<PAGE>
                                  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, 2005

                                       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)

<TABLE>
<S>                                                          <C>
                 NEVADA                                           42-1433844
    (State or Other Jurisdiction of                            (I.R.S. Employer
     Incorporation or Organization)                          Identification No.)
</TABLE>

<TABLE>
<S>                                                               <C>
            2031 QUAIL AVENUE
            FORT DODGE, IOWA                                         50501
(Address of Principal Executive Offices)                          (Zip Code)
</TABLE>

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 Exchange Act).

YES [ ] NO [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

YES [ ] NO [X]

As of October 28, 2005, the registrant had 3,936,624 shares of Class A Common
Stock and 1,000,000 shares of Class B Common Stock outstanding.


                                        1

<PAGE>


<TABLE>
<CAPTION>
                                                                           PAGE
                                                                          NUMBER
                                                                          ------
<S>      <C>                                                              <C>
                                     PART I
                              FINANCIAL INFORMATION

Item 1   Financial Statements                                                3

         Condensed Consolidated Balance Sheets as of December 31, 2004
            and September 30, 2005 (unaudited).........................      3

         Condensed Consolidated Statements of Operations for the three
            and nine months ended September 30, 2004 and 2005
            (unaudited)................................................      5

         Condensed Consolidated Statements of Cash Flows for the nine
            months ended September 30, 2004 and 2005 (unaudited).......      6

         Notes to Condensed Consolidated Financial Statements
            (unaudited)................................................      7

Item 2   Management's Discussion and Analysis of Financial Condition
            and Results of Operations..................................      9

Item 3   Quantitative and Qualitative Disclosures About Market Risk....     19

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

                                     PART II
                                OTHER INFORMATION

Item 1   Legal Proceedings.............................................     20

Item 2   Unregistered Sales of Equity Securities and Use of Proceeds...     20

Item 3   Defaults Upon Senior Securities...............................     20

Item 4   Submission of Matters to a Vote of Security Holders...........     20

Item 5   Other Information.............................................     20

Item 6   Exhibits......................................................     21

Signatures.............................................................     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)

<TABLE>
<CAPTION>
                                          DECEMBER 31,   SEPTEMBER 30,
                                              2004            2005
                                          ------------   -------------
                                                          (unaudited)
<S>                                       <C>            <C>
                 ASSETS

Current assets:
   Cash and cash equivalents ..........     $  5,054        $  1,423
   Receivables, net:
      Trade ...........................       16,289          21,133
      Other ...........................          487             957
   Inventories ........................          948             993
   Deposits, primarily with insurers ..          936             999
   Prepaid expenses ...................          473           2,025
   Deferred income taxes ..............        2,733           2,758
                                            --------        --------
      Total current assets ............       26,920          30,288
                                            --------        --------
Property and equipment:
   Land ...............................        1,302           1,302
   Buildings and improvements .........        7,502           7,627
   Tractors ...........................       67,872          68,130
   Trailers ...........................       36,107          38,199
   Other equipment ....................        4,265           4,678
                                            --------        --------
                                             117,048         119,936
   Less accumulated depreciation ......       67,772          61,402
                                            --------        --------
      Net property and equipment ......       49,276          58,534
                                            --------        --------
Goodwill ..............................        1,745           1,745
Other assets ..........................          335             299
                                            --------        --------
                                            $ 78,276        $ 90,866
                                            ========        ========
</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)

<TABLE>
<CAPTION>
                                             DECEMBER 31,   SEPTEMBER 30,
                                                 2004            2005
                                             ------------   -------------
                                                             (unaudited)
<S>                                          <C>            <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current maturities of long-term debt ..      $ 9,301        $ 8,133
   Accounts payable ......................        6,390          9,140
   Accrued loss reserves .................        5,928          6,009
   Accrued compensation ..................        2,398          3,104
   Other accrued expenses ................          522            538
   Income tax payable ....................           18            753
                                                -------        -------
         Total current liabilities .......       24,557         27,677
Long-term debt, less current maturities ..       20,008         26,398
Deferred income taxes ....................       10,702         10,197
                                                -------        -------
         Total liabilities ...............       55,267         64,272
                                                -------        -------
Stockholders' equity:
   Preferred stock .......................           --             --
   Common stock:
      Class A ............................           40             40
      Class B ............................           10             10
   Additional paid-in capital ............       11,438         11,458
   Retained earnings .....................       11,817         15,304
   Reacquired shares, at cost ............         (296)          (218)
                                                -------        -------
         Total stockholders' equity ......       23,009         26,594
Commitments
                                                -------        -------
                                                $78,276        $90,866
                                                =======        =======
</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>
<CAPTION>
                                                    THREE MONTHS ENDED        NINE MONTHS ENDED
                                                      SEPTEMBER 30,             SEPTEMBER 30,
                                                 -----------------------   -----------------------
                                                    2004         2005         2004         2005
                                                 ----------   ----------   ----------   ----------
<S>                                              <C>          <C>          <C>          <C>
Operating revenue:
   Freight ...................................   $   46,469   $   56,867   $  138,338   $  161,272
   Other .....................................          189          440          599        1,115
                                                 ----------   ----------   ----------   ----------
      Operating revenue ......................       48,658       57,307      138,937      162,387
                                                 ----------   ----------   ----------   ----------
Operating expenses:
   Purchased transportation ..................       16,125       20,423       45,384       55,938
   Compensation and employee benefits ........       13,572       13,866       40,272       42,107
   Fuel, supplies, and maintenance ...........        9,710       13,106       27,352       36,121
   Insurance and claims ......................        1,288        1,309        3,953        4,975
   Taxes and licenses ........................          906          880        2,778        2,785
   General and administrative ................        1,714        1,826        5,148        5,592
   Communications and utilities ..............          282          266          962          862
   Depreciation and amortization .............        3,203        2,334        9,695        6,658
                                                 ----------   ----------   ----------   ----------
         Total operating expenses ............       46,800       54,010      135,544      155,038
                                                 ----------   ----------   ----------   ----------
      Earnings from operations ...............        1,858        3,297        3,393        7,349
Financial (expense) income
   Interest expense ..........................         (378)        (500)      (1,141)      (1,268)
   Interest income ...........................           16           47           26           98
   Other income ..............................           --           --          727           --
                                                 ----------   ----------   ----------   ----------
      Earnings before income taxes ...........        1,496        2,844        3,005        6,179
Income tax expense ...........................          642        1,216        1,151        2,693
                                                 ----------   ----------   ----------   ----------
      Net earnings ...........................   $      854   $    1,628   $    1,854   $    3,486
                                                 ==========   ==========   ==========   ==========

Basic earnings per share .....................   $     0.18   $     0.33   $     0.38   $     0.71
                                                 ==========   ==========   ==========   ==========
Diluted earnings per share ...................   $     0.17   $     0.32   $     0.38   $     0.69
                                                 ==========   ==========   ==========   ==========

Basic weighted average shares outstanding ....    4,848,821    4,936,624    4,847,609    4,925,818
      Effect of dilutive stock options .......      120,068      123,570       92,833      117,960
                                                 ----------   ----------   ----------   ----------
Diluted weighted average shares outstanding ..    4,968,889    5,060,194    4,940,442    5,043,778
                                                 ==========   ==========   ==========   ==========
</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>
<CAPTION>
                                                                       NINE MONTHS ENDED
                                                                         SEPTEMBER 30,
                                                                      -------------------
                                                                        2004       2005
                                                                      --------   --------
<S>                                                                   <C>        <C>
Cash flows from operating activities:
   Net earnings ...................................................   $  1,854   $  3,486
                                                                      --------   --------
   Adjustments to reconcile net earnings to cash provided
      by operating activities:
      Depreciation and amortization ...............................      9,696      6,658
      Deferred income tax expense (benefit) .......................        928       (530)
      Change in:
         Receivables ..............................................     (3,562)    (5,314)
         Inventories ..............................................       (220)       (45)
         Deposits, primarily with insurers ........................          2        (63)
         Prepaid expenses .........................................         23       (481)
         Accounts payable and other accrued liabilities ...........      4,922      4,288
                                                                      --------   --------
            Total adjustments .....................................     11,789      4,513
                                                                      --------   --------
            Net cash provided by operating activities .............     13,643      7,999
                                                                      --------   --------
Cash flows from investing activities:
   Purchase of property and equipment .............................       (586)    (3,881)
   Proceeds from sale of property and equipment ...................      2,757      5,716
   Other ..........................................................         21         36
                                                                      --------   --------
            Net cash provided by investing activities .............      2,192      1,871
                                                                      --------   --------
Cash flows from financing activities:
   Net borrowings on line of credit ...............................       (426)        --
   Principal payments on long-term debt ...........................     (9,837)   (13,600)
   Treasury stock reissued ........................................          5         84
   Other ..........................................................         --         15
   Change in checks issued in excess of cash balances .............       (672)        --
                                                                      --------   --------
            Net cash used in financing activities .................    (10,930)   (13,501)
                                                                      --------   --------
            Net increase (decrease) in cash and cash equivalents ..      4,905     (3,631)
Cash and cash equivalents at beginning of period ..................        355      5,054
                                                                      --------   --------
Cash and cash equivalents at end of period ........................   $  5,260   $  1,423
                                                                      --------   --------
Supplemental disclosure of cash flow information:
   Cash paid during period for:
      Interest ....................................................   $  1,175   $  1,253
      Income taxes ................................................         28      2,489
                                                                      ========   ========
Supplemental schedules of noncash investing
   and financing activities:
   Notes payable issued for tractors and trailers .................   $  9,172   $ 17,751
   Notes payable issued for excess insurance premiums .............         --      1,071
                                                                      ========   ========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                        6

<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 ("we", "us", or "our"). 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 our opinion, the accompanying
     condensed consolidated financial statements include all adjustments that
     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, 2004, Condensed
     Consolidated Balance Sheet was derived from our audited balance sheet 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 our Form
     10-K for the year ended December 31, 2004. Results of operations in interim
     periods are not necessarily indicative of results to be expected for a full
     year.

NOTE 2. 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 and
     directors as potential common shares. The dilutive effect of stock options
     excludes 59,000 and 55,000 shares for the third quarter of 2004 and 2005,
     respectively, as the exercise prices of the underlying options were out of
     the money and the effect was anti-dilutive. Stock options outstanding at
     September 30, 2004, and 2005, totaled 305,650 and 240,350, respectively.

NOTE 3. STOCK OPTION PLANS

     On December 31, 2004, our ability to grant incentive stock options under
     our incentive stock plan expired and on March 1, 2005 our ability to grant
     stock options under our director stock option plan also expired. As a
     result, our Board of Directors determined to cease use of these plans and
     we now have two active stock-based compensation plans:

          (1) We have reserved 400,000 shares of Class A common stock for
          issuance pursuant to an employee incentive stock plan adopted during
          2001. Any shares subject to awards which expire unexercised or are
          forfeited become available again for issuance under this plan. Under
          this plan, no award of incentive stock options may be made after
          August 6, 2011.

          (2) We have reserved 500,000 shares of Class A common stock for
          issuance pursuant to an omnibus stock plan adopted on May 13, 2005.
          Any shares subject to awards which expire unexercised or are forfeited
          become available again for issuance under this plan. This plan expires
          on May 13, 2015.

     We account 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 under these plans had an exercise price equal to the market
     value of the common stock on the date of the grant.


                                        7

<PAGE>

     The following table illustrates the effect on net earnings and earnings per
     share if we had applied the fair value recognition provisions of FASB
     Statement No. 123, "Accounting for Stock-Based Compensation," to
     stock-based employee compensation. For purposes of pro forma disclosures,
     the estimated fair value of options is amortized to expense over the
     options' vesting periods.

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED   NINE MONTHS ENDED
                                                                 SEPTEMBER 30,       SEPTEMBER 30,
                                                              ------------------   -----------------
                                                                 2004    2005        2004     2005
                                                                -----   ------      ------   ------
<S>                                                           <C>       <C>        <C>       <C>
Net earnings, as reported                                       $ 854   $1,628      $1,854   $3,486
Deduct:  Total stock-based employee compensation expense
   determined under fair value based method for all awards,
   net of related tax effects                                      (4)      (7)        (11)     (12)
                                                                -----   ------      ------   ------
Pro forma net earnings                                          $ 850   $1,621      $1,843   $3,474
                                                                =====   ======      ======   ======
Basic earnings per share     - as reported                      $0.18   $ 0.33      $ 0.38   $ 0.71
                             - pro forma                        $0.18   $ 0.33      $ 0.38   $ 0.71
Diluted earnings per share   - as reported                      $0.17   $ 0.32      $ 0.38   $ 0.69
                             - pro forma                        $0.17   $ 0.32      $ 0.37   $ 0.69
</TABLE>

     We use the Black-Scholes option pricing model to determine the fair value
     of stock options issued. The following table summarizes the assumptions
     used in our Black-Scholes calculations.

<TABLE>
<CAPTION>
                                                                                                     Weighted
                                            Weighted           Weighted             Weighted         average
                         Number of     average risk-free   average expected         average          expected
Period                options issued     interest rate           life         expected volatility   dividends
-------------------   --------------   -----------------   ----------------   -------------------   ---------
<S>                   <C>              <C>                 <C>                <C>                   <C>
First quarter 2004          None              N/A                    N/A              N/A              N/A
Second quarter 2004        2,000             3.23%               3 years               69%            None
Third quarter 2004          None              N/A                    N/A              N/A              N/A

First quarter 2005          None              N/A                    N/A              N/A              N/A
Second quarter 2005       22,000             3.69%             3.9 years               69%            None
Third quarter 2005          None              N/A                    N/A              N/A              N/A
</TABLE>

     During the quarter we issued options to purchase 3,500 shares to a
     non-employee consultant. We estimated the value of this option to be $8 and
     recorded the related expense during the third quarter of 2005.

NOTE 4. LONG-TERM DEBT

     During February 2005, we amended our financing arrangement with LaSalle
     Bank to extend the maturity date from January 1, 2006 to January 1, 2010
     and to reduce the interest rate and facilities fee applied under the
     arrangement. We incur debt on a regular basis for the purchase of new
     tractors and trailers.


                                        8

<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," "plans,"
"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. These statements are based upon the current beliefs and expectations of
our management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in forward-looking statements. The
following factors, among others, could cause actual results to differ materially
from those in forward-looking statements: failure to sustain recent
profitability, which could result in violation of bank covenants and
acceleration of indebtedness at several financial institutions; the ability to
obtain financing on acceptable terms, and obtain waivers and amendments to
current financing in the event of default; economic recessions or downturns in
customers' business cycles; excessive increases in capacity within truckload
markets; surplus inventories; decreased demand for transportation services
offered by us; increases or rapid fluctuations in inflation, interest rates,
fuel prices, and fuel hedging; the availability and costs of attracting and
retaining qualified drivers and owner-operators; increases in insurance premiums
and deductible amounts, or changes in excess coverage, relating to accident,
cargo, workers' compensation, health, and other claims; the resale value of used
equipment and prices of new equipment; seasonal factors such as harsh weather
conditions that increase operating costs; regulatory requirements that increase
costs and decrease efficiency, including new emissions standards and
hours-of-service regulations; changes in management; and the ability to
negotiate, consummate, and integrate acquisitions. Readers should review and
consider the various disclosures made by us in our press releases, stockholder
reports, and public filings, as well as the factors explained in greater detail
in our annual report on Form 10-K.

     Our fiscal year ends on December 31 of each year. Thus, this report
discusses the third quarter and first nine months of our 2004 and 2005 fiscal
years.

     We generate substantially all of our revenue by transporting freight for
our customers. Generally, we are paid by the mile for our services. We also
derive revenue from fuel surcharges, loading and unloading activities, equipment
detention, and other accessorial services. The main factors that affect our
revenue are the revenue per mile we receive from our customers, the percentage
of miles for which we are compensated, and the number of miles we generate with
our equipment. These factors relate, among other things, to the United States
economy, inventory levels, the level of capacity in the trucking industry,
specific customer demand, and driver availability. We monitor our revenue
production primarily through average revenue per tractor per week.

     During the third quarter of 2005, our average revenue per tractor per week
increased to $3,572 from $3,227 in the third quarter of 2004. During the third
quarter of 2005, our average revenue per tractor per week (excluding fuel
surcharge, brokerage, and other revenues) increased to $2,884 from $2,842 in the
third quarter of 2004, reflecting a 4.7% increase in our average revenue
(excluding fuel surcharge, brokerage, and other revenues) per loaded mile and a
6.4% increase in our weighted average tractors to 1,234 in the 2005 quarter from
1,160 in the 2004 quarter. We exclude fuel surcharge, brokerage and other more
volatile revenues in calculating our average revenue per tractor per week
(excluding fuel surcharge, brokerage, and other revenues) as we believe the
analysis of tractor productivity is more meaningful if these revenues are
excluded from the computation as this provides useful information to investors
regarding business trends relating to our financial condition and results of
ongoing operations.

     The main factors that impact our profitability on the expense side are the
variable costs of transporting freight for our customers. These costs include
fuel expense, driver-related expenses, such as wages, benefits, training, and
recruitment, and independent contractor costs, which are recorded under
purchased transportation. Expenses that have both fixed and variable components
include maintenance and tire expense and our total cost of insurance and claims.
These expenses generally vary with the miles we travel, but also have a
controllable component based on safety, fleet age, efficiency, and other
factors. Our main fixed costs are the acquisition and financing of long-term
assets, such as revenue equipment and the compensation of non-driver personnel.
Effectively controlling our expenses has been a key component of our profit
improvement plan.

     For the three months ended September 30, 2005, operating revenue increased
17.8% to $57.3 million from $48.7 million during the same quarter in 2004. Net
earnings was $1.6 million, or $0.33 per basic share and $0.32 per


                                        9

<PAGE>

diluted share, compared with net earnings of $854,000, or $0.18 per basic share
and $0.17 per diluted share, during the 2004 quarter.

     For the nine months ended September 30, 2005, operating revenue increased
16.9% to $162.4 million from $138.9 million during the same period in 2004. Net
earnings was $3.5 million, or $0.71 per basic share and $0.69 per diluted share,
compared with net earnings of $1.9 million, or $0.38 per basic and diluted
share, during the first nine months of 2004. However, during the first quarter
of 2004 we recorded $727,000 of income from life insurance. This non-operating
income is tax exempt and added $0.15 to our earnings per share for the first
nine months of 2004. This was a one time event that did not recur in 2005.
Without these life insurance proceeds, our net earnings would have been $1.1
million, or $0.23 per basic and diluted share, during the first nine months of
2004, compared with net earnings of $3.5 million, or $0.71 per basic share and
$0.69 per diluted share, during the first nine months of 2005. Our net earnings
and earnings per share as adjusted to exclude the life insurance proceeds are
not in accordance with, or an alternative for, generally accepted accounting
principles. We believe that the presentation of net earnings and the related per
share amount excluding the one-time effect of these life insurance proceeds
provides useful information to investors regarding business trends relating to
our financial condition and results of ongoing operations.

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, 2004 and 2005:

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED   NINE MONTHS ENDED
                                              SEPTEMBER 30,       SEPTEMBER 30,
                                           ------------------   -----------------
                                              2004    2005         2004    2005
                                             -----   -----        -----   -----
<S>                                        <C>       <C>        <C>       <C>
Operating revenue ......................     100.0%  100.0%       100.0%  100.0%
Operating expenses:
   Purchased transportation ............      33.1    35.6         32.7    34.4
   Compensation and employee benefits ..      27.9    24.2         29.0    25.9
   Fuel, supplies, and maintenance .....      20.0    22.9         19.7    22.2
   Insurance and claims ................       2.6     2.3          2.8     3.1
   Taxes and licenses ..................       1.9     1.5          2.0     1.7
   General and administrative ..........       3.5     3.2          3.7     3.4
   Communication and utilities .........       0.6     0.5          0.7     0.5
   Depreciation and amortization .......       6.6     4.1          7.0     4.1
                                             -----   -----        -----   -----
   Total operating expenses ............      96.2    94.2         97.6    95.5
                                             -----   -----        -----   -----
Earnings from operations ...............       3.8     5.8          2.4     4.5
Interest expense, net ..................      (0.8)   (0.8)        (0.8)   (0.7)
Life insurance proceeds ................        --      --          0.5      --
                                             -----   -----        -----   -----
Earnings before income taxes ...........       3.1     5.0          2.2     3.8
Income tax expense .....................       1.3     2.1          0.8     1.7
                                             -----   -----        -----   -----
Net earnings ...........................       1.8%    2.8%         1.3%    2.1%
                                             =====   =====        =====   =====
</TABLE>

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2005, WITH THREE MONTHS ENDED
SEPTEMBER 30, 2004.

     Operating revenue increased $8.7 million (17.8%) to $57.3 million in the
2005 quarter from $48.7 million in the 2004 quarter. The increase in operating
revenue resulted from increased average operating revenue per tractor per week
and a 6.4% increase in our weighted average tractors.

     Average operating revenue per tractor per week, one measure of asset
productivity, increased significantly to $3,572 in the 2005 quarter from $3,227
in the 2004 quarter. Operating revenue includes revenue from operating our
trucks as well as other, more volatile revenue items, including fuel surcharge,
brokerage, and other revenue. We believe the analysis of tractor productivity is
more meaningful if fuel surcharge, brokerage, and other revenue are excluded
from the computation as this provides useful information to investors regarding
business trends relating to our financial condition and results of ongoing
operations. Average revenue per tractor per week (excluding fuel surcharge,
brokerage, and other revenue) increased to $2,884 in the 2005 quarter from
$2,842 in the 2004 quarter, primarily due to improvements in our freight rates.
Revenue per loaded mile (excluding fuel surcharge, brokerage, and other revenue)
increased $0.07 to $1.55 in the 2005 quarter from $1.48 in the 2004 quarter,
reflecting improved lane and customer selection, increased trucking demand, and
improved general economic conditions. Fuel surcharge revenue increased $4.6


                                       10

<PAGE>

million to $8.2 million in the 2005 quarter from $3.6 million in the 2004
quarter. During the third quarter of 2005 and 2004, approximately $4.7 million
and $2.2 million, respectively, of the fuel surcharge revenue collected helped
to offset our fuel costs. The remainder was passed through to independent
contractors.

     Our weighted average tractors increased to 1,234 in the 2005 quarter from
1,160 in the 2004 quarter.

     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 increased $4.3 million (26.7%) to $20.4 million in the 2005
quarter from $16.1 million in the 2004 quarter. As a percentage of revenue,
purchased transportation increased to 35.6% in the 2005 quarter from 33.1% in
the 2004 quarter. The changes reflect higher pay to independent contractors
resulting from increases in fuel surcharge revenue and average revenue per
billed mile and higher payments under operating leases of revenue equipment. The
percentage of total operating revenue provided by independent contractors
increased slightly to 37.3% in the 2005 quarter from 36.0% in the 2004 quarter.
During the last half of 2004 we leased 117 new tractors under operating leases.
Payments under operating leases, a component of purchased transportation,
increased $421,000, to $493,000 in the 2005 quarter from $72,000 in the 2004
quarter. If the leased tractors would have been purchased, instead of leased, a
similar amount of depreciation and interest expense would have been incurred in
lieu of purchased transportation expense.

     Compensation and employee benefits increased $294,000 (2.2%) to $13.9
million in the 2005 quarter from $13.6 million in the 2004 quarter reflecting
increases in the number of company drivers and in their rate of pay, and
increases in non-driver employee wages, partially offset by decreased health
insurance costs and worker's compensation expense. As a percentage of revenue,
compensation and employee benefits decreased to 24.2% in the 2005 quarter from
27.9% in the 2004 quarter, reflecting the changes described above and an
increase in our revenue per loaded mile and fuel surcharge revenue, which
increases revenue without a proportionate increase in wages. Our ratio of
tractors to non-driver employees, a key measure of administrative efficiency,
has improved to 4.98 during the 2005 quarter compared to 4.56 in the 2004
quarter. The market for recruiting drivers continues to be challenging. We have
increased driver pay three times since the third quarter of 2004 and expect that
further increases will be necessary. Future increases in driver pay would
negatively impact our results of operations to the extent that corresponding
freight rate increases are not obtained.

     Fuel, supplies, and maintenance increased $3.4 million (35.0%) to $13.1
million in the 2005 quarter from $9.7 million in the 2004 quarter. As a
percentage of revenue, fuel, supplies, and maintenance increased to 22.9% of
revenue in the 2005 quarter compared with 20.0% in the 2004 quarter. This
reflects higher fuel prices, partially offset by an increase in our average
revenue per loaded mile, which increases revenue without a corresponding
increase in maintenance costs. As expected, maintenance costs have stabilized as
we continue to update our fleet with new equipment. Fuel prices increased
approximately 39% to an average of $2.46 per gallon in the 2005 quarter from
$1.77 per gallon in the 2004 quarter. The $0.69 per gallon increase in fuel
prices was partially offset by a $0.56 per gallon ($2.5 million) increase in
fuel surcharge revenue attributable to company-owned tractors that is included
in operating revenue, mitigating 80% of the increase in fuel prices.

     Insurance and claims increased $21,000 (1.6%) to $1.3 million in the 2005
quarter from $1.3 million in the 2004 quarter. As a percentage of revenue,
insurance and claims decreased to 2.3% of revenue in the 2005 quarter compared
with 2.6% in the 2004 quarter. This reflects a reduction in the cost of auto
liability, physical damage, and cargo claims and an increase in our average
revenue per loaded mile, which increases revenue without a corresponding
increase in insurance and claims costs, partially offset by premiums paid for
our reinstated excess insurance coverage. On February 1, 2005, we reinstated
excess insurance coverage that we had discontinued in July 2003. The additional
insurance, which increases our per claim coverage from $2.0 million to $5.0
million, added $268,000 to our insurance and claims expense during the third
quarter of 2005. Claims that exceed the limits of our insurance coverage, or
claims for which coverage is not provided, may cause our financial condition and
results of operations to suffer a materially adverse effect. The insurance
policies were renewed on July 1, 2005 with no change in our retention levels.

     Taxes and licenses decreased $26,000 (2.9%) to $880,000 in the 2005 quarter
from $906,000 in the 2004 quarter. Increases related to the increase in the
number of company-owned tractors subject to annual license and permit costs were
more than offset by reduced over-dimensional permit costs and lower real estate
taxes resulting from a successful appeal of the assessed value on one of our
locations. As a percentage of revenue, taxes and licenses decreased to 1.5% of
revenue in the 2005 quarter compared with 1.9% of revenue in the 2004 quarter,
reflecting the items noted above and an increase in our average revenue per
loaded mile and fuel surcharge revenue, which increases revenue without a
proportionate increase in taxes and licenses.


                                       11

<PAGE>

     General and administrative expenses increased $112,000 (6.5%) to $1.8
million in the 2005 quarter from $1.7 million in the 2004 quarter, reflecting
increased driver recruiting and orientation expenses and professional fees
related to Sarbanes-Oxley compliance efforts. As a percentage of revenue,
general and administrative expenses decreased to 3.2% of revenue in the 2005
quarter compared to 3.5% in the 2004 quarter, reflecting an increase in our
average revenue per loaded mile and fuel surcharge revenue, which increases
revenue without a proportionate increase in general and administrative expenses.

     Communications and utilities decreased $16,000 (5.7%) to $266,000 in the
2005 quarter from $282,000 in the 2004 quarter. As a percentage of revenue,
communications and utilities decreased to 0.5% of revenue in the 2005 quarter
from 0.6% of revenue in the 2004 quarter, reflecting an increase in our average
revenue per loaded mile and fuel surcharge revenue which increases revenue,
without a proportionate increase in communications and utilities expenses.

     Depreciation and amortization decreased $869,000 (27.1%) to $2.3 million in
the 2005 quarter from $3.2 million in the 2004 quarter. In accordance with
industry practices, the gain or loss on retirement, sale, or write-down of
equipment is included in depreciation and amortization. In the 2005 and 2004
quarter, depreciation and amortization included net gains from the sale of
equipment of $476,000 and $5,000, respectively. 71.3% of the gains realized
during the 2005 quarter were generated from the sale of 67 trailers. No assets
were traded during the quarter. Additionally, during the last half of 2004 we
leased 117 new tractors under operating leases. Payments under operating leases
are a component of purchased transportation. If the leased tractors would have
been purchased, instead of leased, approximately $377,000 of depreciation
expense would have been incurred in lieu of purchased transportation expense.
Finally, some of our older equipment still generates revenue but is no longer
being depreciated. As a percentage of revenue, depreciation and amortization
decreased to 4.1% of revenue in the 2005 quarter compared with 6.6% in the 2004
quarter, reflecting the changes described above and an increase in our average
revenue per loaded mile and fuel surcharge revenue which increases revenue
without a proportionate increase in depreciation expense. In the short-term, we
expect that the presence of older equipment that is not being depreciated and
gains on the disposition of assets will more than offset increases in
depreciation resulting from the addition of new equipment to our fleet. Over the
long-term, as we continue to upgrade our equipment fleet, we expect depreciation
expense to increase.

     Interest expense, net, increased $91,000 (25.1%) to $453,000 in the 2005
quarter from $362,000 in the 2004 quarter. This increase was attributable to
higher average debt outstanding and higher interest rates. As a percentage of
revenue, interest expense, net, remained constant at 0.8% of revenue in both
quarters.

     As a result of the foregoing, our pre-tax margin increased to 5.0% in the
2005 quarter from 3.1% in the 2004 quarter.

     Our income tax expense in the 2005 quarter was $1.2 million, or 42.8% of
earnings before income taxes. Our income tax expense in the 2004 quarter was
$642,000, or 42.9% of earnings before income taxes. In both years, the effective
tax rate is different from the expected combined tax rate for a company
headquartered in Iowa because a portion of the cost of driver per diem expense
is not deductible. The impact of paying per diem travel expenses varies
depending upon the ratio of drivers to independent contractors and the level of
our pre-tax earnings.

     As a result of the factors described above, net earnings were $1.6 million
in the 2005 quarter (2.8% of revenue), compared with $854,000 in the 2004
quarter (1.8% of revenue).

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2005, WITH NINE MONTHS ENDED
SEPTEMBER 30, 2004.

     Operating revenue increased $23.5 million (16.9%) to $162.4 million in the
first nine months of 2005 (the 2005 period) from $138.9 million in the first
nine months of 2004 (the 2004 period). The increase in operating revenue
resulted from increased average operating revenue per tractor per week and a
5.1% increase in our weighted average tractors.

     Average operating revenue per tractor per week, one measure of asset
productivity, increased significantly to $3,374 in the 2005 period from $3,034
in the 2004 period. Operating revenue includes revenue from operating our trucks
as well as other, more volatile revenue items, including fuel surcharge,
brokerage, and other revenue. We believe the analysis of tractor productivity is
more meaningful if fuel surcharge, brokerage, and other revenue are excluded
from the computation as this provides useful information to investors regarding
business trends relating to our financial condition and results of ongoing
operations. Average revenue per tractor per week (excluding fuel surcharge,
brokerage, and other


                                       12

<PAGE>

revenue) increased to $2,806 in the 2005 period from $2,725 in the 2004 period,
primarily due to improvements in our freight rates. Revenue per loaded mile
(excluding fuel surcharge, brokerage, and other revenue) increased $0.09 to
$1.54 in the 2005 period from $1.45 in the 2004 period, reflecting improved lane
and customer selection, increased trucking demand, and improved general economic
conditions. Fuel surcharge revenue increased $11.6 million to $19.7 million in
the 2005 period from $8.1 million in the 2004 period. During the first nine
months of 2005 and 2004, approximately $11.5 million and $5.1 million,
respectively, of the fuel surcharge revenue collected helped to offset our fuel
costs. The remainder was passed through to independent contractors.

     Our weighted average tractors increased to 1,234 in the 2005 period from
1,174 in the 2004 period.

     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 increased $10.6 million (23.3%) to $55.9 million in the 2005
period from $45.4 million in the 2004 period. As a percentage of revenue,
purchased transportation increased to 34.4% in the 2005 period from 32.7% in the
2004 period. The changes reflect higher pay to independent contractors resulting
from increases in fuel surcharge revenue and average revenue per billed mile and
higher payments under operating leases of revenue equipment. The percentage of
total operating revenue provided by independent contractors increased slightly
to 36.4% in the 2005 period from 35.9% in the 2004 period. During the last half
of 2004 we leased 117 new tractors under operating leases. Payments under
operating leases, a component of purchased transportation, increased $1.3
million, to $1.5 million in the 2005 period from $225,000 in the 2004 period. If
the leased tractors would have been purchased, instead of leased, a similar
amount of depreciation and interest expense would have been incurred in lieu of
purchased transportation expense.

     Compensation and employee benefits increased $1.8 million (4.6%) to $42.1
million in the 2005 period from $40.3 million in the 2004 period reflecting
increases in the number of company drivers and in their rate of pay, and
increases in non-driver employee wages, partially offset by decreased health
insurance costs and worker's compensation expense. As a percentage of revenue,
compensation and employee benefits decreased to 25.9% in the 2005 period from
29.0% in the 2004 period, reflecting the changes described above and an increase
in our revenue per loaded mile and fuel surcharge revenue, which increases
revenue without a proportionate increase in wages. Our ratio of tractors to
non-driver employees, a key measure of administrative efficiency, has improved
to 4.95 during the 2005 period compared to 4.49 in the 2004 period. The market
for recruiting drivers continues to be challenging. We have increased driver pay
three times since the third quarter of 2004 and expect that further increases
will be necessary. Future increases in driver pay would negatively impact our
results of operations to the extent that corresponding freight rate increases
are not obtained.

     Fuel, supplies, and maintenance increased $8.8 million (32.1%) to $36.1
million in the 2005 period from $27.4 million in the 2004 period. As a
percentage of revenue, fuel, supplies, and maintenance increased to 22.2% of
revenue in the 2005 period compared with 19.7% in the 2004 period. This reflects
higher fuel prices, partially offset by an increase in our average revenue per
loaded mile, which increases revenue without a corresponding increase in
maintenance costs. As expected, maintenance costs have stabilized as we continue
to update our fleet with new equipment. Fuel prices increased approximately 34%
to an average of $2.19 per gallon in the 2005 period from $1.63 per gallon in
the 2004 period. The $0.56 per gallon increase in fuel prices was partially
offset by a $0.45 per gallon ($6.3 million) increase in fuel surcharge revenue
attributable to company-owned tractors that is included in operating revenue,
mitigating 82% of the increase in fuel prices.

     Insurance and claims increased $1.0 million (25.9%) to $5.0 million in the
2005 period from $4.0 million in the 2004 period. As a percentage of revenue,
insurance and claims increased to 3.1% of revenue in the 2005 period compared
with 2.8% in the 2004 period. On February 1, 2005 we reinstated excess insurance
coverage that we had discontinued in July 2003. The additional insurance, which
increases our per claim coverage from $2.0 million to $5.0 million, added
$801,000 to our insurance and claims expense during the first nine months of
2005. Claims that exceed the limits of our insurance coverage, or claims for
which coverage is not provided, may cause our financial condition and results of
operations to suffer a materially adverse effect. The insurance policies were
renewed on July 1, 2005 with no change in our retention levels.

     Taxes and licenses increased $7,000 (0.3%) to $2.8 million in the 2005
period from $2.8 million in the 2004 period. Increases related to the increase
in the number of company-owned tractors subject to annual license and permit
costs were more than offset by reduced over-dimensional permit costs and lower
real estate taxes resulting from a successful appeal of the assessed value on
one of our locations. As a percentage of revenue, taxes and licenses decreased
to 1.7% of revenue in the 2005 period compared with 2.0% of revenue in the 2004
period, reflecting an increase in our


                                       13

<PAGE>

average revenue per loaded mile and fuel surcharge revenue, which increases
revenue without a proportionate increase in taxes and licenses.

     General and administrative expenses increased $444,000 (8.6%) to $5.6
million in the 2005 period from $5.1 million in the 2004 period, primarily due
to increased professional fees related to Sarbanes-Oxley compliance efforts and
driver recruiting and orientation expenses. As a percentage of revenue, general
and administrative expenses decreased to 3.4% of revenue in the 2005 period
compared to 3.7% in the 2004 period, reflecting an increase in our average
revenue per loaded mile and fuel surcharge revenue, which increases revenue
without a proportionate increase in general and administrative expenses.

     Communications and utilities decreased $100,000 (10.4%) to $862,000 in the
2005 period from $962,000 in the 2004 period. As a percentage of revenue,
communications and utilities decreased to 0.5% of revenue in the 2005 period
from 0.7% of revenue in the 2004 period, reflecting an increase in our average
revenue per loaded mile and fuel surcharge revenue which increases revenue,
without a proportionate increase in communications and utilities expenses.

     Depreciation and amortization decreased $3.0 million (31.3%) to $6.7
million in the 2005 period from $9.7 million in the 2004 period. In accordance
with industry practices, the gain or loss on retirement, sale, or write-down of
equipment is included in depreciation and amortization. In the 2005 and 2004
period, depreciation and amortization included net gains from the sale of
equipment of $1.5 million and $153,000, respectively. 92.3% of the gains
realized during the 2005 period were generated from the sale of 300 trailers. No
assets were traded during the period. Additionally, during the last half of 2004
we leased 117 new tractors under operating leases. Payments under operating
leases are a component of purchased transportation. If the leased tractors would
have been purchased, instead of leased, approximately $1.1 million of
depreciation expense would have been incurred in lieu of purchased
transportation expense. Finally, some of our older equipment still generates
revenue but is no longer being depreciated. As a percentage of revenue,
depreciation and amortization decreased to 4.1% of revenue in the 2005 period
compared with 7.0% in the 2004 period, reflecting the changes described above
and an increase in our average revenue per loaded mile and fuel surcharge
revenue which increases revenue without a proportionate increase in depreciation
expense. In the short-term, we expect that the presence of older equipment that
is not being depreciated will more than offset increases in depreciation
resulting from the addition of new equipment to our fleet. Over the long-term,
as we continue to upgrade our equipment fleet, we expect depreciation expense to
increase.

     Interest expense, net, increased $55,000 (4.9%) to $1.2 million in the 2005
period from $1.1 million in the 2004 period. This increase was attributable to
higher interest rates partially offset by lower average debt outstanding. As a
percentage of revenue, interest expense, net, decreased to 0.7% of revenue in
the 2005 period compared with 0.8% in the 2004 period.

     During the first nine months of 2004 we recorded $727,000 of income from
life insurance proceeds. This non-operating income was tax exempt and added
$0.15 to our earnings per share for the first nine months of 2004. This one time
event did not recur in 2005 and will not recur in the future.

     As a result of the foregoing, our pre-tax margin increased to 3.8% in the
2005 period from 2.2% in the 2004 period.

     Our income tax expense in the 2005 period was $2.7 million, or 43.6% of
earnings before income taxes. Our income tax expense in the 2004 period was $1.2
million, or 50.5% of earnings before life insurance proceeds and income taxes.
In both years, the effective tax rate is different from the expected combined
tax rate for a company headquartered in Iowa because a portion of the cost of
driver per diem expense is not deductible. The impact of paying per diem travel
expenses varies depending upon the ratio of drivers to independent contractors
and the level of our pre-tax earnings.

     As a result of the factors described above, net earnings were $3.5 million
in the 2005 period (2.1% of revenue), compared with $1.9 million in the 2004
period (1.3% of revenue). Without the life insurance proceeds, our net earnings
would have been $1.1 million (0.8% of revenue) in the 2004 period.


                                       14

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     USES AND SOURCES OF CASH

     We require cash to fund working capital requirements and to service our
debt. We have 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. We also have obtained
a portion of our 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.

     Our primary sources of liquidity have been funds provided by operations and
borrowings under credit arrangements with commercial lending institutions and
equipment manufacturers. At September 30, 2005, we had $1.4 million in cash and
adequate borrowing availability on our line of credit to finance any near-term
needs for working capital. During the first nine months of 2005 we purchased 157
new tractors and 335 new trailers for $20.7 million, requiring $17.8 million of
new long term debt. We plan to purchase 59 new tractors throughout the remainder
of 2005, allowing for the replacement of older, high mileage tractors.

     At September 30, 2005, we had positive working capital of $2.6 million
compared to positive working capital of $1.2 million at September 30, 2004.
Working capital, defined as current assets minus current liabilities, is not
always fully representative of our liquidity position because cash and trade
receivables account for a large portion of our current assets. Our trade
accounts receivable are generally collected within 32 days. Alternatively,
current maturities of long term debt, a large portion of our current
liabilities, are paid over one year. For this reason, our working capital
position does not always accurately represent the actual strength of our
liquidity.

     Our ability to fund cash requirements in future periods will depend on our
ability to comply with covenants contained in financing arrangements and the
availability of other financing options, as well as our financial condition and
results of operations. Our financial condition and results of operations will
depend on insurance and claims experience, general shipping demand by our
customers, fuel prices, the availability of drivers and independent contractors,
continued success in implementing our profit improvement plan, and other
factors.

     Although there can be no assurance, we believe that cash generated by
operations and available sources of financing for acquisitions of revenue
equipment will be adequate to meet our currently anticipated working capital
requirements and other cash needs through September 2006. We will require
additional sources of financing over the long-term to upgrade our tractor and
trailer fleets. To the extent that actual results or events differ from our
financial projections or business plans, our liquidity may be adversely affected
and we may be unable to meet our financial covenants. Specifically, our short-
and long-term liquidity may be adversely affected by one or more of the
following factors: costs associated with insurance and claims; weak freight
demand or a loss in customer relationships or volume; the impact of new
hours-of-service regulations on asset productivity; the impact of stricter
emissions standards; the ability to attract and retain sufficient numbers of
qualified drivers and independent contractors; elevated fuel prices and the
ability to collect fuel surcharges; inability to maintain compliance with, or
negotiate amendments to, loan covenants; the ability to finance the tractors and
trailers delivered and scheduled for delivery; and the possibility of shortened
payment terms by our suppliers and vendors worried about our ability to meet
payment obligations. Based upon our improving profitability, anticipated future
cash flows, current availability under the financing arrangement with LaSalle
Bank, and sources of equipment financing that are available, we do not expect to
experience significant liquidity constraints in the foreseeable future. To the
extent that actual results or events differ from our financial projections or
business plans, our liquidity may be adversely affected and we may be unable to
meet our financial covenants. In such event, we believe we could renegotiate the
terms of our debt or that alternative financing would be available, although
this cannot be assured.

     Net cash provided by operating activities was $8.0 million for the nine
months ended September 30, 2005, compared to $13.6 million for the nine months
ended September 30, 2004. In spite of improved operating results, cash provided
from operating activities decreased $5.6 million due to increased income tax
payments in 2005, increased accounts receivable related to higher fuel surcharge
revenue, increased operating lease payments on revenue equipment, increased gain
on sale of fixed assets which decreased depreciation and amortization expense,
and non-recurring life insurance proceeds received in 2004, Historically, our
principal use of cash from operations is to service debt and to internally
finance acquisitions of revenue equipment. Total receivables increased $5.3
million for the nine months ended September 30, 2005. The average age of our
trade accounts receivable was approximately 33.1 days in the 2004 period


                                       15

<PAGE>

and 31.8 days in the 2005 period.

     Net cash provided by investing activities was $1.9 million for the nine
months ended September 30, 2005. This related primarily to proceeds from the
sale of revenue equipment. During the third quarter of 2005, we used excess cash
to purchase $2.9 million of new revenue equipment.

     Net cash used in financing activities was $13.5 million for the nine months
ended September 30, 2005, consisting primarily of net payments of principal
under our long-term debt agreements. During the first nine months of 2005 we
used excess cash to prepay $4.9 million of long term debt without penalty.

     We have a financing arrangement with LaSalle Bank, which expires on January
1, 2010, and provides for automatic month-to-month renewals under certain
conditions after that date. LaSalle may terminate the arrangement prior to
January 1, 2010, in the event of default, as discussed below, and may terminate
at the end of any renewal term.

     Since the beginning of 2005, the financing arrangement has been amended to
reduce the rate of interest and facilities fee charged pursuant to the agreement
and to extend the term of the agreement. 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 $20 million or a specified borrowing base.

     At September 30, 2005, there was no balance owed under the term loan.
During the second quarter of 2005, we used excess cash of $4.3 million to prepay
the term loan without penalty. The revolving line of credit allows for borrowing
up to 85 percent of eligible receivables. At September 30, 2005, there were no
borrowings outstanding under the revolving line. The capital expenditure loan
allows for borrowing up to 80 percent of the purchase price of revenue equipment
purchased with these 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, 2005, there was no balance owed under capital
expenditure loans. During the third quarter of 2005 we used excess cash of
$606,000 of cash to prepay the capital expenditure loans without penalty. At
September 30, 2005, we had outstanding letters of credit totaling $7.7 million
for self-insured amounts under our 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 our liquidity. At September 30, 2005, our borrowing
limit under the financing arrangement was $15.4 million, leaving approximately
$7.7 million in remaining availability at such date.

     We are required to pay a facility fee on the LaSalle financing arrangement
of .20% of the maximum loan limit of $20 million. Borrowings under the
arrangement are secured by liens on revenue equipment, accounts receivable, and
certain other assets. The interest rate on outstanding borrowings under the
arrangement is equal to a spread on LaSalle's prime rate or LIBOR, at our
option. The spread is determined by our ratio of funded debt to EBITDA, as
defined under the agreement.

     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. We were in
compliance with these covenants at September 30, 2005. We believe we will
maintain compliance with all covenants for the foreseeable future, although
there can be no assurance that the required financial performance will be
achieved. In addition, equipment financing provided by a manufacturer contains a
minimum tangible net worth requirement. We were in compliance with the required
minimum tangible net worth requirement for September 30, 2005 and we expect to
remain in compliance for the foreseeable future. If we fail 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 this event, we believe we could renegotiate
the terms of our debt or that alternative financing would be available, although
this cannot be assured. As of the filing date, we were in compliance with all
financial covenants.


                                       16

<PAGE>

     CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

     The following tables set forth our contractual obligations and other
commercial commitments as of June 30, 2005:

                      PAYMENTS (IN THOUSANDS) DUE BY PERIOD

<TABLE>
<CAPTION>
                                        Less than                            After
Contractual Obligations        Total     One year   1-3 years   3-5 years   5 years
-----------------------       -------   ---------   ---------   ---------   -------
<S>                           <C>       <C>         <C>         <C>         <C>
Long-term debt                $34,531    $ 8,133     $15,791     $10,607      $--
Operating lease obligations     6,152      1,971       3,865         297       19
Purchase obligations            4,908      4,908          --          --       --
                              -------    -------     -------     -------      ---
Total                         $45,591    $15,012     $19,656     $10,904      $19
                              =======    =======     =======     =======      ===
</TABLE>

     In our normal course of business we place orders with equipment
manufacturers for future delivery of new tractors and trailers. The orders for
trailers can be cancelled at any time without penalty prior to taking delivery.
The orders for tractors can be cancelled without penalty at any time up to 60
days prior to production of the tractor. If the termination occurs less than 60
days, but more than 45 days prior to production, we retain the right to cancel
subject to a per truck penalty of $500. Orders generally cannot be cancelled
within 45 days prior to production. At September 30, 2005, we had commercial
commitments of approximately $4.9 million, related to tractor orders that cannot
be cancelled, financing for which has been prearranged.

     Approximately 30% of our long-term debt carries a variable interest rate
making reliable estimates of future interest payments difficult. Using our
weighted average interest rate of 5.8% as of September 30, 2005, the following
approximately represents our expected obligations for future interest payments:

                      PAYMENTS (IN THOUSANDS) DUE BY PERIOD

<TABLE>
<CAPTION>
                                   Less than                            After
                           Total    One year   1-3 years   3-5 years   5 years
                          ------   ---------   ---------   ---------   -------
<S>                       <C>      <C>         <C>         <C>         <C>
Total interest payments   $4,453     $1,780     $ 2,153       $520       $--
                          ======     ======     =======       ====       ===
</TABLE>

     We had no other commercial commitments at September 30, 2005.

OFF-BALANCE SHEET ARRANGEMENTS

     Our liquidity is not materially affected by off-balance sheet transactions.
During the last six months of 2004 we leased 117 new tractors under operating
leases. These new leases increase equipment rent expense, a component of
purchased transportation expense, rather than depreciation and interest expense.
These obligations are included in our schedule of contractual obligations, and
exclude potential Terminal Remainder Adjustment Clause (TRAC) payments or
refunds on 117 tractors amounting to 40% of the original purchase price due at
the end of the original 48 month term of the lease. After 48 months, we expect
the residual value of the tractors to be greater than 40% of the original cost,
allowing us to return the tractors without penalty.

CRITICAL ACCOUNTING POLICIES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to
make decisions based upon estimates, assumptions, and factors we consider 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
our 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 our Form 10-K for
the year ended December 31, 2004. Other footnotes in the Form 10-K describe


                                       17

<PAGE>

various elements of the financial statements included in this Form 10-Q and the
assumptions on which specific amounts were determined.

     Our critical accounting policies include the following:

     REVENUE RECOGNITION

     We generally recognize operating revenue when the freight to be transported
has been loaded. We operate primarily in the short-to-medium length haul
category of the trucking industry; therefore, our 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. We recognize 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. Prior to July 1, 2005, gains on trade-ins
were deferred and included in the basis of the new asset. Effective July 1,
2005, we adopted Statement of Financial Accounting Standards No. 153, "Exchange
of Nonmonetary Assets," which amends Accounting Principles Board Opinion No. 29
to require recognition of gains and losses on the exchange of nonmonetary assets
and eliminate the exception for nonmonetary exchanges of similar productive
assets. It is replaced with a general exception for nonmonetary assets that do
not have commercial substance. FAS 153 defines an exchange of nonmonetary assets
as having commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. Adoption of FAS
153 had no financial impact on our company since July 1, 2005 Judgments
concerning salvage values and useful lives can have a significant impact

     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 self-retention levels. Losses resulting from uninsured claims are
recognized when such losses are incurred. We estimate and accrue a liability for
our share of ultimate settlements using all available information. We accrue for
claims reported, as well as for claims incurred but not reported, based upon our
past experience. Expenses depend on actual loss experience and changes in
estimates of settlement amounts for open claims that have not been fully
resolved. However, final settlement of these claims could differ materially from
the amounts we have accrued at year-end. Our 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 and lack of excess coverage.

     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. Our 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.


                                       18

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to a variety of market risks, most importantly the effects
of the price and availability of diesel fuel and changes in interest rates.

Commodity Price Risk

     Our operations are heavily dependent upon the use of diesel fuel. The price
and availability of diesel fuel can vary and are subject to political, economic,
and market factors that are beyond our control. Significant increases in diesel
fuel prices could materially and adversely affect our results of operations and
financial condition.

     We presently use fuel surcharges to address the risk of increasing fuel
prices. We believe these fuel surcharges are an effective means of mitigating
the risk of increasing fuel prices, although the competitive nature of our
industry prevents us from recovering the full amount of fuel price increases
through the use of such surcharges.

     In the past, we have used derivative instruments, including heating oil
price swap agreements, to reduce a portion of our exposure to fuel price
fluctuations. Since 2000 we have had no such agreements in place. We do not
trade in such derivatives with the objective of earning financial gains on price
fluctuations.

Interest Rate Risk

     We also are exposed to market risks from changes in certain interest rates
on our debt. Our financing arrangement with LaSalle Bank carries a variable
interest rate equal to a spread on LaSalle's prime rate or LIBOR, at our option.
The spread is determined by our ratio of funded debt to EBITDA, as defined under
the agreement. In addition, approximately $10.2 million of our other debt
carries variable interest rates. This variable interest exposes us to the risk
that interest rates may rise. Assuming borrowing levels at September 30, 2005, a
one-point increase in the prime rate would increase interest expense by
approximately $102,000. The remainder of our other debt carries fixed interest
rates. At September 30, 2005, approximately 30% of our debt carried a variable
interest rate and the remainder was fixed.


                                       19

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

     As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
"Exchange Act"), we have carried out an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report.
This evaluation was carried out under the supervision and with the participation
of our management, including our Chief Executive Officer and our Chief Financial
Officer. Based upon that evaluation, our Chief Executive Officer and our Chief
Financial Officer concluded that our disclosure controls and procedures were
effective as of September 30, 2005. During our third fiscal quarter, there were
no changes in our internal control over financial reporting that have materially
affected, or that are reasonably likely to materially affect, our internal
control over financial reporting. We intend to periodically evaluate our
disclosure controls and procedures as required by the Exchange Act rules.

     Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in our 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 our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding
disclosures.

     We have confidence in our internal controls and procedures. Nevertheless,
our management, including our Chief Executive Officer and our Chief Financial
Officer, does not expect that our disclosure controls and procedures 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 the 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 our
company have been detected.

                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5. OTHER INFORMATION

     None.


                                       20

<PAGE>

ITEM 6. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
 NUMBER                                 DESCRIPTION
-------                                 -----------
<S>       <C>
3.1       Articles of Incorporation (1)

3.2       Amended and Restated Bylaws (2)

10.1      Form of Incentive Stock Option Agreement under Smithway Motor Xpress
          Corp. 2005 Omnibus Stock Plan (3)

10.2      Form of Non-Statutory Stock Option Agreement (Employee) under Smithway
          Motor Xpress Corp. 2005 Omnibus Stock Plan (4)

10.3      Form of Non-Statutory Stock Option Agreement (Director) under Smithway
          Motor Xpress Corp. 2005 Omnibus Stock Plan (5)

31.1      Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer *

31.2      Rule 13a-14(a)/15d-14(a) Certification of 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 G. Larry Owens,
          the Registrant's principal 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 Douglas C.
          Sandvig, the Registrant's principal financial officer *
</TABLE>

----------
(1)  Incorporated by reference to the same numbered exhibit to our Registration
     Statement on Form S-1, Registration No. 33-90356, effective June 27, 1996.

(2)  Incorporated by reference to the same numbered exhibit to our Annual Report
     on Form 10-K for the year ended December 31, 2003.

(3)  Incorporated by reference to exhibit 10.2 to our Registration Statement on
     Form S-8, Registration No. 333-126026, effective June 22, 2005.

(4)  Incorporated by reference to exhibit 10.3 to our Registration Statement on
     Form S-8, Registration No. 333-126026, effective June 22, 2005.

(5)  Incorporated by reference to exhibit 10. 4 to our Registration Statement on
     Form S-8, Registration No. 333-126026, effective June 22, 2005.

*    Filed herewith.


                                       21

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 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 14, 2005                 By: /s/ Douglas C. Sandvig
                                            ------------------------------------
                                            Douglas C. Sandvig
                                            Senior Vice President, Treasurer,
                                            and Chief Financial Officer, in his
                                            capacity as such and on behalf of
                                            the issuer


                                       22

<PAGE>

                                  Exhibit Index

<TABLE>
<CAPTION>
EXHIBIT                                                             METHOD OF
 NUMBER                        DESCRIPTION                            FILING
-------                        -----------                          ---------
<S>       <C>                                                    <C>
3.1       Articles of Incorporation                              Incorporated by
                                                                 reference

3.2       Amended and Restated Bylaws (as in effect on March     Incorporated by
          5, 2004)                                               reference


10.1      Form of Incentive Stock Option Agreement under         Incorporated by
          Smithway Motor Xpress Corp. 2005 Omnibus Stock Plan    reference

10.2      Form of Non-Statutory Stock Option Agreement           Incorporated by
          (Employee) under Smithway Motor Xpress Corp. 2005      reference
          Omnibus Stock Plan

10.3      Form of Non-Statutory Stock Option Agreement           Incorporated by
          (Director) under Smithway Motor Xpress Corp. 2005      reference
          Omnibus Stock Plan

31.1      Rule 13a-14(a)/15d-14(a) Certification of Chief        Filed herewith
          Executive Officer

31.2      Rule 13a-14(a)/15d-14(a) Certification of Chief        Filed herewith
          Financial Officer

32.1      Certification pursuant to 18 U.S.C. Section 1350, as   Filed herewith
          adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002, by G. Larry Owens, the
          Registrant's principal executive officer

32.2      Certification pursuant to 18 U.S.C. Section 1350, as   Filed herewith
          adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002, by Douglas C. Sandvig,
          the Registrant's principal financial officer
</TABLE>