April 18, 2003
FOR IMMEDIATE RELEASE
Press Contact: G. Larry Owens
Executive Vice President,
Chief Administrative Officer, and
Chief Financial Officer
Smithway Motor Xpress Corp.
(515) 576-7418
SMITHWAY MOTOR XPRESS CORP. REPORTS FOURTH QUARTER
AND YEAR END RESULTS; FILES ANNUAL REPORT ON FORM 10-K;
AND ANNOUNCES AMENDMENTS TO FINANCING ARRANGEMENTS
AND FIRST QUARTER EXPECTATIONS
FORT DODGE, IOWA (PR Newswire) April 18, 2003--Smithway Motor Xpress Corp.
(Nasdaq SmallCap Market: SMXC) announced today financial and operating results
for the fourth quarter and year ended December 31, 2002. The Company also
announced that it has negotiated amendments to its primary credit facilities and
has filed its annual report on Form 10-K with the SEC. Finally, the Company
commented on its expectations concerning financial results for the first quarter
of 2003.
For the quarter, operating revenue decreased approximately 7.9% to $39.7 million
from $43.1 million for the corresponding quarter in 2001. Smithway's net loss
was $4.7 million, or ($0.97) per basic and diluted share, compared with net loss
of $2.3 million, or ($0.48) per basic and diluted share, for the same quarter in
2001.
For the year, operating revenue decreased approximately 11.2% to $169.5 million
from $190.8 million in 2001. The Company's net loss in 2002 was $8.7 million, or
($1.79) per basic and diluted share, compared with net loss of $5.2 million, or
($1.07) per basic and diluted share, for 2001.
The fourth quarter results included pre-tax adjustments of $5.1 million,
comprised of a $3.3 million write-off of goodwill associated with prior
acquisitions and a $1.8 million increase in auto liability and workers'
compensation loss reserves. The fourth quarter of 2001 included $1.1 million in
pre-tax adjustments, including a $707,000 write-off of the carrying value of its
proprietary computer operating system and a $332,000 increase in its reserve for
bad debts. The Company's net loss prior to these adjustments would have been
$1.6 million or ($0.33) per share for the fourth quarter and $5.6 million or
($1.15) per share for the year ended December 31, 2002. This compares to a net
loss before adjustments of $1.7 million or ($0.35) per share for the fourth
quarter of 2001 and $4.6 million or ($0.95) per share for the year 2001. The
main contributors to the loss before adjustments in 2002 were decreased revenue
production of the tractor fleet, decreased brokerage revenue, and increased
parts and maintenance expense. Management believes that presentation of earnings
calculated to exclude the impact of the adjustments is useful to investors in
comparing of the Company's results of operations from period to period.
Chairman, President, and Chief Executive Officer William G. Smith stated,
"During the fourth quarter we continued to pursue our previously announced core
goals of improving revenue per seated tractor, improving our van operation's
performance, decreasing our number of tractors without drivers, and continuing
our commitment to safe operations. For the quarter, average revenue per seated
tractor per week decreased by approximately 1.0% versus the fourth quarter of
2001 as a one cent increase in revenue per loaded mile was more than offset by
fewer revenue miles per tractor. During the quarter, our number of seated
tractors remained essentially constant.
Finally, we continue to be very pleased with our safety record. In 2002 the
Company had its best safety year, in terms of accidents per million miles, since
going public in 1996. The increase in auto liability reserves during the fourth
quarter related to a change in estimating the ultimate cost of claims that
occurred in prior years."
The Company also announced that it filed its annual report on Form 10-K for the
year ended December 31, 2002, with the Securities and Exchange Commission on
April 15, 2003. The Company previously had filed for an extension of the filing
date from March 31 to April 15. The Company filed for the extension because, in
connection with the amendments to the Company's financing arrangements discussed
below, the Company and its outside auditors required additional time to review
the impact of the amendments on the Company's financial statements and to
finalize the audit report.
Between late March and mid April, the Company negotiated amendments to its
financing arrangement with LaSalle Bank as well as its equipment financing
arrangement with a manufacturer. The Company had been in violation of certain
financial covenants under the LaSalle facility at December 31 and expected to be
in violation under both the LaSalle Agreement and the equipment financing with
the manufacturer at March 31. The Company obtained waivers of all violations and
negotiated amendments to the financial covenants under both arrangements going
forward. Under the LaSalle amendments the interest rate was raised by 200 basis
points and the facility's maturity is now April 1, 2004.
Commenting on the amendments to the Company's financing arrangements, Mr. Smith
stated: "We are pleased that our lenders have agreed to modify our financial
covenants to better align them with management's expectations regarding the
Company's near term financial performance. For the first quarter of 2003, the
Company expects to report operating revenue of approximately $40 million, and a
net loss of approximately $1.6 to $1.7 million. The net loss is expected to be
less than the net loss in the first quarter of 2002, on a revenue base of
approximately $1.3 million less. Based upon anticipated results, we believe that
continued compliance with the revised covenants is reasonably achievable."
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 National Market under the symbol
"SMXC."
This press release and statements made by the Company in its stockholder reports
and public filings, as well as oral public statements by Company
representatives, may contain certain forward-looking information, usually
identified by words such as "anticipates," "believes,"
"estimates," "projects," "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 turn around continued operating losses, which could result in further
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 new 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 such obligation to
update or alter its forward-looking statements whether as a result of new
information, future events, or otherwise.
SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data and operating statistics)
Three months ended Year to Date
December 31, December 31,
(unaudited)
-------------------------- -----------------------
2001 2002 2001 2002
------------- ---------- ---------- -----------
Operating revenue:
Freight $42,956 $39,686 $190,165 $168,918
Other 166 51 661 550
------------- ---------- ---------- -----------
Operating revenue 43,122 39,737 190,826 169,468
Operating expenses:
Purchased transportation 16,166 14,330 70,129 62,364
Compensation and employee benefits 12,953 12,552 54,394 51,834
Fuel, supplies, and maintenance 6,731 7,286 32,894 27,722
Insurance and claims 1,371 2,252 5,325 7,324
Taxes and licenses 957 816 3,817 3,444
General and administrative 2,298 1,708 8,294 7,153
Communications and utilities 503 426 2,123 1,783
Depreciation and amortization 5,168 7,637 18,778 19,725
------------- ---------- ---------- -----------
Total operating expenses 46,147 47,007 195,754 181,349
------------- ---------- ---------- -----------
Loss from operations (3,025) (7,270) (4,928) (11,881)
Financial (expense) income:
Interest expense (630) (373) (3,052) (1,955)
Interest income 12 18 48 40
------------- ---------- ---------- -----------
Loss before income taxes (3,643) (7,625) (7,932) (13,796)
Income tax benefit (1,316) (2,902) (2,721) (5,118)
------------- ---------- ---------- -----------
Net loss ($2,327) ($4,723) ($5,211) ($8,678)
============= ========== ========== ===========
------------- ---------- ---------- -----------
Basic and diluted loss per share ($0.48) ($0.97) ($1.07) ($1.79)
============= ========== ========== ===========
Basic weighted average common shares outstanding 4,843,980 4,846,021 4,852,067 4,845,652
Diluted weighted average common shares outstanding 4,843,980 4,846,021 4,852,067 4,845,652
Operating Statistics
-------------------------- -----------------------
2001 2002 2001 2002
------------- ---------- ---------- -----------
Operating ratio 107.0% 118.3% 102.6% 107.0%
Average revenue per tractor per week $2,016 * $2,177 * $2,189 * $2,162
Average revenue per seated tractor per week $2,308 * $2,285 * $2,392 * $2,391
Average length of haul in miles 678 659 697 664
Average revenue per loaded mile $1.37 * $1.38 * $1.34 * $1.37
Ending company tractors 939 773 939 773
Ending owner/operators tractors 575 521 575 521
Ending trailers 2,781 2,480 2,781 2,480
Weighted average tractors 1,513 1,299 1,530 1,410
*excludes fuel surcharge
SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31,
2001 2002
---------------------- -----------------------
ASSETS
Current assets:
Cash and cash equivalents $722 $105
Receivables, net 16,489 14,125
Inventories 1,561 868
Prepaid expenses and other 3,191 4,508
---------------------- -----------------------
Total current assets 21,963 19,606
Property and equipment 141,297 131,601
Less accumulated depreciation 62,252 64,031
---------------------- -----------------------
Net property and equipment 79,045 67,570
Other assets 5,428 2,233
---------------------- -----------------------
Total assets $106,436 $89,409
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $12,052 $11,595
Accounts payable and accrued expenses 9,966 12,139
---------------------- -----------------------
Total current liabilities 22,018 23,734
Long-term debt 37,690 32,225
Deferred income taxes 14,862 10,257
---------------------- -----------------------
Total liabilities 74,570 66,216
Stockholders' equity 31,866 23,193
---------------------- -----------------------
Total liabilities and stockholders' equity $106,436 $89,409
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