additional
costs relating to Year 2000 issues.(*)
Quantitative and Qualitative Disclosures About Market Risks
The Company is exposed to market risks from changes in (i) certain interest
rates on its debt and (ii) certain commodity prices.
Interest Rate Risk
The revolving credit facility, provided there has been no default, carries
a maximum variable interest rate of LIBOR for the corresponding period plus
1.5%. This variable interest exposes the Company to the risk that interest rates
may rise. Most of the Company's other debt carries fixed interest rates and
exposes the Company to the risk that interest rates may fall. At March 31, 2000,
approximately 52.6% of the Company's debt carries a variable interest rate and
the remainder is fixed.
Commodity Price Risk
The Company uses derivative instruments, including heating oil price swap
agreements, to reduce a portion of its exposure to fuel price fluctuations.
Since the Company's price is fixed for these agreements, changes in fuel prices
would have no impact on the Company's future fuel expense related to these price
swap agreements. Therefore, there is no earnings or liquidity risk associated
with these price swap agreements.
The Company does not trade in these derivatives with the objective of
earning financial gains on price fluctuations, nor does it trade in these
instruments when there are no underlying transaction related exposures.
Through March 31, 2000, there have been no material changes in the amount
or nature of the Company's derivative instruments. All of the Company's fuel
hedging agreements expire by June 30, 2000.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
No reportable events or material changes occurred during the quarter
for which this report is filed.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
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Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit Description
Number
2.1 ++++ Asset Purchase Agreement dated September 23, 1998, by
and among Smithway Motor Xpress, Inc., JHT,
Inc., JHT LOGISTICS, INC., Bass Brook Truck
Service, Inc., and JERDON TERMINAL HOLDINGS, LLC.
2.2 ++++ First Amendment to Asset Purchase Agreement dated
October 29, 1998, by and among Smithway Motor Xpress,
Inc., JHT, Inc., JHT LOGISTICS, INC., Bass Brook
Truck Service, Inc., and JERDON TERMINAL HOLDINGS, LLC.
2.3 * Second Amendment to Asset Purchase Agreement dated
October 30, 1998, by and among Smithway Motor Xpress,
Inc., JHT, Inc., JHT LOGISTICS, INC., Bass Brook Truck
Service, Inc., and JERDON TERMINAL HOLDINGS, LLC.
3.1 + Articles of Incorporation.
3.2 + Bylaws.
4.1 + Articles of Incorporation.
4.2 + Bylaws.
10.1 + Outside Director Stock Plan dated March 1, 1995.
10.2 + Incentive Stock Plan adopted March 1, 1995.
10.3 + 401(k) Plan adopted August 14, 1992, as amended.
10.4 + Form of Agency Agreement between Smithway Motor Xpress,
Inc. and its independent commission agents.
10.5 + Memorandum of officer incentive compensation policy.
10.6 + Form of Independent Contractor Agreement between
Smithway Motor Xpress, Inc. and its independent
contractor providers of tractors.
10.7 ++ Credit Agreement dated September 3, 1997,
between Smithway Motor Xpress Corp., as Guarantor,
Smithway Motor Xpress, Inc., as Borrower, and
LaSalle National Bank.
10.8 +++ First Amendment to Credit Agreement dated March 1,
1998, between Smithway Motor Xpress Corp., as
Guarantor, Smithway Motor Xpress, Inc., as
Borrower, and LaSalle National Bank.
10.9 +++ Second Amendment to Credit Agreement dated March 15,
1998, between Smithway Motor Xpress Corp., as
Guarantor, Smithway Motor Xpress, Inc., as
Borrower, and LaSalle National Bank.
10.10 ++++ Asset Purchase Agreement dated September 23, 1998, by
and among Smithway Motor Xpress, Inc., JHT, Inc.,
JHT LOGISTICS, INC., Bass Brook Truck Service, Inc.,
and JERDON TERMINAL HOLDINGS, LLC.
10.11 ++++ First Amendment to Asset Purchase Agreement dated
October 29, 1998, by and among Smithway Motor Xpress,
Inc., JHT, Inc., JHT LOGISTICS, INC., Bass Brook Truck
Service, Inc., and JERDON TERMINAL HOLDINGS, LLC.
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10.12 * Second Amendment to Asset Purchase Agreement dated
October 30, 1998, by and among Smithway Motor Xpress,
Inc., JHT, Inc., JHT LOGISTICS, INC., Bass Brook Truck
Service, Inc., and JERDON TERMINAL HOLDINGS, LLC.
10.13 * Third Amendment to Credit Agreement dated October 30,
1998, between Smithway Motor Xpress Corp.,
as Guarantor, Smithway Motor Xpress, Inc., as Borrower,
and LaSalle National Bank, as Lender.
10.14 ** Amendment No. 2 to Smithway Motor Xpress Corp.
Incentive Stock Plan, adopted May 7, 1999.
10.15 *** Fourth Amendment to Credit Agreement dated August 20,
1999, between Smithway Motor Xpress Corp., as
Guarantor, Smithway Motor Xpress, Inc., as Borrower,
and LaSalle National Bank.
10.16 **** Fifth Amendment to Credit Agreement dated December 17,
1999, between Smithway Motor Xpress Corp., as
Guarantor, Smithway Motor Xpress, Inc., as Borrower,
and LaSalle National Bank.
10.17 # 1997 Profit Incentive Plan, adopted May 8, 1997.
27 # Financial Data Schedule.
________________
+ Incorporated by reference from the Company's Registration Statement on
Form S-1, Registration No. 33-90356, effective June 27, 1996.
++ Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997. Commission
File No. 000-20793, dated November 12, 1997.
+++ Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the period ended March 31, 1998. Commission File
No. 000-20793, dated May 14, 1998.
++++ Incorporated by reference from the Company's Form 8-K. Commission
File No. 000-20793, dated November 12, 1998.
* Incorporated by reference from the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998. Commission File
No. 000-20793, dated March 18, 1999.
** Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1999. Commission File
No. 000-20793, dated August 13, 1999.
*** Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1999. Commission File
No. 000-20793, dated November 10, 1999.
**** Incorporated by reference from the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999. Commission File No.
000-20793, dated March 29, 2000.
# Filed herewith.
(b) Reports on Form 8-K.
None.
Page 13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SMITHWAY MOTOR XPRESS CORP.,
a Nevada corporation
Date: May 5, 2000 By: /s/Michael E. Oleson
Michael E. Oleson
Treasurer and Chief Accounting Officer
Page 14
SMITHWAY MOTOR XPRESS CORP.
1997 PROFIT INCENTIVE PLAN
1. Purpose. The purpose of this Profit Incentive Plan (the "Plan") is to
provide a reward for past service and an incentive for future service for
selected employees of Smithway Motor Xpress Corp. and its subsidiary (the
"Company").
2. Definitions. Capitalized terms used in this Plan and not otherwise
defined shall have the following meanings:
2.1 "Common Stock" means shares of the Company's Class A Common Stock.
2.2 "Designated Percentage" means the percentage of the Company's
consolidated net earnings as determined from time-to-time by the Administrator.
The Designated Percentage shall be one and one-half percent (1.5%) unless the
Administrator (as hereinafter defined) takes affirmative action to change the
Designated Percentage for a given fiscal year in response to extraordinary
positive or negative results or expansion in the number of Participants (as
hereinafter defined).
2.3 "Fair Market Value" means:
2.3.1 If the Common Stock is not at the time listed or admitted to trading
on a stock exchange, the mean between the lowest reported bid price and the
highest reported asked price of the Common Stock in the over-the-counter market,
as such prices are reported by The Nasdaq Stock Market or in a publication of
general circulation selected by the Board and regularly reporting the market
price of the Common Stock in such market;
2.3.2 If the Common Stock is at the time listed or admitted to trading on
any stock exchange, the mean between the lowest and highest reported sales price
of the Common Stock on the principal exchange on which the Common Stock is then
listed or admitted to trading; or
2.3.3 If no reported quotation or sale of Common Stock takes place on the
date in question, the last reported closing asked price or sales price of the
Common Stock prior to the Distribution Date shall be determinative.
2.4 "Incentive Pool" means the number of shares of Common Stock, based upon
the Designated Percentage, that shall be set aside for distribution to
Participants hereunder.
2.5 "Participants" mean the employees of the Company selected by the
Administrator in accordance with Section 4 hereof.
2.6 "Percentage" means the proportion of the Incentive Pool as determined
by the Administrator a Participant shall be entitled to receive as provided
herein.
3. Administration of Plan. The Plan shall be administered by the Board of
Directors or a committee hereafter designated by the Board of Directors (the
"Administrator").
<PAGE>
4. Participants and Percentages. The Administrator shall have sole
discretion to select Participants, allocate Percentages among Participants,
reallocate Percentages among Participants from time-to-time, adjust the
Incentive Pool to reflect extraordinary positive or negative performance by the
Company, distribute Common Stock to Participants, and otherwise administer the
Plan. During or by May 31 immediately following each fiscal year the Plan
remains in effect, the Administrator shall select and inform Participants of
their participation in the Plan for such fiscal year. By May 31 following each
fiscal year the Plan remains in effect, the Administrator shall take all other
actions required to deliver shares of Common Stock to such Participants,
including, but not limited to, determining the number of shares in the Incentive
Pool and each Participant's Percentage.
5. Amount of Distribution. In accordance with Section 4 hereof, for each
full fiscal year for which the Plan continues, the Company shall set aside, for
delivery to Participants in accordance with their respective Percentages, a
number of shares of Common Stock having a Fair Market Value on the Distribution
Date (as hereinafter defined) equal to the Designated Percentage of the
Company's consolidated net earnings for the applicable fiscal year.
Notwithstanding the foregoing, no fractional shares shall be issued to the
Participants under this Plan and the Company in its reasonable judgment may
withhold sufficient shares from any distribution to cover withholding
obligations. The consolidated net earnings of the Company shall be determined in
accordance with generally accepted accounting principles consistently applied by
the firm of independent public accountants employed to audit the books and
accounts of the Company for that year, and the determinations of such
accountants shall be final, binding, and conclusive upon the Company and all
other persons who may at any time have any interest under the Plan. Each
Participant shall receive his or her distribution of Common Stock on the
Distribution Date.
6. Time of distribution. The distribution for any fiscal year shall be made
after the close of the fiscal year but not later than May 31 (the "Distribution
Date").
7. Limitations. Absent affirmative action by the Administrator, no
Participant whose employment is terminated prior to the Distribution Date shall
have any right to participate in the Plan or be eligible for any portion of a
distribution. No rights shall be deemed to accrue to any Participant and no
person shall, because of the Plan, acquire any right to an accounting or to
examine into the books or the affairs of the Company. No Participant shall have
a contract or verbal right in or to any amounts to be distributed under this
Plan until the Distribution Date. The interest of any Participant under this
Plan shall not be assignable either by voluntary or involuntary assignment or by
operation of law.
8. Effective Date, Amendment, or Termination. This Plan shall be effective
for the fiscal year commencing January 1, 1997. The Board reserves the right at
any time to make such changes in the Plan as it may consider desirable or may
discontinue or terminate the Plan at any time.
In Witness Whereof, Smithway Motor Xpress Corp., a Nevada corporation, has
caused this instrument to be executed as of May 8, 1997, by its President,
Chairman of the Board, and Chief Executive Officer pursuant to prior action
taken by its Board of Directors.
Smithway Motor Xpress Corp.
/s/ William G. Smith
William G. Smith, President,
Chairman of the Board and
Chief Executive Officer
<PAGE>
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