UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 2006.
Commission file number 0-20793
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
SMITHWAY MOTOR XPRESS, INC.
401(k) RETIREMENT SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
SMITHWAY MOTOR XPRESS CORP.
2031 QUAIL AVENUE
FORT DODGE, IOWA 50501
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Financial Statements and Schedule
December 31, 2006 and 2005
(With Report of Independent Registered Public Accounting Firm)
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
PAGE
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
SCHEDULE
1 Schedule H, Line 4i -- Schedule of Assets (Held at End of Year) as of December 31, 2006 9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Trustees
Smithway Motor Xpress, Inc. 401(k) Retirement Savings and Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of Smithway Motor Xpress, Inc. 401(k) Retirement Savings and Investment Plan
(the Plan) as of December 31, 2006 and 2005, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Smithway Motor
Xpress, Inc. 401(k) Retirement Savings and Investment Plan as of December 31,
2006 and 2005, and the changes in its net assets available for benefits for the
years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, Line 4i --
Schedule of Assets (Held at End of Year) is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
July 11, 2007
Des Moines, Iowa
1
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits
December 31, 2006 and 2005
<Table>
<Caption>
---------------------------
2006 2005
----------- -----------
ASSETS:
Investments:
Investment in registered investment companies, at fair value......... $ 8,805,438 $ 8,015,746
Common stock, at fair value ......................................... 3,173,210 3,330,286
Loans to participants ............................................... 380,897 451,052
----------- -----------
12,359,545 11,797,084
----------- -----------
Contributions receivable:
Employer .............................................................. 231,870 260,520
Employee .............................................................. 102,223 102,655
----------- -----------
Total assets ...................................................... 12,693,638 12,160,259
----------- -----------
Liabilities ............................................................. 6,375 8,199
Net assets available for benefits, at fair value .................. 12,687,263 12,152,060
----------- -----------
Adjustment from fair value to contract value for fully benefit
responsive investment contracts ......................................... 18,906 16,243
----------- -----------
Net assets available for benefits ................................. $12,706,169 $12,168,303
=========== ===========
</Table>
See accompanying notes to financial statements
2
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits
Years ended December 31, 2006 and 2005
<Table>
<Caption>
---------------------------
2006 2005
----------- -----------
Additions to net assets attributed to:
Employer contributions ............................... $ 231,870 $ 260,520
Employee contributions and rollovers ................. 1,069,346 1,075,571
Net appreciation in fair value of investments ........ 312,017 821,994
Interest and dividends ............................... 795,117 214,296
----------- -----------
Total additions ................................. 2,408,350 2,372,381
----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants ........................ 1,842,309 1,148,539
Administrative fees .................................. 28,175 42,259
Other ................................................ - 1,915
----------- -----------
Total deductions ................................ 1,870,484 1,192,713
----------- -----------
Net increase in net assets available for benefits 537,866 1,179,668
Net assets available for benefits:
Beginning of year .................................... 12,168,303 10,988,635
----------- -----------
End of year .......................................... $12,706,169 $12,168,303
=========== ===========
</Table>
See accompanying notes to financial statements
3
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) PLAN INFORMATION AND BASIS OF PRESENTATION
The accompanying financial statements of Smithway Motor Xpress,
Inc. 401(k) Retirement Savings and Investment Plan (the Plan) have
been prepared on the accrual basis of accounting and are subject
to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA). The Plan is sponsored by Smithway Motor Xpress
Corp. (the Company) and has two entry dates per year. Full-time
employees are eligible for participation in the Plan on the next
entry date after completing ninety days of service and attaining
twenty-one years of age. Participants should refer to the Plan
agreement for more complete information.
(b) INVESTMENTS
Investments, other than loans, are reported at fair value as
determined by using available market information. Fully-benefit
responsive investment contracts are stated at fair value and then
adjusted to contract value. Fair value of the contract is
calculated by discounting the related cash flow based on contract
yields of similar instruments with comparable duration. Purchases
and sales of securities are recorded on a trade-date basis. Loans
to participants are valued at their unpaid principal balance,
representing estimated fair value.
Net investment income includes investment income, realized gains
(losses), and unrealized appreciation (depreciation) on
investments held.
(c) ADMINISTRATIVE FEES
Certain administrative fees are paid by the Company.
(d) INCOME TAXES
The Internal Revenue Service has issued a determination letter
that the Plan is qualified, and the trust established under the
Plan is tax-exempt, under Sections 401(a) and 501(a) of the
Internal Revenue Code. The Plan's management, Franklin Templeton
(the Plan Administrator) and the Plan's tax counsel believe the
Plan is currently designed and operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore,
they believe the Plan was qualified and the related trust was
tax-exempt as of December 31, 2006 and 2005. The Plan was amended
on January 1, 2005. Management believes this amendment did not
adversely impact the Plan's compliance with the applicable
requirements of the Internal Revenue Code. Future qualification of
the Plan will depend on continuing operation in compliance with
the Internal Revenue Code.
(e) USE OF ESTIMATES
The Plan's management has made a number of estimates and
assumptions relating to the reporting of assets, liabilities, and
changes therein to prepare these financial statements in
conformity with U.S. generally accepted accounting principles.
Actual results could differ from those estimates.
4
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
(f) ADOPTION OF NEW ACCOUNTING GUIDANCE
The financial statements reflect the retroactive adoption of
Financial Accounting Standards Board Staff Position AAG INV-1 and
SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment
Contracts Held by Certain Investment Companies Subject to the
AICPA Investment Company Guide and Defined-Contribution Health and
Welfare and Pension Plans (the FSP). As required by the FSP,
investment contracts held by a defined contribution plan are
required to be reported at fair value. However, contract value is
the relevant measurement attribute for that portion of the net
assets available for benefits of a defined contribution plan
attributable to fully benefit-responsive investment contracts
because contract value is the amount participants would receive if
they were to initiate permitted transactions under the terms of
the Plan. As required by the FSP, the statements of net assets
available for benefits presents the fair value of the Galliard
Stable Return Fund investment contract, as well as the adjustment
of the fully benefit-responsive investment contract from fair
value to contract value. The statement of changes in net assets
available for benefits is prepared on a contract value basis.
(g) RISK AND UNCERTAINTIES
The Plan invests in various investment securities and Company
stock. Investment securities and Company stock are exposed to
various risks, such as interest rate, market and credit risks.
Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the
values of investment securities will occur in the near term and
that such changes could materially affect participants' account
balances and the amounts reported in the statement of net assets
available for benefits.
(2) NET ASSETS AVAILABLE FOR BENEFITS
The Plan Administrator maintains funds received from the Plan
primarily in registered investment companies or in the Company's
common stock.
(3) CONTRIBUTIONS
The Company may, at its discretion, make annual contributions to the
Plan, which shall be allocated to eligible participants based on a
percentage of the total deferred compensation contributed during the
Plan year. Contributions totaled $231,870 and $260,520 for the years
ended December 31, 2006 and 2005, respectively. Forfeitures, if any,
are used to reduce future employer contributions. Forfeitures used
towards contributions totaled $31,530 and $5,133 for years ended
December 31, 2006 and 2005. There are no unused forfeitures at the end
of years ended December 31, 2006 and 2005.
Employees may make voluntary contributions to the Plan up to certain
IRS limitations.
(4) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution, the employer's contribution, and an allocation of Plan
earnings. Each participant will be permitted to direct the Plan
Administrator to invest their individual accounts into various
approved investments permitted under the Plan.
Participants are immediately vested in their voluntary contributions
and the earnings thereon. Vesting of employer matching contributions
is based on years of continuous service in which the participant has
completed at least 1,000 hours of service as follows:
5
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
PERCENTAGE
YEARS OF SERVICE VESTED
---------------- ------------
1 0%
2 20%
3 40%
4 60%
5 80%
6 100%
(5) BENEFITS
Under the terms of the Plan agreement, participants or their
beneficiaries are eligible for benefits upon retirement, death, or
disability. Benefits shall be distributed through one of several
options selected by the participants, as defined in the Plan
agreement. Benefit payments are recorded upon distribution.
Distributions from the participants' ESOP accounts are made in shares
of the Company stock or cash. All other distributions are made in
cash.
(6) PLAN TERMINATION
Although the Company has not expressed any intent to terminate its
participation in the Plan, it may do so at any time, subject to the
provisions set forth in ERISA. Should the Plan be terminated at some
future time, all participants become 100% vested in all benefits
earned from both employee and employer contributions as of the
termination date.
(7) PARTY-IN-INTEREST TRANSACTIONS
Transactions resulting in Plan assets being transferred to or used by
a related party are prohibited under ERISA unless a specific exemption
applies. Franklin Templeton, as Plan Administrator, is a
party-in-interest as defined by ERISA as a result of investing Plan
assets in its own funds. The Company is a party-in-interest as a
result of the Plan participants being able to invest in Company stock.
A participant who acquires a participant loan is a party-in-interest.
However, such transactions are exempt and are not prohibited by ERISA.
(8) INVESTMENTS
The following table presents investments representing 5% or more of
the Plan net assets at December 31, 2006 and 2005:
2006 2005
------------------------------- ---------------------------------
SHARES IN UNITS FAIR VALUE SHARES IN UNITS FAIR VALUE
--------------- ---------- --------------- ----------
Galliard Stable Return Fund 34,415 $1,331,533 30,726 $1,143,939
Franklin Templeton U.S. Government Securities Fund 133,731 859,888 125,494 818,221
Franklin Templeton Income Fund 487,778 1,297,491 520,460 1,249,103
Fidelity Magellan Fund 24,022 2,150,470 21,431 2,281,090
Franklin Templeton Flex Cap Growth Fund 37,499 1,591,460 38,485 1,546,331
Smithway Motor Xpress Corp. common stock 317,481 3,173,100 373,277 3,330,286
6
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Included in net investment gain for the years ended December 31, 2006
and 2005 is appreciation of investments (including gains and losses on
investments bought and sold, as well as held during the year) as
follows:
2006 2005
--------- ---------
Registered investment companies $ (77,293) 151,781
Stable value fund 2,663 4,547
Common stock 386,647 665,666
--------- ---------
$ 312,017 821,994
--------- ---------
(9) INVESTMENT CONTRACT
In 2006 and 2005, the Plan maintained a fully benefit-responsive
investment contract with Wells Fargo Bank, N.A. (Wells Fargo) called
the Galliard Stable Return Fund. Contributions are maintained in a
pooled account. The account is credited with earnings on the
underlying investments and charged for participant withdrawals and
administrative expenses charged by Wells Fargo. As described in Note
1, because the investment contract is fully benefit-responsive,
contract value is the relevant measurement attribute for that portion
of the net assets available for benefits attributable to the
investment contract. Contract value, as reported by Wells Fargo,
represents contributions made under the contract plus earnings, less
participant withdrawals and administrative expenses. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of
their investment at contract value; however, the investment contract
is subject to certain restrictions which may impact the Plan's ability
to fully realize the investment contract's value under certain
conditions. The average yield and crediting interest rates on the
contract were 5.24 percent and 4.96 percent for the year ended
December 31, 2006. The basis and frequency of determining the
crediting interest rate is done on a quarterly basis. There were no
guarantees or limitations on the contract at December 31, 2006 and
2005.
(10) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500 as of December 31, 2006
and 2005.
2006 2005
------------ ------------
Net assets available for benefits per the financial statements $ 12,706,169 $ 12,168,303
Adjustment from contract value to fair value for fully benefit-responsive
investment contracts (18,906) (16,243)
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS (FAIR VALUE COLUMN PER FORM 5500) $ 12,687,263 $ 12,152,060
============ ============
7
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
For the years ended December 31, 2006 and 2005, the following is a
reconciliation of net appreciation in fair value of investments per
the financial statements to the Form 5500:
2006 2005
----------- -----------
Total net appreciation in fair value of investments, interest and
dividends per the financial statements $ 1,107,134 $ 1,036,290
Adjustment from contract value to fair value for fully benefit
responsive-investment contracts (2,663) (4,547)
----------- -----------
NET APPRECIATION IN FAIR VALUE OF INVESTMENTS PER THE FORM 5500 $ 1,104,471 $ 1,031,743
=========== ===========
(11) PARTICIPANT LOANS
Participants are allowed to borrow from the vested portion of their
account. The minimum loan is $1,000. The maximum loan is the lesser of
50% of the participant's vested account balance or $50,000. These
loans are secured by the balance in the participant's account and bear
interest rates that range from 4.25% to 10.5% at December 31, 2006.
Principal and interest is paid notably through payroll deductions.
(12) SUBSEQUENT EVENTS
In March 2007, the Company entered into a definitive agreement with
Western Express, Inc. to acquire all outstanding shares of the
Company. The Plan's management has not determined the impact the
transaction will have on the Plan.
8
Schedule 1
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2006
Column (a) Column (b) Column (c) Column (d) Column (e)
PARTY-IN- DESCRIPTION OF INVESTMENT
INTEREST INCLUDING MATURITY DATE OR CURRENT
IDENTIFICATION INDENTIFY OF ISSUE OR BORROWER RATE OF INTEREST COST VALUE
- -------------- ------------------------------ -------------------------------- ------------- ------------
* Wells Fargo Bank, N.A. Galliard Stable Return Fund $ 1,286,903 1,331,533
* Franklin Templeton U.S. Government Securities Fund 868,308 859,888
* Franklin Templeton Total Return Fund 111,001 111,678
* Franklin Templeton Income Fund 1,179,666 1,297,491
* Franklin Templeton Age High Income Fund 122,126 124,543
* Franklin Templeton Growth Fund 197,484 249,306
* Franklin Templeton Mutual Shares 421,754 449,320
* Franklin Templeton Small Cap Value Fund 149,327 156,453
* Fidelity Magellan Fund 2,480,244 2,150,470
* Franklin Templeton Capital Growth Fund 198,607 208,688
* Franklin Templeton Flex Cap Growth Fund 1,513,505 1,591,460
* Franklin Templeton Small-Midcap Growth Fund 55,579 54,732
* Franklin Templeton Growth Fund 231,101 219,876
* Ameritrade cash Cash 110 110
* Smithway Motor Xpress Corp. 317,481 shares of common stock 3,266,957 3,173,100
------------ ----------
12,082,672 11,978,648
with interest rates from
4.25%-10.5% and various
* Loans to participants maturities - 380,897
------------ ----------
$ 12,082,672 12,359,545
------------ ----------
*PARTY-IN-INTEREST.
See accompanying independent auditors' report.
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized
SMITHWAY MOTOR XPRESS, INC. 401(k)
RETIREMENT SAVINGS AND INVESTMENT PLAN
Date: July 11, 2007 By: /s/ Tom Nelson
--------------------------------
Tom Nelson, Administrator
10
EXHIBIT INDEX
Exhibit
Number
-------
23 Consent of KPMG LLP, independent registered public accounting firm