Press Contact: Douglas C. Sandvig Senior Vice President, Treasurer and Chief Financial Officer Smithway Motor Xpress Corp. (515) 576-7418
SMITHWAY REPORTS 107% INCREASE IN FIRST QUARTER EARNINGS
FORT DODGE, IOWA (PR Newswire) April 25, 2006—Smithway Motor Xpress Corp. (Nasdaq Capital Market: SMXC) announced today financial and operating results for the first quarter ended March 31, 2006.
For the quarter, net earnings improved 107% to $1,043,000 compared to $503,000 for the same quarter in 2005.
For the first quarter of 2006, operating revenue increased approximately 16% to $57.7 million from $49.7 million for the corresponding quarter in 2005. Operating revenue, excluding fuel surcharge revenue of $8.2 million, increased approximately 10% to $49.5 million from $44.8 million, excluding fuel surcharge revenue of $4.9 million, for the corresponding quarter in 2005. For the first quarter of 2006, net earnings were $1,043,000, or $0.21 per basic and diluted share, compared with net earnings of $503,000, or $0.10 per basic share and diluted share, for the same quarter in 2005.
G. Larry Owens, President and Chief Executive Officer, commented, “This is only the second time in our company’s history that first quarter net earnings have exceeded $1.0 million. We have been profitable for each of the past nine quarters and our earnings per share for the past twelve months ($0.95) are higher than any other twelve month period since 1999. Our operating ratio, excluding fuel surcharge revenue, for the quarter was 95.3% compared to 97.0% during the first quarter of 2005, a 170 basis improvement.
“Our improvement in earnings has been slowed somewhat by increasing costs. During the quarter, average fuel prices increased 22% to $2.39 per gallon compared to $1.96 per gallon in the first quarter of 2005. Increased fuel surcharge revenue mitigated approximately 89% of this price increase. Also, during the past twelve months we increased driver wages twice in response to the market and we raised driver wages again on April 1, 2006.
“We are proud of what we have accomplished yet we are not satisfied. We continually work to contain costs, improve our operations and bring on new business in order to have a positive impact on future earnings.”
Smithway is a truckload carrier that hauls diversified freight nationwide, concentrating primarily on the flatbed segment of the truckload market. Its Class A Common Stock is traded on the Nasdaq Capital Market under the symbol “SMXC.”
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This press release and statements made by the Company in its stockholder reports and public filings, as well as oral public statements by Company representatives, may contain certain forward-looking information, usually identified by words such as “anticipates,” “believes,” “estimates,” “projects,” “plans,” “expects,” or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: failure to sustain the recent return to quarterly and annual operating profitability, which could result in violation of bank covenants and acceleration of indebtedness at several financial institutions; the ability to obtain financing on acceptable terms, and obtain waivers and amendments to current financing in the event of default; economic recessions or downturns in customers’ business cycles; excessive increases in capacity within truckload markets; surplus inventories; decreased demand for transportation services offered by the Company; increases or rapid fluctuations in inflation, interest rates, fuel prices, and fuel hedging; the availability and costs of attracting and retaining qualified drivers and owner-operators; increases in insurance premiums and deductible amounts, or changes in excess coverage, relating to accident, cargo, workers’ compensation, health, and other claims; the resale value of used equipment and prices of new equipment; seasonal factors such as harsh weather conditions that increase operating costs; regulatory requirements that increase costs and decrease efficiency, including emissions standards and hours-of-service regulations; changes in management; and the ability to negotiate, consummate, and integrate acquisitions. Readers should review and consider the various disclosures made by the Company in this press release, stockholder reports, and in its Forms 10-K, 10-Q, and other public filings. The Company disclaims any obligation to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.
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SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share data and operating statistics)
Three months ended
March 31,
(unaudited)
2005
2006
Operating revenue:
Freight
$
49,447
$
57,277
Other
277
412
Operating revenue
49,724
57,689
Operating expenses:
Purchased transportation
16,368
20,553
Compensation and employee benefits
13,660
15,129
Fuel, supplies, and maintenance
11,078
12,758
Insurance and claims
2,008
1,433
Taxes and licenses
873
954
General and administrative
1,942
1,866
Communications and utilities
331
344
Gain on disposal of assets
(540
)
(562
)
Depreciation and amortization
2,678
2,864
Total operating expenses
48,398
55,339
Earnings from operations
1,326
2,350
Other (expense) income:
Interest expense
(369
)
(501
)
Interest income
33
18
Earnings before income taxes
990
1,867
Income tax expense
487
824
Net earnings
$
503
$
1,043
Basic earnings per share
$
0.10
$
0.21
Diluted earnings per share
$
0.10
$
0.21
Basic weighted average common shares outstanding
4,903,845
4,971,624
Diluted weighted average common shares outstanding
5,022,379
5,075,565
OPERATING STATISTICS
Operating ratio (1)
97.3
%
95.9
%
Operating ratio, excluding fuel surcharges (2)
97.0
%
95.3
%
Average operating revenue per tractor per week
$
3,107
$
3,500
Average revenue per tractor per week (3)
$
2,672
$
2,816
Average revenue per seated tractor per week (3)
$
2,746
$
2,877
Average length of haul in miles
630
623
Average revenue per loaded mile (3)
$
1.52
$
1.61
Ending company tractors
787
793
Ending owner/operators tractors
446
476
Ending trailers
2,075
2,139
Weighted average tractors
1,231
1,268
(1) Operating expenses divided by operating revenue. (2) Operating expenses minus fuel surcharge revenue, divided by operating revenue excluding fuel surcharge revenue. (3) Excludes fuel surcharge, brokerage, and other revenue. For the three months ended March 31, 2005 and 2006, brokerage revenue was $1,801 and $2,661.
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SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
December 31,
March 31,
2005
2006
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
168
$
346
Receivables, net
19,820
21,228
Inventories
938
993
Prepaid expenses and other
5,705
6,365
Total current assets
26,631
28,932
Property and equipment
121,126
119,996
Less accumulated depreciation
59,704
58,669
Net property and equipment
61,422
61,327
Other assets
2,058
2,058
Total assets
$
90,111
$
92,317
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current debt
$
8,363
$
8,344
Accounts payable and accrued expenses
17,351
19,224
Total current liabilities
25,714
27,568
Long-term debt
25,185
24,487
Deferred income taxes
11,734
11,729
Total liabilities
62,633
63,784
Stockholders’ equity
27,478
28,533
Total liabilities and stockholders’ equity
$
90,111
$
92,317
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