UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    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 September 30, 2003

                                       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 000-20793

                           SMITHWAY MOTOR XPRESS CORP.
             (Exact name of registrant as specified in its charter)

           Nevada                                       42-1433844
---------------------------------           -----------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

       2031 Quail Avenue
       Fort Dodge, Iowa                                   50501
---------------------------------           -----------------------------------
(Address of Principal Executive Offices)                  (Zip Code)

Registrant's telephone number, including area code:  515/576-7418

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 such  filing
requirements for the past 90 days.
YES  [X]  NO  [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). YES [ ] NO [X]

As of October 31, 2003, the  registrant  had 3,846,821  shares of Class A Common
Stock and 1,000,000 shares of Class B Common Stock outstanding.

                                       1
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION
<TABLE>
                                                                                           PAGE
                                                                                          NUMBER
<S>          <C>                                                                          <C>
Item 1       Financial Statements                                                          3-10

             Condensed Consolidated Balance Sheets as of December 31, 2002 and
                    September 30, 2003  (unaudited)...................................     3-4

             Condensed Consolidated Statements of Operations for the three and nine
                    months ended September 30, 2002 and 2003 (unaudited)..............      5

             Condensed Consolidated Statements of Cash Flows for the nine
                    months ended September 30, 2002 and 2003 (unaudited)..............     6-7

             Notes to Condensed Consolidated Financial Statements (unaudited).........     8-10

Item 2       Management's Discussion and Analysis of Financial Condition and
                    Results of Operations.............................................     11-20

Item 3       Quantitative and Qualitative Disclosures About Market Risk...............      20

Item 4       Controls and Procedures..................................................      20

                                     PART II
                                OTHER INFORMATION

Item 1       Legal Proceedings........................................................      21

Item 2       Changes in Securities and Use of Proceeds................................      21

Item 3       Defaults Upon Senior Securities..........................................      21

Item 4       Submission of Matters to a Vote of Security Holders......................      21

Item 5       Other Information........................................................      21

Item 6       Exhibits and Reports on Form 8-K.........................................      22
</TABLE>


                                       2
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                  (Dollars in thousands, except per share data)
                                   (unaudited)
<TABLE>
                                                         ------------------------------------------
                                                               December 31,        September 30,
                                                                   2002                 2003
                                                         ---------------------  -------------------
                         ASSETS
<S>                                                         <C>                    <C>
Current assets:
  Cash and cash equivalents..............................   $             105      $           169
  Receivables:
     Trade...............................................              13,496               15,590
     Other...............................................                 629                  804
  Inventories............................................                 868                1,029
  Deposits, primarily with insurers......................                 753                  928
  Prepaid expenses.......................................               1,492                1,664
  Deferred income taxes..................................               2,263                2,313
                                                         ---------------------  -------------------
      Total current assets...............................              19,606               22,497
                                                         ---------------------  -------------------
Property and equipment:
  Land...................................................               1,548                1,548
  Buildings and improvements.............................               8,210                8,208
  Tractors...............................................              71,221               69,727
  Trailers...............................................              42,517               40,414
  Other equipment........................................               8,105                5,588
                                                         ---------------------  -------------------
                                                                      131,601              125,485
  Less accumulated depreciation..........................              64,031               67,646
      Net property and equipment.........................              67,570               57,839
                                                         ---------------------  -------------------
Goodwill.................................................               1,745                1,745
Other assets.............................................                 488                  237
                                                         ---------------------  -------------------
                                                            $          89,409      $        82,318
                                                         =====================  ===================
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                  (Dollars in thousands, except per share data)
                                   (unaudited)
<TABLE>
                                                       --------------------------------------------
                                                              December 31,         September 30,
                                                                  2002                 2003
                                                       ---------------------- ---------------------
         LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                      <C>                    <C>
Current liabilities:
  Current maturities of long-term debt.................  $            11,595    $           11,197
  Accounts payable.....................................                4,556                 6,152
  Accrued loss reserves................................                3,882                 4,972
  Accrued compensation.................................                2,152                 2,784
  Checks in excess of cash balances....................                1,086                 1,310
  Other accrued expenses...............................                  463                   439
                                                       ---------------------- ---------------------
        Total current liabilities......................               23,734                26,854
Long-term debt, less current maturities................               30,533                24,951
Deferred income taxes..................................               10,257                 9,063
Line of credit.........................................                1,692                   578
                                                       ---------------------- ---------------------
        Total liabilities..............................               66,216                61,446
                                                       ---------------------- ---------------------
Stockholders' equity:
  Preferred stock......................................                    -                     -
  Common stock:
    Class A............................................                   40                    40
    Class B............................................                   10                    10
  Additional paid-in capital...........................               11,393                11,393
  Retained earnings....................................               12,164                 9,843
  Reacquired shares, at cost...........................                (414)                 (414)
                                                       ---------------------- ---------------------
            Total stockholders' equity.................               23,193                20,872
Commitments
                                                       ---------------------- ---------------------
                                                         $            89,409    $           82,318
                                                       ====================== =====================
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                  (Dollars in thousands, except per share data)
                                   (unaudited)
<TABLE>
                                                  Three months ended                Nine months ended
                                                     September 30,                    September 30,
                                             -----------------------------------------------------------------
                                                  2002             2003            2002             2003
                                             ----------------  -------------- ----------------  --------------
<S>                                               <C>             <C>              <C>             <C>
Operating revenue:
     Freight.................................     $  43,132       $  42,325        $ 129,232       $ 124,056
     Other...................................           140             136              499             532
                                             ----------------  -------------- ----------------  --------------
        Operating revenue....................        43,272          42,461          129,731         124,588
                                             ----------------  -------------- ----------------  --------------
Operating expenses:
     Purchased transportation................        16,192          13,891           48,034          42,590
     Compensation and employee benefits......        12,138          12,885           39,282          37,912
     Fuel, supplies, and maintenance.........         6,929           7,420           20,436          22,351
     Insurance and claims....................         1,620           1,670            5,072           4,168
     Taxes and licenses......................           872             893            2,628           2,573
     General and administrative..............         1,708           1,867            5,445           5,081
     Communications and utilities............           418             337            1,357           1,130
     Depreciation and amortization...........         4,043           3,467           12,088          10,958
                                             ----------------  -------------- ----------------  --------------
        Total operating expenses.............        43,920          42,430          134,342         126,763
                                             ----------------  -------------- ----------------  --------------
        Income (loss) from operations........          (648)             31           (4,611)         (2,175)
Financial (expense) income
     Interest expense........................          (497)           (443)          (1,582)         (1,389)
     Interest income.........................             5              21               22              25
                                             ----------------  -------------- ----------------  --------------
        Loss before income taxes.............        (1,140)           (391)          (6,171)         (3,539)
Income tax benefit...........................          (383)            (86)          (2,216)         (1,218)
                                             ----------------  -------------- ----------------  --------------
        Net loss.............................     $    (757)      $    (305)       $  (3,955)      $  (2,321)
                                             ================  ============== ================  ==============
Basic and diluted loss per share.............     $   (0.16)      $   (0.06)       $   (0.82)      $   (0.48)
                                             ================  ============== ================  ==============
Basic and diluted weighted average shares
outstanding..................................     4,846,021       4,846,821        4,845,528       4,846,821
                                             ================  ============== ================  ==============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                             (Dollars in thousands)
                                   (unaudited)
<TABLE>
                                                                          Nine months ended
                                                                            September 30,
                                                                    ------------------------------
                                                                        2002            2003
                                                                    --------------  --------------
<S>                                                                    <C>             <C>
Cash flows from operating activities:
  Net loss.........................................................    $  (3,955)      $  (2,321)
                                                                    --------------  --------------
  Adjustments to reconcile net loss to cash used by operating
  activities:
    Depreciation and amortization..................................       12,088          10,958
    Deferred income tax benefit....................................       (2,236)         (1,244)
    Change in:
       Receivables.................................................       (1,622)         (2,269)
       Inventories.................................................          490            (161)
       Deposits, primarily with insurers...........................         (212)           (175)
       Prepaid expenses............................................         (741)           (172)
       Accounts payable and other accrued liabilities..............        2,754           3,294
                                                                    --------------  --------------
         Total adjustments.........................................       10,521          10,231
                                                                    --------------  --------------
           Net cash provided by operating activities...............        6,566           7,910
                                                                    --------------  --------------
Cash flows from investing activities:
  Purchase of property and equipment...............................       (1,076)           (287)
  Proceeds from sale of property and equipment.....................        4,064           2,765
  Other............................................................           42             251
                                                                    --------------  --------------
       Net cash provided by investing activities...................        3,030           2,729
                                                                    --------------  --------------
Cash flows from financing activities:
  Net borrowings (payments) on line of credit......................        2,221          (1,114)
  Principal payments on long-term debt.............................      (11,893)         (9,685)
  Change in checks issued in excess of cash balances...............            -             224
  Treasury stock reissued..........................................            6               -
                                                                    --------------  --------------
       Net cash used in financing activities.......................       (9,666)        (10,575)
                                                                    --------------  --------------
       Net (decrease) increase in cash and cash equivalents........          (70)             64
Cash and cash equivalents at beginning of period...................          722             105
                                                                    --------------  --------------
Cash and cash equivalents at end of period.........................    $     652       $     169
                                                                    ==============  ==============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>


                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
           Condensed Consolidated Statements of Cash Flows, continued
                             (Dollars in thousands)
                                   (unaudited)
<TABLE>
                                                                             Nine months ended
                                                                               September 30,
                                                                       ------------------------------
                                                                           2002            2003
                                                                       --------------  --------------
<S>                                                                      <C>            <C>
Supplemental disclosure of cash flow information:
  Cash paid (received) during period for:
       Interest......................................................    $   1,621       $   1,353
       Income taxes..................................................       (1,794)             23
                                                                       ==============  ==============

Supplemental schedules of noncash investing and financing
activities:
  Notes payable issued for tractors and trailers.....................    $   4,671       $   3,705
                                                                       ==============  ==============
</TABLE>










     See accompanying notes to condensed consolidated financial statements.



                                       7
<PAGE>

                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES
              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 accounting  principles  generally accepted in the
     United States of America,  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, 2002,
     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, 2002.
     Results of operations in interim periods are not necessarily  indicative of
     results to be expected for a full year.

Note 2.  Liquidity

     The Company incurred significant losses in 2001 and 2002, and has continued
     to incur losses in the first three  quarters of 2003. In addition,  working
     capital is a negative  $4,128 and $4,357 at December 31, 2002 and September
     30, 2003, respectively.  The Company was in violation of its bank covenants
     at various  times during the three  months and nine months ended  September
     30, 2003, but has received waivers. Since the beginning of 2003, there have
     been several amendments to the financing arrangement. These amendments have
     decreased the maximum loan limit,  increased the interest rate, and revised
     the financial  covenants to reflect  financial  performance that management
     believed  to be  reasonably  achievable,  although  in  each  case  further
     amendments  have  been  required  and there  can be no  assurance  that the
     required financial performance will be achieved in the future.

     During 2002, the Company's primary sources of liquidity were funds provided
     by operations  and  borrowings  under credit  arrangements  with  financial
     institutions  and equipment  manufacturers.  The Company is  experiencing a
     period of minimal cash flow as continuing losses and declining revenue have
     resulted in lower cash  generated  from  operations  and reduced  borrowing
     capacity.  As of the  date of this  report,  management  believes  that the
     Company has  adequate  borrowing  availability  on its line of credit.  The
     Company expects minimal capital  expenditures during the remainder of 2003.
     The Company's  ability to fund its cash requirements in future periods will
     depend on its  ability to comply  with  covenants  contained  in  financing
     arrangements and improve its operating results and cash flow. The Company's
     ability  to  achieve  the  required  improvements  will  depend on  general
     shipping demand of the Company's  customers,  fuel prices, the availability
     of drivers and independent  contractors,  insurance and claims  experience,
     and other  factors.  Management is in the process of  implementing  several
     steps intended to return the Company to  profitability,  some of which were
     developed with the assistance of a consulting  firm engaged by the board of
     directors, that are intended to improve the Company's operating results and
     achieve  compliance  with the  financial  covenants.  These steps  include:
     consolidating terminals;  improving the utilization per tractor through the
     hiring of a full-time  production manager;  implementing a yield management
     program in which the  Company  seeks  additional  favorable  freight  while
     ceasing to haul less favorable  freight;  and identifying  additional areas
     for cost containment, including, personnel costs and reducing the Company's
     excess  insurance  coverage  limit  effective July 1, 2003 to $2.0 million.
     Although  management  believes these steps have helped reduce the Company's
     losses  compared with the same quarter and nine months in 2002,  additional
     improvement  is needed,  and  particularly  considering  seasonally  slower
     shipping demand during the fourth and first quarters, there is no assurance
     that the improvements will occur as planned.

     Although there can be no assurance, management believes that cash generated
     by  operations  and  available  sources of financing  for  acquisitions  of
     revenue equipment,  although such sources are limited,  will be adequate to
     meet its currently  anticipated working capital requirements and other cash
     needs through September 30, 2004. To

                                       8
<PAGE>
     the extent that actual results or events differ from management's financial
     projections  or business  plans,  the Company's  liquidity may be adversely
     affected.  Specifically,  the Company's liquidity may be adversely affected
     by one or more of the following factors:  continuing weak freight demand or
     a loss in  customer  relationships  or volume;  the  ability to attract and
     retain  sufficient  numbers  of  qualified  drivers  and   owner-operators;
     elevated  fuel prices and the  ability to collect  fuel  surcharges;  costs
     associated  with insurance and claims;  increased  exposure with respect to
     accident  claims  as a  result  of a  reduction  of  the  Company's  excess
     insurance  coverage  limit;  inability  to  maintain  compliance  with,  or
     negotiate  amendments to, loan covenants;  and the possibility of shortened
     payment  terms by the  Company's  suppliers  and vendors  worried about the
     Company's ability to meet payment obligations.  The Company expects to fund
     its cash  requirements  primarily with cash  generated from  operations and
     revolving borrowings under its bank financing.

Note 3. Net earnings per common share

     Basic earnings per share have been computed by dividing net earnings by the
     weighted average  outstanding Class A and Class B common shares during each
     of the quarters.  Diluted  earnings per share have been  calculated by also
     including  in  the  computation  the  effect  of  employee  stock  options,
     nonvested  stock,  and similar equity  instruments  granted to employees as
     potential  common shares.  Because the Company  suffered a net loss for the
     three  months and nine months  ended  September  30,  2002,  and 2003,  the
     effects of potential  common shares were not included in the calculation as
     their  effects  would  be  anti-dilutive.   Stock  options  outstanding  at
     September 30, 2002, and 2003, totaled 594,525 and 299,150, respectively.

Note 4. Stock Option Plans

     The Company has three stock-based employee compensation plans:

        (1) The Company has reserved  25,000  shares of Class A common stock for
        issuance  pursuant to an outside director stock option plan. The term of
        each  option  granted  under this plan is six years from the grant date.
        Options  fully  vest on the first  anniversary  of the grant  date.  The
        exercise  price of each stock  option is 85  percent of the fair  market
        value of the common stock on the date of grant. In July 2000 the Company
        granted  outside  directors  12,000 stock  options in the  aggregate not
        covered by this plan.

        (2) The Company has reserved  500,000 shares of Class A common stock for
        issuance  pursuant to an incentive  stock option plan.  Any shares which
        expire  unexercised or are forfeited become available again for issuance
        under the plan.  Under this plan,  no awards of incentive  stock options
        may be made after December 31, 2004.

        (3) The Company has reserved  400,000 shares of Class A common stock for
        issuance pursuant to a new employee  incentive stock option plan adopted
        during 2001. Any shares which expire unexercised or are forfeited become
        available  again for issuance under the plan.  Under this plan, no award
        of incentive stock options may be made after August 6, 2011.

     The Company  accounts for these plans under the recognition and measurement
     principles of Accounting  Principles Board Opinion No. 25,  "Accounting for
     Stock Issued to  Employees,"  and related  Interpretations.  No stock-based
     employee compensation cost is reflected in the statement of operations,  as
     all options  granted to employees  under these plans had an exercise  price
     equal to the market value of the common stock on the date of the grant.


                                       9
<PAGE>

     The following  table  illustrates the effect on net loss and loss per share
     if the Company had applied the fair value  recognition  provisions  of FASB
     Statement  No.  123,   "Accounting   for  Stock-Based   Compensation,"   to
     stock-based  employee  compensation.  The  Company  used the  Black-Scholes
     option  pricing  model to determine the fair value of stock options for the
     three and nine months ended  September  30, 2002,  and 2003.  The following
     assumptions  were  used in  determining  the fair  value of these  options:
     weighted average risk-free  interest rate, 4.55% in 2002 and 2.54% in 2003;
     weighted  average  expected  life,  5 years in 2002 and 2003;  and weighted
     average expected volatility,  61% in 2002, , and 66% in 2003. There were no
     expected  dividends.  For purposes of pro forma disclosures,  the estimated
     fair value of options is amortized  to expense  over the  options'  vesting
     periods.
<TABLE>
                                             Three months ended              Nine months ended
                                                September 30,                   September 30,
                                         ----------------------------    -----------------------------
                                            2002            2003            2002             2003
                                         -----------     ------------    ------------     ------------
<S>                                        <C>              <C>             <C>              <C>
Net loss, as reported                      $  (757)         $  (305)        $(3,955)         $(2,321)
Deduct:  Total stock-based
employee compensation expense
determined under fair value based
method for all awards, net of related
tax effects                                     (1)              (4)             (4)             (13)
                                         -----------     ------------    ------------     ------------
Pro forma net loss                         $  (758)         $  (309)        $(3,959)         $(2,334)
                                         ===========     ============    ============     ============

Loss per share
   Basic and Diluted - as reported         $ (0.16)         $ (0.06)        $ (0.82)         $ (0.48)
   Basic and Diluted - pro forma           $ (0.16)         $ (0.06)        $ (0.82)         $ (0.48)
</TABLE>

Note 5.  Long-Term Debt

     During  November 2003, the Company amended its financing  arrangement  with
     LaSalle  Bank.  The Company  was not in  compliance  with the fixed  charge
     coverage  ratio  requirement  at  September  30, 2003.  The  November  2003
     amendment  revised  the  fixed  charge  coverage  ratio  requirement  as of
     September 30, 2003 to prevent a covenant  violation at such date,  extended
     the  expiration  date of the  agreement  to January 1, 2005,  adjusted  the
     covenant  requirements  going  forward,  and reduced the maximum loan limit
     from $27,500 to $25,000.  In addition,  the Company  amended its  equipment
     financing  arrangement  to provide for adjustment of the tangible net worth
     requirement  going forward.  The Company  believes the covenant  compliance
     requirements  for  its  financing  agreements  are  reasonably  achievable,
     although there can be no assurance that the required financial  performance
     will be achieved.

     During  July 2003,  the  Company  amended its  financing  arrangement  with
     LaSalle Bank. This amendment waived the covenant  violation for the quarter
     ended  June  30,  2003 and also as of July 31,  2003.  The  amendment  also
     extended the  expiration  date of the agreement to July 1, 2004 and reduced
     the maximum loan limit from $32,500 to $27,500.

     During March and April 2003, the Company amended its financing  arrangement
     with LaSalle Bank. These amendments waived covenant  violation at March 31,
     2003,  adjusted the covenant  requirements  going  forward,  increased  the
     interest rate from LaSalle's prime rate to prime rate plus two percent, and
     accelerated  the  expiration  date of the  agreement  to April 1, 2004.  In
     addition,  the  Company  amended its  equipment  financing  arrangement  to
     provide for a waiver of a covenant  violation  at March 31,  2003,  and the
     adjustment of the covenant requirement going forward.

Note 6.  Related Party Transactions

     In  August  2003,  the  Company  generated  approximately  $213 of cash and
     avoided  future  premium  payments by selling one of its two life insurance
     policies  covering its Chief Executive Officer to such officer for the cash
     surrender value.  The transferred  policy has a death benefit of $1,000 and
     the  policy  retained  by the  Company  has a death  benefit  of $750.  The
     transaction was approved by the disinterested directors.

                                       10
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Introduction

         Except for the historical  information contained herein, the discussion
in this quarterly report on Form 10-Q contains  forward-looking  statements that
involve  risk,  assumptions,  and  uncertainties  that are difficult to predict.
Words such as "anticipates,"  "believes,"  "estimates,"  "projects,"  "expects,"
variations  of these words,  and similar  expressions,  are intended to identify
such forward-looking statements.  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;  increased
exposure  with  respect to  accident  claims as a result of a  reduction  of the
Company's  excess  insurance  coverage limit; 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  revised  hours-of-service   requirements  for
drivers; 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 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.

         The Company's  fiscal year ends on December 31 of each year. Thus, this
report  discusses the third quarter and first nine months of the Company's  2002
and 2003 fiscal years.

         For the three  months  ended  September  30,  2003,  operating  revenue
decreased  1.9% to $42.5 million from $43.3  million  during the same quarter in
2002.  Net loss was $305,000,  or ($0.06) per diluted  share,  compared with net
loss of $757,000, or ($0.16) per diluted share, during the 2002 quarter. For the
nine months ended September 30, 2003, operating revenue decreased 4.0% to $124.6
million from $129.7  million  during the same period in 2002.  Net loss was $2.3
million,  or ($0.48) per diluted share,  compared with net loss of $4.0 million,
or ($0.82) per diluted share, during the 2002 period.

         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.

                                       11
<PAGE>
Results of Operations

         The following  table sets forth the percentage  relationship of certain
items to revenue  for the three and nine  months  ended  September  30, 2002 and
2003:
<TABLE>
                                                         Three months ended        Nine months ended
                                                            September 30,            September 30,
                                                       ------------------------  -----------------------
                                                          2002         2003        2002         2003
                                                       -----------  -----------  ----------  -----------
<S>                                                      <C>          <C>          <C>          <C>
Operating revenue.....................................   100.0%       100.0%       100.0%       100.0%
Operating expenses:
         Purchased transportation.....................    37.4         32.7         37.0         34.2
         Compensation and employee benefits...........    28.1         30.3         30.3         30.4
         Fuel, supplies, and maintenance..............    16.0         17.5         15.8         17.9
         Insurance and claims.........................     3.7          3.9          3.9          3.3
         Taxes and licenses...........................     2.0          2.1          2.0          2.1
         General and administrative...................     3.9          4.4          4.2          4.1
         Communication and utilities..................     1.0          0.8          1.0          0.9
         Depreciation and amortization................     9.3          8.2          9.3          8.8
                                                       -----------  -----------  ----------   ----------
         Total operating expenses.....................   101.5         99.9        103.6        101.7
                                                       -----------  -----------  ----------   ----------
Income (Loss) from operations.........................    (1.5)         0.1         (3.6)        (1.7)
Interest expense, net.................................     1.1          1.0          1.2          1.1
                                                       -----------  -----------  ----------   ----------
Loss before income taxes..............................    (2.6)        (0.9)        (4.8)        (2.8)
Income tax benefit....................................    (0.9)        (0.2)        (1.7)        (0.9)
                                                       -----------  -----------  ----------   ----------
Net loss..............................................    (1.7)%       (0.7)%       (3.0)%       (1.9)%
                                                       ===========  ===========  ==========   ==========
</TABLE>
Comparison  of three months ended  September  30, 2003,  with three months ended
September 30, 2002.

         Operating  revenue  decreased  $811,000 (1.9%), to $42.5 million in the
2003 quarter from $43.3  million in the 2002  quarter.  Lower  weighted  average
tractors, partially offset by increased average revenue per tractor per week and
increased fuel surcharge revenue, were responsible for the decrease in operating
revenue.  Weighted average tractors  decreased to 1,208 in the 2003 quarter from
1,359 in the 2002  quarter as the Company  disposed of a portion of its unseated
company  owned  tractors  and  contracted  with  fewer  independent   contractor
providers  of  equipment.  The Company  does not plan to increase  the number of
tractors  in its  fleet  in the near  term  unless  its  number  of  independent
contractors increases.  Average operating revenue per tractor per week increased
to $2,704 in the 2003 quarter from $2,449 in the 2002 quarter. Operating revenue
includes  revenue from  operating  our trucks as well as other,  more  volatile,
revenue  items,  including fuel  surcharge,  brokerage,  and other revenue.  The
Company believes the analysis of tractor productivity is more meaningful if fuel
surcharge,  brokerage,  and other  revenue are  excluded  from the  computation.
Revenue per tractor per week  (excluding fuel  surcharge,  brokerage,  and other
revenue)  increased  to  $2,495  in the 2003  quarter  from  $2,273  in the 2002
quarter,  primarily due to increased production from our seated company tractors
and a lower  number of  unseated  company  tractors.  Revenue  per  loaded  mile
(excluding fuel surcharge,  brokerage,  and other revenue) increased to $1.39 in
the 2003 quarter from $1.38 in the 2002 quarter. Finally, fuel surcharge revenue
increased $399,000 to $1.3 million in the 2003 quarter from $942,000 in the 2002
quarter. During the 2003 and 2002 quarters, approximately $942,000 and $537,000,
respectively,  of the fuel surcharge  revenue collected helped to offset Company
fuel costs. The remainder was passed through to independent contractors.

         Purchased  transportation consists primarily of payments to independent
contractor  providers  of  revenue  equipment,  expenses  related  to  brokerage
activities, and payments under operating leases of revenue equipment.  Purchased
transportation  decreased  $2.3 million  (14.2%),  to $13.9  million in the 2003
quarter from $16.2  million in the 2002  quarter.  As a  percentage  of revenue,
purchased  transportation  decreased  to 32.7% of  revenue  in the 2003  quarter
compared with 37.4% in the 2002 quarter. These changes reflect a decrease in the
percentage of the fleet supplied by independent contractors and in the number of
independent   contractors.   Management  believes  the  decline  in  independent
contractors as a percentage of the Company's  fleet is attributable to high fuel
costs, high insurance costs, tighter credit standards,  and slow freight demand,
which have  diminished  the pool of drivers  interested in becoming or remaining
independent  contractors.  The percentage of total operating revenue provided by
independent contractors decreased to 36.0% in the 2003 quarter from 40.7% in the
2002 quarter.

                                       12
<PAGE>
         Compensation and employee benefits  increased $746,000 (6.1%), to $12.9
million  in the 2003  quarter  from  $12.1  million  in the 2002  quarter.  As a
percentage of revenue,  compensation and employee benefits increased to 30.3% in
the 2003 quarter from 28.1% in the 2002  quarter  reflecting  an increase in the
percentage  of the fleet  comprised of company owned  tractors,  and higher fuel
prices,  an  increase  in  health  and  workers'  compensation  claims  paid and
reserved,  and  additional  wages  paid  to  new  drivers  for  sign-on  bonuses
implemented to enhance driver recruiting. These factors were partially offset by
a  decrease  in  wages  paid  to  non-driver   employees  resulting  from  staff
reductions.

         Fuel,  supplies,  and maintenance  increased  $491,000 (7.1%),  to $7.4
million  in the  2003  quarter  from  $6.9  million  in the 2002  quarter.  As a
percentage of revenue,  fuel,  supplies,  and maintenance  increased to 17.5% of
revenue  in the 2003  quarter  compared  with  16.0% in the 2002  quarter.  This
reflects an increase in the  percentage of the fleet  comprised of company owned
tractors and higher fuel prices. Although fuel prices increased approximately 7%
to an average of $1.39 per gallon in the 2003  quarter  from $1.30 per gallon in
the 2002 quarter, the increase in fuel prices was partially offset by a $405,000
increase in fuel surcharge revenue which is included in operating revenue.

         Insurance and claims increased  $50,000 (3.1%),  to $1.7 million in the
2003 quarter from $1.6 million in the 2002 quarter.  As a percentage of revenue,
insurance and claims  increased to 3.9% of revenue in the 2003 quarter from 3.7%
in the 2002  quarter.  The Company's  insurance  coverage was renewed on July 1,
2003  without  modification  to the  self-retention  level  ($250,000),  but the
Company's  excess  insurance   coverage  limit  was  reduced  to  $2.0  million.
Management  expects  insurance and claims  expense,  as a percentage of revenue,
will  remain at current  levels in future  periods  unless the  Company  were to
experience  an increase in the number or severity of accidents  over the reduced
excess policy  coverage limit,  which could result in a substantial  increase in
this expense category as a percentage of revenue.

         Taxes and licenses  increased  $21,000 (2.4%),  to $893,000 in the 2003
quarter from $872,000 in the 2002 quarter reflecting an increase in the need for
over-dimensional permits, partially offset by a decrease in the weighted average
number of tractors in the fleet. As a percentage of revenue,  taxes and licenses
remained  relatively  constant at 2.1% of revenue in the 2003  quarter  compared
with 2.0% in the 2002 quarter.

         General and administrative  expenses increased $159,000 (9.3%), to $1.9
million  in the  2003  quarter  from  $1.7  million  in the 2002  quarter.  As a
percentage of revenue,  general and administrative expenses increased to 4.4% of
revenue in the 2003 quarter  compared  with 3.9% of revenue in the 2002 quarter.
During the quarter,  decreases  attributable to successful cost cutting measures
and the  elimination  of  commissioned  agents at two locations were offset by a
$252,000 increase in professional and consulting fees.

         Communications and utilities  decreased $81,000 (19.4%), to $337,000 in
the 2003 quarter from $418,000 in the 2002 quarter  reflecting a decrease in the
weighted  average  number  of  tractors  in the fleet  and the  closing  of five
operating terminals and two maintenance facilities.  As a percentage of revenue,
communications  and  utilities  decreased to 0.8% of revenue in the 2003 quarter
compared with 1.0% of revenue in the 2002 quarter.

         Depreciation  and  amortization  decreased  $575,000  (14.2%),  to $3.5
million in the 2003 quarter from $4.0 million in the 2002  quarter.  The gain or
loss on retirement, sale, or write-down of equipment is included in depreciation
and  amortization.  In the 2003 and 2002 quarter,  depreciation and amortization
included  net  gains  from  the  sale  of  equipment  of  $76,000  and  $88,000,
respectively.   As  a  percentage  of  revenue,  depreciation  and  amortization
decreased to 8.2% of revenue in the 2003 quarter  compared  with 9.3% of revenue
in the 2002 quarter  because of higher  revenue per seated  tractor,  which more
effectively  spread  this cost,  and a decrease  in the number of  tractors  and
trailers being depreciated.

         Interest expense,  net,  decreased $69,000 (14.0%),  to $423,000 in the
2003 quarter from  $492,000 in the 2002 quarter  reflecting  lower  average debt
outstanding,  partially  offset by higher  interest  rates.  As a percentage  of
revenue,  interest expense, net, remained relatively constant at 1.0% of revenue
in the 2003 quarter compared with 1.1% of revenue in the 2002 quarter.

         As a result of the foregoing,  the Company's  pre-tax margin was (0.9%)
in the 2003 quarter versus (2.6%) in the 2002 quarter.

         The  Company's  income tax benefit in the 2003 quarter was $86,000,  or
22.0% of loss before income taxes.

                                       13
<PAGE>
The Company's  income tax benefit in the 2002 quarter was $383,000,  or 33.6% of
loss before income taxes. In both quarters,  the effective tax rate is different
from 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  level of the
Company's pre-tax earnings.

         As a result of the factors  described  above,  net loss was $305,000 in
the 2003 quarter  (0.7% of revenue),  compared  with net loss of $757,000 in the
2002 quarter (1.7% of revenue).

Comparison  of nine months  ended  September  30,  2003,  with nine months ended
September 30, 2002.

         Operating  revenue  decreased $5.1 million (4.0%), to $124.6 million in
the 2003 period from $129.7 million in the 2002 period.  Lower weighted  average
tractors, partially offset by increased average revenue per tractor per week and
increased fuel surcharge revenue, were responsible for the decrease in operating
revenue.  Weighted average  tractors  decreased to 1,250 in the 2003 period from
1,447 in the 2002  period as the Company  disposed of a portion of its  unseated
company  owned  tractors  and  contracted  with  fewer  independent   contractor
providers  of  equipment.  The Company  does not plan to increase  the number of
tractors  in its  fleet  in the near  term  unless  its  number  of  independent
contractors increases.  Average operating revenue per tractor per week increased
to $2,556 in the 2003 period from $2,299 in the 2002 period.  Operating  revenue
includes  revenue from  operating  our trucks as well as other,  more  volatile,
revenue  items,  including fuel  surcharge,  brokerage,  and other revenue.  The
Company believes the analysis of tractor productivity is more meaningful if fuel
surcharge,  brokerage,  and other  revenue are  excluded  from the  computation.
Average revenue per tractor per week (excluding fuel surcharge,  brokerage,  and
other  revenue)  increased  to $2,345 in the 2003 period from $2,157 in the 2002
period,  primarily due to a lower number of unseated company  tractors.  Revenue
per  loaded  mile  (excluding  fuel  surcharge,  brokerage,  and other  revenue)
increased  to $1.37 in the 2003 period from $1.36 in the 2002  period.  Finally,
fuel surcharge revenue increased $2.7 million to $4.5 million in the 2003 period
from  $1.8  million  in the 2002  period.  During  the  2003  and 2002  periods,
approximately $3.0 million and $1.0 million, respectively, of the fuel surcharge
revenue  collected helped to offset Company fuel costs. The remainder was passed
through to independent contractors.

         Purchased  transportation consists primarily of payments to independent
contractor  providers  of  revenue  equipment,  expenses  related  to  brokerage
activities, and payments under operating leases of revenue equipment.  Purchased
transportation  decreased  $5.4 million  (11.3%),  to $42.6  million in the 2003
period  from $48.0  million in the 2002  period.  As a  percentage  of  revenue,
purchased  transportation  decreased  to 34.2%  of  revenue  in the 2003  period
compared with 37.0% in the 2002 period.  These changes reflect a decrease in the
percentage of the fleet supplied by independent contractors and in the number of
independent   contractors.   Management  believes  the  decline  in  independent
contractors as a percentage of the Company's  fleet is attributable to high fuel
costs, high insurance costs, tighter credit standards,  and slow freight demand,
which have  diminished  the pool of drivers  interested in becoming or remaining
independent  contractors.  The percentage of total operating revenue provided by
independent  contractors decreased to 37.8% in the 2003 period from 40.8% in the
2002 period.

         Compensation and employee  benefits  decreased $1.4 million (3.5%),  to
$37.9  million in the 2003 period from $39.3  million in the 2002  period.  As a
percentage of revenue,  compensation and employee benefits  remained  relatively
constant  at 30.4%  in the 2003  period  compared  to 30.3% in the 2002  period.
Decreases in wages paid to non-driver  employees resulting from staff reductions
and a decrease in workers'  compensation claims paid and reserved were offset by
additional wages paid to new drivers for sign-on bonuses  implemented to enhance
driver recruiting and increased health claims and premiums in the 2003 period.

         Fuel, supplies, and maintenance increased $1.9 million (9.4%), to $22.4
million  in the  2003  period  from  $20.4  million  in the  2002  period.  As a
percentage of revenue,  fuel,  supplies,  and maintenance  increased to 17.9% of
revenue in the 2003 period compared with 15.8% in the 2002 period. This reflects
an increase in the  percentage of the fleet  comprised of company owned tractors
and higher fuel prices.  Although fuel prices increased  approximately 17% to an
average of $1.43 per gallon in the 2003 period from $1.22 per gallon in the 2002
period,  the  increase in fuel  prices was  partially  offset by a $2.0  million
increase in fuel surcharge revenue which is included in operating revenue.

         Insurance and claims decreased $904,000 (17.8%), to $4.2 million in the
2003 period from $5.1  million in the 2002 period.  As a percentage  of revenue,
insurance  and claims  decreased to 3.3% of revenue in the 2003 period  compared
with 3.9% in the 2002 period,  primarily due to a net premium refund of $467,000
for the policy year

                                       14
<PAGE>
ended June 30, 2002, upon accepting a $75,000 increase in self-insured retention
for such policy year. The cost of insurance and claims  increased  substantially
on July 1, 2002,  when the Company  increased its  self-insured  retention  from
$50,000 to  $250,000  per  occurrence,  without a premium  reduction  that fully
offset the increase in retention.  The higher  self-insured  retention increases
the Company's risk associated with frequency and severity of accidents and could
increase  the  Company's  expenses  or make them more  volatile  from  period to
period. The insurance policies were renewed on July 1, 2003 without modification
to the  self-retention  level, but the Company's excess insurance coverage limit
was reduced to $2.0 million. Management expects insurance and claims expense, as
a percentage of revenue,  will remain at current levels in future periods unless
the  Company  were to  experience  an  increase  in the  number or  severity  of
accidents over the reduced excess policy coverage limit, which could result in a
substantial increase in this expense category as a percentage of revenue.

         Taxes and licenses  decreased  $55,000  (2.1%),  to $2.6 million in the
2003 period from $2.6  million in the 2002 period  reflecting  a decrease in the
weighted  average  number  of  tractors  in the  fleet,  partially  offset by an
increase in the need for  over-dimensional  permits. As a percentage of revenue,
taxes and licenses remained  relatively  constant at 2.1% of revenue in the 2003
compared with 2.0% of revenue in the 2002 period.

         General and administrative  expenses decreased $364,000 (6.7%), to $5.1
million in the 2003 period from $5.4 million in the 2002 period. As a percentage
of revenue,  general and administrative expenses remained relatively constant at
4.1% of revenue  in the 2003  period  compared  with 4.2% of revenue in the 2002
period.  During the period,  decreases  attributable  to successful cost cutting
measures  and the  elimination  of  commissioned  agents at two  locations  were
partially  offset by a $604,000  increase in professional and consulting fees in
the 2003 period.

         Communications  and  utilities  decreased  $227,000  (16.7%),  to  $1.1
million in the 2003 period from $1.4  million in the 2002  period  reflecting  a
decrease in the weighted average number of tractors in the fleet and the closing
of five operating terminals and two maintenance  facilities.  As a percentage of
revenue,  communications and utilities remained  relatively  constant at 0.9% of
revenue in the 2003 period compared with 1.0% of revenue in the 2002 period.

         Depreciation and amortization  decreased $1.1 million (9.3%),  to $11.0
million in the 2003 period from $12.1  million in the 2002  period.  The gain or
loss on retirement, sale, or write-down of equipment is included in depreciation
and  amortization.  In the 2003 and 2002 period,  depreciation  and amortization
included  net  gains  from the  sale of  equipment  of  $355,000  and  $791,000,
respectively.   As  a  percentage  of  revenue,  depreciation  and  amortization
decreased to 8.8% of revenue in the 2003 period compared with 9.3% of revenue in
the 2002  period  because  of higher  revenue  per  seated  tractor,  which more
effectively  spread  this cost,  and a decrease  in the number of  tractors  and
trailers being depreciated.

         Interest expense,  net, decreased $196,000 (12.6%),  to $1.4 million in
the 2003 period from $1.6 million in the 2002 period  reflecting  lower  average
debt outstanding,  partially offset by higher interest rates. As a percentage of
revenue,  interest expense, net, decreased to 1.1% of revenue in the 2003 period
compared with 1.2% in the 2002 period.

         As a result of the foregoing,  the Company's  pre-tax margin was (2.8%)
in the 2003 period versus (4.8%) in the 2002 period.

         The  Company's  income tax benefit was $1.2 million in the 2003 period,
or 34.4% of loss before  income taxes.  The Company's  income tax benefit in the
2002 period was $2.2  million,  or 35.9% of loss before  income  taxes.  In both
periods, the effective tax rate is different from 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 level of the Company's pre-tax earnings.

         As a result of the factors  described  above, net loss was $2.3 million
in the 2003 period (1.9% of revenue),  compared with net loss of $4.0 million in
the 2002 period (3.0% of revenue).

                                       15
<PAGE>
Liquidity and Capital Resources

         Uses and Sources of Cash

         The Company  requires cash to fund working capital  requirements and to
service its debt.  The Company has  historically  financed  acquisitions  of new
equipment 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 have been funds provided by
operations and borrowings under credit arrangements with financial  institutions
and equipment manufacturers. The Company's ability to fund its cash requirements
in future periods will depend on its ability to comply with covenants  contained
in financing arrangements, and will require improvement in its operating results
and cash flow. The Company's  ability to achieve the required  improvements will
depend on general shipping demand of the Company's  customers,  fuel prices, the
availability  of  drivers  and  independent  contractors,  insurance  and claims
experience,  and other  factors.  Management  is in the process of  implementing
several steps,  some of which were developed with the assistance of a consulting
firm  engaged  by the board of  directors,  that are  intended  to  improve  the
Company's operating results and achieve compliance with the financial covenants.
These steps include:  consolidating  terminals;  improving the  utilization  per
tractor through a full-time production manager;  implementing a yield management
program in which the Company seeks additional favorable freight while ceasing to
haul  less  favorable  freight;  and  identifying   additional  areas  for  cost
containment,  including,  personnel  costs and  reducing  the  Company's  excess
insurance  coverage  limit  effective  July 1,  2003 to $2.0  million.  Although
management believes these steps have helped reduce the Company's losses compared
with the same quarter and nine months in 2002, additional improvement is needed,
and particularly considering seasonally slower shipping demand during the fourth
and first quarters,  there is no assurance that the  improvements  will occur as
planned.

         Although  there  can be no  assurance,  management  believes  that cash
generated by operations and available  sources of financing for  acquisitions of
revenue equipment,  although such sources are limited,  will be adequate to meet
its currently  anticipated  working  capital  requirements  and other cash needs
through  September 30, 2004. To the extent that actual  results or events differ
from  management's  financial  projections  or  business  plans,  the  Company's
liquidity may be adversely affected.  Specifically,  the Company's liquidity may
be adversely affected by one or more of the following  factors:  continuing weak
freight  demand or a loss in customer  relationships  or volume;  the ability to
attract and retain sufficient numbers of qualified drivers and  owner-operators;
elevated  fuel  prices  and  the  ability  to  collect  fuel  surcharges;  costs
associated  with  insurance  and  claims;  increased  exposure  with  respect to
accident  claims as a result of a reduction of the  Company's  excess  insurance
coverage limit;  inability to maintain compliance with, or negotiate  amendments
to, loan  covenants;  and the  possibility  of  shortened  payment  terms by the
Company's  suppliers and vendors  worried  about the  Company's  ability to meet
payment obligations. The Company expects to fund its cash requirements primarily
with cash generated  from  operations  and revolving  borrowings  under its bank
financing.

         Net cash provided by operating activities was $7.9 million for the nine
months ended September 30, 2003, compared with $6.6 million for the 2002 period.
The increase in net cash provided by operating  activities  was primarily due to
improved operating results.  Historically,  the Company's  principal use of cash
from  operations is to service debt and to internally  finance  acquisitions  of
revenue equipment.  Total receivables increased $2.3 million for the nine months
ended  September  30,  2003.  The average age of the  Company's  trade  accounts
receivable was  approximately  33.8 days in the 2002 period and 34.0 days in the
2003 period.

         Net cash provided by investing activities was $2.7 million for the nine
months ended  September 30, 2003 compared with $3.0 million for the 2002 period.
Such amounts  related  primarily to sales of revenue  equipment  and other fixed
assets.

         Net cash used in financing  activities  was $10.6  million for the nine
months ended  September 30, 2003 compared with $9.7 million for the 2002 period.
Net cash used in  financing  primarily  consisted  of net  payments of principal
under the Company's long-term debt agreements.

                                       16
<PAGE>
         The  Company has a  financing  arrangement  with  LaSalle  Bank,  which
expires on January 1, 2005, and provides for automatic  month-to-month  renewals
under certain conditions. LaSalle may terminate the arrangement prior to January
1, 2005,  in the event of  default,  and may  terminate  at  anytime  during the
renewal  terms.  The  arrangement  provides for a term loan, a revolving line of
credit,  a capital  expenditure  loan, and financing for letters of credit.  The
combination  of all loans with  LaSalle  Bank cannot  exceed the lesser of $25.0
million or a specified borrowing base.

         At September 30, 2003,  the term loan had a principal  balance of $10.3
million,  payable in equal  monthly  principal  installments  of  $202,678.  The
revolving  line of credit  allows for  borrowings  up to 85 percent of  eligible
receivables.  At September 30, 2003,  total  borrowings under the revolving line
were  $578,000.  The  capital  expenditure  loan allows for  borrowing  up to 80
percent of the purchase price of revenue equipment purchased with such advances,
provided  borrowings  under the  capital  expenditure  loan are  limited to $2.0
million  annually,  and  $4.0  million  over  the  term of the  arrangement.  At
September  30, 2003,  the amount owed under capital  expenditure  notes was $1.0
million.  At September 30, 2003, the Company had  outstanding  letters of credit
totaling $7.4 million for  self-insured  amounts  under its insurance  programs.
These  letters of credit  directly  reduce the  amount of  potential  borrowings
available  under  the  financing  arrangement.   Any  increase  in  self-insured
retention,  as well as  increases  in claim  reserves,  may  require  additional
letters of credit to be posted,  which  would  negatively  affect the  Company's
liquidity.  At  September  30, 2003,  the  Company's  borrowing  limit under the
financing  arrangement was $23.1 million,  leaving approximately $3.8 million in
remaining availability at such date.

         The Company is required to pay a facility fee on the LaSalle  financing
arrangement  of .25% of the maximum loan limit.  In order to reduce  costs,  the
maximum  loan limit was  reduced  from $32.5  million to $27.5  million in March
2003, and from $27.5 million to $25.0 million in November 2003, as the Company's
actual  borrowing  capacity is not expected to exceed $25.0 million.  Borrowings
under the  arrangement  are  secured  by liens on  revenue  equipment,  accounts
receivable,  and  certain  other  assets.  In  connection  with the  March  2003
amendment, the interest rate on outstanding borrowings under the arrangement was
increased from LaSalle's prime rate to the prime rate plus two percent.

         The LaSalle  financing  arrangement  requires  compliance  with certain
financial  covenants,  including  compliance with a minimum  tangible net worth,
capital  expenditure  limits, and a fixed charge coverage ratio. The Company was
in compliance  with the tangible net worth  covenant at September 30, 2003.  The
Company was not in compliance with the fixed charge  coverage ratio  requirement
at September 30, 2003.  However,  the financing  arrangement was amended,  which
revised the fixed charge coverage ratio  requirement as of September 30, 2003 to
prevent a covenant  violation at such date,  extended the expiration date of the
agreement to January 1, 2005, adjusted the covenant  requirements going forward,
and  reduced  the  maximum  loan limit from  $27,500 to  $25,000.  In  addition,
equipment  financing provided by a manufacturer  contains a minimum tangible net
worth  requirement.  The Company was in  compliance  with the  required  minimum
tangible net worth  requirement at September 30, 2003.  Although there can be no
assurance, management expects to remain in compliance with the various financial
covenants under its financing  arrangements going forward.  If the Company fails
to maintain compliance with these financial covenants,  or to obtain a waiver of
any  noncompliance,  the  lenders  will  have  the  right  to  declare  all sums
immediately  due and pursue  other  remedies.  In such an event,  the  Company's
liquidity would be materially and adversely impacted,  and the Company's ability
to continue as a going  concern  could be called  into  question if  alternative
financing could not be found.

                                       17
<PAGE>
         Contractual Obligations and Commercial Commitments

         The following  tables set forth the  contractual  obligations and other
commercial commitments as of September 30, 2003:
<TABLE>
                                                                Principal Payments Due by Year
                                                                        (In Thousands)

                                                                  Less than                                   After
  Contractual Obligations                             Total        One year       2-3 years     4-5 years    5 years
  ------------------------------------------------------------------------------------------------------------------
  <S>                                                <C>             <C>           <C>           <C>           <C>
  Long-term debt                                     $36,148       $11,197         $15,598       $9,353        $ -
  Line of credit                                         578             -             578            -          -
  Operating leases                                     1,056           351             404          316         88
                                                --------------------------------------------------------------------
  Total contractual cash obligations                 $37,782       $11,548         $16,580       $9,669        $88
                                                ====================================================================
</TABLE>
The Company had no other commercial commitments at September 30, 2003. Long-term
debt payment dates assume continued compliance with debt covenants.


                                       18
<PAGE>
Critical Accounting Policies

         The  preparation of financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make decisions based upon estimates,  assumptions,  and factors it
considers as relevant to the circumstances. Such decisions include the selection
of  applicable   accounting   principles  and  the  use  of  judgment  in  their
application,  the results of which  impact  reported  amounts  and  disclosures.
Changes in future economic conditions or other business circumstances may affect
the outcomes of  management's  estimates and  assumptions.  Accordingly,  actual
results  could  differ  from those  anticipated.  A summary  of the  significant
accounting policies followed in preparation of the financial statements included
in  this  Form  10-Q  is  contained  in  Note  1 of the  consolidated  financial
statements  included in the Company's  Form 10-K for the year ended December 31,
2002.  Other  footnotes  in the  Form  10-K  describe  various  elements  of the
financial  statements  included in this Form 10-Q and the  assumptions  on which
specific amounts were determined.

         The Company's critical accounting policies include the following:

         Revenue Recognition

         The Company generally  recognizes operating revenue when the freight to
be  transported  has  been  loaded.   The  Company  operates  primarily  in  the
short-to-medium  length haul category of the trucking industry;  therefore,  the
Company's   typical  customer  delivery  is  completed  one  day  after  pickup.
Accordingly, this method of revenue recognition is not materially different from
recognizing  revenue  based on completion  of delivery.  The Company  recognizes
operating  revenue  when the  freight is  delivered  for longer haul loads where
delivery  is  completed  more  than one day after  pickup.  Amounts  payable  to
independent  contractors  for purchased  transportation,  to Company drivers for
wages,  and other  direct  expenses  are  accrued  when the  related  revenue is
recognized.

         Property and Equipment

         Property and equipment are recorded at cost.  Depreciation  is provided
by use of the straight-line and declining-balance  methods over lives of 5 to 39
years  for  buildings  and  improvements,  5 years  for  tractors,  7 years  for
trailers,  and 3 to 10 years for other  equipment.  Tires  purchased  as part of
revenue equipment are capitalized as a cost of the equipment.  Replacement tires
are expensed  when placed in service.  Expenditures  for  maintenance  and minor
repairs are charged to operations,  and expenditures for major  replacements and
betterments are capitalized.  The cost and related  accumulated  depreciation on
property and equipment retired, traded, or sold are eliminated from the property
accounts  at the  time  of  retirement,  trade,  or  sale.  The  gain or loss on
retirement  or  sale  is  included  in  depreciation  and  amortization  in  the
consolidated statements of operation.  Gains or losses on trade-ins are included
in the basis of the new asset.

         Estimated Liability for Insurance Claims

         Losses  resulting  from  auto  liability,   physical  damage,  workers'
compensation,  and cargo  loss and damage are  covered by  insurance  subject to
certain deductibles.  Losses resulting from uninsured claims are recognized when
such losses are known and can be estimated.  The Company estimates and accrues a
liability for its share of ultimate settlements using all available information.
The Company accrues for claims reported,  as well as for claims incurred but not
reported,  based upon the Company's past  experience.  Expenses depend on actual
loss  experience and changes in estimates of settlement  amounts for open claims
which have not been fully resolved.  However,  final  settlement of these claims
could  differ  materially  from the amounts the Company has accrued at year-end.
Management's judgment concerning the ultimate cost of claims and modification of
initial reserved  amounts is an important part of establishing  claims reserves,
and is of increasing significance with higher self-insured retention.

         Impairment of Long-Lived Assets

         Long-lived  assets  are  reviewed  for  impairment  whenever  events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  Recoverability  of assets to be held and used is measured by a
comparison of the carrying  amount of an asset to future net  undiscounted  cash
flows expected to be generated by the asset.  Management's  judgment  concerning
future cash flows is an important part of this determination. If such assets are
considered  to be impaired,  the  impairment to be recognized is measured by the
amount by which the carrying  amount of the assets exceeds the fair value of the
assets.  Assets to be  disposed  of are  reported  at the lower of the  carrying
amount or fair value less the costs to sell. The Company has decided to maintain
its revenue

                                       19
<PAGE>
equipment for the foreseeable  future and not replace aging tractors.  If resale
values  remain at current  levels or decline,  the  Company may incur  increased
maintenance  costs and a lower  gain or loss on sale  resulting  from  retaining
equipment even longer.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to market risks from changes in certain interest
rates on its debt. In connection  with the March 2003  amendment,  the Company's
financing  arrangement  with  LaSalle  Bank was  amended  to  provide a variable
interest rate based on LaSalle's prime rate plus two percent, provided there has
been no default. Prior to the amendment the variable interest rate was LaSalle's
prime rate. In addition, approximately $23.3 million of the Company's other debt
carries variable  interest rates.  This variable interest exposes the Company to
the risk that interest rates may rise.  Assuming  borrowing  levels at September
30, 2003, a one-point  increase in the prime rate would increase annual interest
expense by  approximately  $352,000.  The remainder of the Company's  other debt
carries fixed  interest  rates and exposes the Company to the risk that interest
rates may fall. At September 30, 2003,  approximately  96% of the Company's debt
carries a variable interest rate and the remainder is fixed.

ITEM 4.  CONTROLS AND PROCEDURES

         As required  by Rule 13a-15  under the  Exchange  Act,  the Company has
carried out an  evaluation of the  effectiveness  of the design and operation of
the  Company's  disclosure  controls and  procedures as of the end of the period
covered by this report.  This  evaluation was carried out under the  supervision
and with the  participation  of the  Company's  management,  including its Chief
Executive Officer and its Chief Financial  Officer.  Based upon that evaluation,
our Chief  Executive  Officer and Chief  Financial  Officer  concluded  that our
controls and  procedures  were  effective as of the end of the period covered by
this  report.  There were no  changes in our  internal  control  over  financial
reporting  that  occurred  during the period  covered by this  report  that have
materially  affected  or that are  reasonably  likely to  materially  affect the
Company's internal control over financial reporting.

         Disclosure  controls and procedures  are controls and other  procedures
that are  designed to ensure that  information  required to be  disclosed in the
Company's  reports  filed or  submitted  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's rules and forms.  Disclosure  controls and
procedures  include controls and procedures  designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive   Officer  as  appropriate,   to  allow  timely  decisions   regarding
disclosures.

         The Company has  confidence  in its internal  controls and  procedures.
Nevertheless,  the Company's  management,  including the Chief Executive Officer
and Chief Financial Officer,  does not expect that our disclosure procedures and
controls or our internal controls will prevent all errors or intentional  fraud.
An internal  control  system,  no matter how  well-conceived  and operated,  can
provide only  reasonable,  not absolute,  assurance  that the objectives of such
internal  controls are met.  Further,  the design of an internal  control system
must reflect the fact that there are resource  constraints,  and the benefits of
controls  must be  considered  relative to their costs.  Because of the inherent
limitations  in all internal  control  systems,  no  evaluation  of controls can
provide  absolute  assurance that all control issues and instances of fraud,  if
any, within the Company have been detected.



                                       20
<PAGE>
                                     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

         The  Company's   financing   arrangement  with  LaSalle  Bank  requires
compliance with certain financial covenants, including compliance with a minimum
tangible net worth,  capital  expenditure  limits,  and a fixed charge  coverage
ratio.  The Company was in  compliance  with the tangible net worth  covenant at
September  30,  2003.  The Company was not in  compliance  with the fixed charge
coverage  ratio  requirement  at September  30,  2003.  However,  the  financing
arrangement  was  amended,   which  revised  the  fixed  charge  coverage  ratio
requirement  as of  September  30, 2003 to prevent a covenant  violation at such
date, extended the expiration date of the agreement to January 1, 2005, adjusted
the covenant requirements going forward, and reduced the maximum loan limit from
$27,500 to $25,000.  Although there can be no assurance,  management  expects to
remain in compliance  with the various  financial  covenants under its financing
arrangements  going forward.  If the Company fails to maintain  compliance  with
these  financial  covenants,  or to  obtain a waiver of any  noncompliance,  the
lenders will have the right to declare all sums immediately due and pursue other
remedies.  In such an event,  the Company's  liquidity  would be materially  and
adversely  impacted,  and the  Company's  ability to continue as a going concern
could be called into question if alternative financing could not be found.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         None.


                                       21
<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
<TABLE>
Exhibit
Number                                         Description
<S>        <C>             <C>
3.1        *               Articles of Incorporation.

3.2        *               Bylaws.

4.1        *               Articles of Incorporation.

4.2        *               Bylaws.

10.16      #               Sixth  Amendment to Amended and  Restated  Loan and  Security  Agreement  dated July 31,
                           2003,  between  LaSalle Bank  National  Association,  Smithway  Motor  Xpress,  Inc., as
                           Borrower, and East West Motor Express, Inc., as Borrower.

31.1       #               Certification  pursuant to Item  601(b)(31)  of Regulation  S-K, as adopted  pursuant to
                           Section 302 of the  Sarbanes-Oxley Act of 2002, by William G. Smith, the Company's Chief
                           Executive Officer

31.2       #               Certification  pursuant to Item  601(b)(31)  of Regulation  S-K, as adopted  pursuant to
                           Section 302 of the  Sarbanes-Oxley  Act of 2002, by G. Larry Owens,  the Company's Chief
                           Financial Officer

32.1       #               Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                           the  Sarbanes-Oxley  Act of 2002,  by William G. Smith,  the Company's  Chief  Executive
                           Officer

32.2       #               Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002, by G. Larry Owens, the Company's Chief Financial Officer
--------------------------
*        Incorporated by reference from the Company's Registration Statement on Form S-1, Registration No. 33-90356,
         effective June 27, 1996.
#        Filed herewith.

(b)      Reports on Form 8-K.

         During the quarter  ended  September  30, 2003,  the Company  filed with,  or furnished  to, the  Securities  and Exchange
         Commission (the "Commission") the following Current Report on Form 8-K:

         Current  Report on Form 8-K dated August 1, 2003 (filed with the  Commission  on August 8, 2003)  reporting  the Company's
         issuance of a press release to announce financial and operating results for the quarter ended June 30, 2003.
</TABLE>
                                       22
<PAGE>
                                   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 thereunto duly authorized.

                               SMITHWAY MOTOR XPRESS CORP.


Date: November 13, 2003        By:  /s/ G. Larry Owens
                                 ---------------------------------------
                                 G. Larry Owens
                                 Executive Vice President, Chief Administrative
                                 Officer, and Chief Financial Officer, in his
                                 capacity as such and on behalf of the issuer









                                       23