SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 27, 1998
SMITHWAY MOTOR XPRESS CORP.
(Exact name of registrant as specified in its charter)
NEVADA 000-20793 42-1433844
(State or other jurisdiction of (Commission File Number) (IRS Employer ID No.)
incorporation)
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)
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ITEM 2. Acquisition or Disposition of Assets
Smithway Motor Xpress Corp., a Nevada corporation ("SMXC"), is the
reporting company under this Form 8-K. On February 27, 1998, SMXC formed a new
wholly-owned subsidiary in connection with the purchase of certain assets and
assumption of certain liabilities and the freight operations of East West Motor
Express, Inc. ("Old East West") of Black Hawk, South Dakota. Contemporaneously
with the incorporation, Old East West filed Articles of Amendment with the South
Dakota Secretary of State changing its name to East West Leasing, Inc. and
allowing the newly-formed entity to assume its name ("New East West"). SMXC and
its subsidiaries provide nationwide transportation of diversified freight,
concentrating primarily on the flatbed segment of the truckload market.
Effective February 27, 1998, New East West consummated the acquisition of
specified assets owned and leased by Old East West pursuant to the Asset
Purchase Agreement (the "Agreement"). Old East West's headquarters and only
terminal is in Black Hawk, from which it provides regional flatbed and dry van
service. Old East West generated over $31.0 million in revenue in 1997 with
pre-tax net earnings of $1.2 million in 1997. New East West intends to continue
to operate the equipment in this manner, using the assets acquired to augment
the existing service of the other wholly-owned subsidiary of SMXC, Smithway
Motor Xpress, Inc. ("SMXI").
The Agreement called for a purchase price of approximately $6.7 million
and the assumption of approximately $3.5 million of existing financing for
certain tractors, trailers, and mobile communication terminals and the
assumption of liability related to accrued vacation and sick leave. The assumed
financing was paid off immediately following the Closing. The purchased assets
included tractors, trailers, safety equipment, prepaid licenses, miscellaneous
assets and inventory, and mobile communication terminals. The Agreement also
provided for the purchase of the Black Hawk facility for $750,000 from an entity
affiliated with the Old East West. Darwyn and David Stebbins ("the Stebbins"),
the shareholders of Old East West, are prohibited from competing in the
truckload carrier business for five years from the date of Closing. No
consideration separate from the Agreement itself is allocated to the
noncompetition undertakings. Following the Closing, each of the Stebbins will be
employed by New East West through December 31, 1998 at an annual salary of
$78,000.
SMXI increased its line of credit with LaSalle National Bank to finance
the transaction. The consideration exchanged was determined through arms'-length
negotiations. There is no material relationship between Old East West (or its
officers, directors, and stockholders) and SMXI, SMXC, or New East West, any of
their affiliates, directors, officers, or any associate of any such affiliate,
director, or officer.
The reporting company is not required to file financial statements of
the acquired entity or pro forma financial statements in connection with this
Current Report on Form 8-K.
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ITEM 7. Exhibits.
The terms of the acquisition are more fully described in the Agreement,
a copy of which is filed herewith as Exhibit 2.1. In addition, the SMXC press
release announcing the acquisition is filed herewith as Exhibit 99.
2.1 Asset Purchase Agreement dated February 20, 1998, by and among
Smithway Motor Xpress, Inc., East West Motor Express, Inc., and Darwyn
and David Stebbins.*
99 Press release issued by SMXC announcing the transaction.
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* Contemporaneously with the Closing, the Agreement was assigned by SMXI
to New East West. All of the schedules and exhibits to the Agreement
have been omitted. SMXC hereby agrees to furnish supplementally to the
Commission a copy of any schedule or exhibit omitted upon the
Commission's request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SMITHWAY MOTOR XPRESS CORP.
Date: March 12, 1998 By: /S/ G. LARRY OWENS
G. Larry Owens, Executive Vice
President and Chief Financial Officer
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