UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC 20549-1004
                      ------------------------------------

                                    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 June 30, 1998

(  )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934


                         Commission File Number 0-27208

                       Simon Transportation Services Inc.
             (Exact name of registrant as specified in its charter)



            Nevada                                     87-0545608
(State or other jurisdiction of          (I.R.S. employer identification number)
 incorporation or organization)


                              5175 West 2100 South
                          West Valley City, Utah 84120
                                 (801) 924-7000
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                           principal executive office)


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 the  filing
requirements for at least the past 90 days.


                                    YES X NO


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date (June 30, 1998).

             Class A Common Stock, $.01 par value: 5,372,683 shares
              Class B Common Stock, $.01 par value: 913,751 shares

                                                     Exhibit Index is on Page 12


<PAGE>



                        SIMON TRANSPORTATION SERVICES INC.
                                 TABLE OF CONTENTS

                                      PART I

                               FINANCIAL INFORMATION


                                                                         PAGE
                                                                        NUMBER

Item 1.      Financial Statements:

             Condensed consolidated statements
                 of financial position as of
                 June 30, 1998 and September 30, 1997                      3

             Condensed consolidated statements
                 of earnings for the three months and nine
                 months ended June 30, 1998 and 1997                       4

             Condensed consolidated statements
                 of cash flows for the nine months ended
                 June 30, 1998 and 1997                                    5

             Notes to condensed consolidated financial statements          6

Item 2.      Management's discussion and analysis of financial
             condition and results of operations                           7



                                 PART II

                            OTHER INFORMATION



Item 1.      Legal Proceedings                                            12

Item 2.      Changes in Securities                                        12

Item 3.      Defaults Upon Senior Securities                              12

Item 4.      Submission of Matters to a Vote of Security Holders          12

Item 5.      Other Information                                            12

Item 6.      Exhibits and Reports on Form 8-K                             12


<PAGE>


                                                                               
                         SIMON TRANSPORTATION SERVICES INC.
               CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                                       ASSETS

<TABLE>
<CAPTION>
                                                                                 June 30, 1998           September 30, 1997
                                                                                 -------------           ------------------
                                                                                  (Unaudited)
<S>                                                                        <C>                             <C>    
Current Assets:
         Cash                                                              $         8,840,051             $     12,766,001
         Receivables, net of allowance for doubtful accounts of
         $119,000 and $62,000, respectively                                         18,863,005                   20,712,286
         Operating supplies                                                            861,148                      752,213
         Prepaid expenses and other                                                  3,992,306                    2,193,950
                                                                       ------------------------     ------------------------
                  Total current assets                                              32,556,510                   36,424,450
                                                                       ------------------------     ------------------------

Property and Equipment, at cost:
         Land                                                                        7,646,922                    7,632,711
         Revenue equipment                                                          47,120,429                   59,392,072
         Buildings and improvements                                                 18,806,510                   14,321,869
         Office furniture and equipment                                              8,010,190                    5,974,291
                                                                       ------------------------     ------------------------
                                                                                    81,584,051                   87,320,943
         Less accumulated depreciation and amortization                            (16,836,798)                 (16,166,473)
                                                                       ------------------------     ------------------------
                                                                                    64,747,253                   71,154,470
                                                                       ------------------------     ------------------------
Other Assets                                                                           205,770                      125,450
                                                                       ========================     ========================
                                                                           $        97,509,533             $    107,704,370
                                                                       ========================     ========================

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
         Current portion of long-term debt                                 $         7,579,769             $      6,382,697
         Current portion of capitalized lease obligations                            2,142,265                    5,346,645
         Accounts payable                                                            4,443,334                    3,593,420
         Accrued liabilities                                                         2,462,240                    3,957,055
         Accrued claims payable                                                      1,169,102                    1,259,674
                                                                       ------------------------     ------------------------
                  Total current liabilities                                         17,796,710                   20,539,491
                                                                       ------------------------     ------------------------

Long-Term Debt, net of current portion                                              11,009,455                   14,638,389
                                                                       ------------------------     ------------------------
Capitalized Lease Obligations, net of current portion                                2,552,648                    6,423,385
                                                                       ------------------------     ------------------------
Deferred Income Taxes                                                                6,254,445                    6,254,445
                                                                       ------------------------     ------------------------

Stockholders' Equity:
         Preferred stock, $.01 par value, 5,000,000 shares
         authorized, none issued                                                            --                           --
         Class A common stock, $.01 par value, 20,000,000 shares
         authorized, 5,372,683 and 5,320,313 shares issued, respectively                53,727                       53,203
         Class B common stock, $.01 par value, 5,000,000 shares
         authorized, 913,751 and 962,661 shares issued, respectively                     9,138                        9,627
         Additional paid-in capital                                                 48,264,713                   48,233,608
         Retained earnings                                                          11,568,697                   11,552,222
                                                                       ------------------------     ------------------------
                  Total stockholders' equity                                        59,896,275                   59,848,660
                                                                       ------------------------     ------------------------
                                                                           $        97,509,533             $    107,704,370
                                                                       ========================     ========================


<FN>

                         The  accompanying   notes  to  condensed   consolidated
                          financial  statements  are an  integral  part of these
                          condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>


                       SIMON TRANSPORTATION SERVICES INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                For the Three Months Ended           For the Nine Months Ended
                                                       -----------------------------------------------------------------------------
                                                            June 30, 1998      June 30, 1997      June 30, 1998       June 30, 1997
                                                            -------------      -------------      -------------       -------------

<S>                                                        <C>               <C>                 <C>                 <C>           
Operating Revenue                                          $   50,054,991    $    41,190,623     $  143,510,822      $  111,121,642
                                                       --------------------------------------------------------- -------------------

Operating Expenses:
         Salaries, wages, and benefits                         21,552,353         16,304,641         58,915,495          43,346,986
         Fuel & fuel taxes                                      9,275,404          7,946,623         26,635,452          21,566,883
         Operating supplies and expenses                        6,656,953          4,919,653         20,237,124          13,753,234
         Taxes and licenses                                     1,516,404          1,263,791          4,872,748           3,752,421
         Insurance and claims                                   1,232,362            911,213          4,152,060           2,371,691
         Communications and utilities                           1,079,165            679,245          2,924,327           1,813,962
         Depreciation and amortization                          1,330,842          1,290,488          3,669,524           4,090,554
         Rent                                                   7,501,373          4,597,370         20,613,548          12,252,776
                                                       --------------------------------------------------------- -------------------
                  Total operating expenses                     50,144,856         37,913,024        142,020,278         102,948,507
                                                       --------------------------------------------------------- -------------------
                  Operating earnings (loss)                       (89,865)         3,277,599          1,190,544           8,173,135
         Gain on sale of real property                                 --          1,896,025                 --           1,896,025
         Net interest expense                                    (344,811)          (254,435)        (1,164,056)           (938,356)
                                                       --------------------------------------------------------- -------------------
Earnings (loss) before income taxes                              (434,676)         4,919,189             26,488           9,130,804
Provision (benefit) for income taxes                             (164,308)         1,859,361             10,012           3,451,351
                                                       ========================================================= ===================
Net earnings (loss)                                        $     (270,368)   $     3,059,828     $       16,476      $    5,679,453
                                                       ========================================================= ===================


Net earnings (loss) per common share
         Basic                                             $        (0.04)   $          0.49     $         0.00      $         1.03
                                                       ========================================================= ===================
         Diluted                                           $        (0.04)   $          0.48     $         0.00      $         1.01
                                                       ========================================================= ===================

Weighted average common shares outstanding
         Basic                                                  6,286,427          6,280,371          6,285,582           5,514,386
                                                       ========================================================= ===================
         Diluted                                                6,286,427          6,406,048          6,285,582           5,640,063
                                                       ========================================================= ===================

<FN>


                         The  accompanying   notes  to  condensed   consolidated
                          financial  statements  are an  integral  part of these
                          condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>


                        SIMON TRANSPORTATION SERVICES INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                              For the Nine Months Ended
                                                                                    ---------------------------------------------
                                                                                        June 30, 1998         June 30, 1997

<S>                                                                                     <C>                   <C>
Cash Flows From Operating Activities:
     Net earnings                                                                       $      16,476         $    5,679,453
     Adjustments to reconcile net earnings to net cash provided by
     operating activities
              Depreciation and amortization                                                 3,669,524              4,090,555
              Gain on sale of real property                                                        --             (1,896,025)
              Changes in operating assets and liabilities:
                  Decrease (increase) in receivables, net                                     760,781             (2,783,574)
                  Increase in operating supplies                                             (108,935)              (325,111)
                  Increase in prepaid expenses and other                                   (1,798,356)              (775,057)
                  (Increase) decrease in other assets                                         (80,320)               192,195
                  Increase in accounts payable                                                849,914              1,194,477
                  (Decrease) increase in accrued liabilities                               (1,494,815)               658,934
                  Decrease in accrued claims payable                                          (90,572)              (239,331)
                                                                                    ---------------------------------------------
                      Net cash provided by operating activities                             1,723,697              5,796,516
                                                                                    ---------------------------------------------

Cash Flows From Investing Activities:
     Purchase of property and equipment                                                    (8,403,107)           (27,399,088)
     Proceeds from the sale of property and equipment                                      11,140,800              9,497,034
                                                                                    ---------------------------------------------
                      Net cash provided by (used in) investing activities                   2,737,693            (17,902,054)
                                                                                    ---------------------------------------------

Cash Flows From Financing Activities:
     Proceeds from issuance of long-term debt                                               2,900,000              5,827,740
     Principal payments on long-term debt                                                  (5,331,862)            (2,137,092)
     Principal payments under capitalized lease obligations                                (7,075,117)            (3,792,615)
     Decrease in receivable from sale of equipment                                          1,088,500                     --
     Net proceeds from issuance of Class A common stock                                        31,139             22,945,917
                                                                                    ---------------------------------------------
                      Net cash (used in) provided by financing activities                 (8,387,340)             22,843,950
                                                                                    ---------------------------------------------

Net (Decrease) Increase In Cash                                                            (3,925,950)            10,738,412
Cash at Beginning of Period                                                                12,766,001              5,571,431
                                                                                    ---------------------------------------------

Cash at End of Period                                                                   $   8,840,051         $   16,309,843
                                                                                    =============================================

Supplemental Disclosure of Cash Flow Information:
         Cash paid during the period for interest                                       $   1,440,353         $    1,375,803
         Cash paid during the period for income taxes                                         688,868              3,345,181

Supplemental Schedule of Noncash Investing and Financing Activities:
         Sale of equipment in exchange for receivable paid after
              period end                                                                           --                139,142



<FN>



                         The  accompanying   notes  to  condensed   consolidated
                          financial  statements  are an  integral  part of these
                          condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>


                                                                               
                      SIMON TRANSPORTATION SERVICES INC.

            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (Unaudited)

Note 1.           Basis of Presentation

                  The condensed  consolidated  financial  statements include the
                  accounts  of  Simon  Transportation  Services  Inc.,  a Nevada
                  holding company,  and its wholly owned subsidiary,  Dick Simon
                  Trucking,  Inc.  (together,  the  "Company").  All significant
                  intercompany balances and transactions have been eliminated in
                  consolidation.

                  The financial statements have been prepared, without audit, in
                  accordance  with  generally  accepted  accounting  principles,
                  pursuant to the rules and  regulations  of the  Securities and
                  Exchange  Commission.  In  the  opinion  of  management,   the
                  accompanying  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  September  30,  1997  condensed
                  consolidated  statement of financial position 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 Form  10-K of Simon  Transportation  Services
                  Inc.  for the  year  ended  September  30,  1997.  Results  of
                  operations in interim periods are not  necessarily  indicative
                  of results to be expected for a full year.

Note 2:           Recent Accounting Pronouncement

                  In June 1998, the Financial  Accounting Standards Board issued
                  SFAS No.  133,  "Accounting  for  Derivative  Instruments  and
                  Hedging Activities." The Statement establishes  accounting and
                  reporting standards  requiring that derivative  instruments be
                  recorded in the balance  sheet as either an asset or liability
                  measured   at  its  fair   value  and  that   changes  in  the
                  derivative's  fair value be  recognized  currently in earnings
                  unless specific hedge accounting  criteria are met.  Statement
                  133 is  effective  for fiscal years  beginning  after June 15,
                  1999.  Management  expects that the adoption of this statement
                  will not have a material effect on the Company's  consolidated
                  financial statements.

Forward Looking Statements

This  quarterly  report  and  statements  by  the  Company  in  reports  to  its
stockholders  and public filings,  as well as oral public  statements by Company
representatives  may contain certain forward looking information that is subject
to certain  risks and  uncertainties  that could cause actual  results to differ
materially  from  those   projected.   Without   limitation,   these  risks  and
uncertainties  include economic  recessions or downturns in customers'  business
cycles, excessive increases in capacity within the truckload markets,  decreased
demand for transportation  services offered by the Company,  rapid inflation and
fuel price  increases,  increases in interest rates,  and the  availability  and
compensation  of  qualified  drivers.  Readers  should  review and  consider the
various  disclosures made by the Company in this quarterly  statement and in its
reports to its stockholders and periodic reports on Forms 10-K and 10-Q.

<PAGE>



               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

Overview

         The Company's  fiscal year ends on September 30 of each year. Thus, the
fiscal  periods  discussed in this report  represent the Company's  third fiscal
quarters and nine months of its 1998 and 1997 fiscal years, respectively.

         During the quarter ended June 30, 1998,  the Company  experienced a net
loss. The loss was primarily  attributable to an increase in driver wages and an
increase in the number of tractors  without drivers over historical  levels.  To
assist in recruiting and retaining  drivers,  the Company approved a driver wage
increase of $.02 per mile effective  January 1, 1998 and an additional  increase
of $.02 per mile  effective  April 15, 1998.  The Company  actively  sought rate
increases  to cover  increases  in operating  costs,  including  the driver wage
increase. Most of the proposed rate adjustments have been granted with effective
dates ranging from the last half of June through the first half of July 1998.(*)


Results of Operations

Three months ended June 30, 1998 and 1997

         Operating  revenue  increased $8.9 million (21.6%) to $50.1 million for
the three months ended June 30, 1998,  from $41.2 million for the  corresponding
period of 1997. The increase in operating revenue was primarily  attributable to
a 28.8% increase in weighted average tractors,  to 1,552 in the 1998 period from
1,205 in the corresponding 1997 period.  This increase was partially offset by a
5.6%  decrease in average  revenue  per tractor per week,  to $2,503 in the 1998
period from $2,652 in the 1997 period.

         Salaries,  wages, and benefits  increased $5.3 million (32.5%) to $21.6
million  during the quarter  ended June 30, 1998 from $16.3  million in the 1997
period. As a percentage of revenue,  salaries,  wages, and benefits increased to
43.1% of revenue for the three months  ended June 30,  1998,  from 39.6% for the
corresponding period of 1997. The increase was primarily  attributable to driver
wage increases.  In order to remain  competitive in its compensation  package to
drivers, the Company raised driver base pay two cents per mile effective January
1, 1998 and an additional two cents per mile effective April 15, 1998.

         Fuel and fuel taxes  increased  $1.4  million  (17.7%) to $9.3  million
during the quarter ended June 30, 1998 from $7.9 million in the 1997 period.  As
a percentage of revenue,  fuel and fuel taxes  decreased to 18.5% of revenue for
the three months ended June 30, 1998, from 19.3% for the corresponding period of
1997,  principally  as a result  of lower  fuel  prices  in the 1998  period  as
compared with the 1997 period.

         Operating  supplies and expenses increased $1.8 million (36.7%) to $6.7
million  during the quarter  ended June 30,  1998 from $4.9  million in the 1997
period. As a percentage of revenue, operating supplies and expenses increased to
13.3% of revenue for the three months  ended June 30,  1998,  from 11.9% for the
corresponding  period  of 1997,  primarily  as a result  of  increased  costs of
accident repairs not covered under vehicle  warranties and the cost of preparing
equipment for trade.  Substantially all of the Company's tractors are covered by
three-year, 500,000-mile warranties.

         Taxes and licenses  increased  $250,000  (19.2%) to $1.5 million during
the quarter ended June 30, 1998 from $1.3 million for the  corresponding  period
of 1997. As a percentage  of revenue,  taxes and licenses  remained  essentially
unchanged at 3.0% of revenue for the three months ended June 30, 1998,  compared
with 3.1% for the corresponding period of 1997.
__________________________________________
(*) May contain forward looking statements
<PAGE>

         Insurance and claims increased  $320,000 (35.1%) to $1.2 million during
the quarter  ended June 30, 1998 from $911,000 for the  corresponding  period of
1997.  As a percentage  of revenue,  insurance  and claims  increased to 2.5% of
revenue  for  the  three  months  ended  June  30,  1998,   from  2.2%  for  the
corresponding  period of 1997  because of an increase in the number of accidents
experienced by the Company during the quarter.

         Communications and utilities increased $400,000 (58.9%) to $1.1 million
during the  quarter  ended June 30,  1998 from  $679,000  for the  corresponding
period  of 1997.  As a  percentage  of  revenue,  communications  and  utilities
increased to 2.2% of revenue for the three months ended June 30, 1998, from 1.6%
for the  corresponding  period of 1997,  primarily  as a result of an access fee
charged to the Company by the owners of pay  telephones  based on phone calls to
toll free numbers.  In addition,  the fixed costs of utilities for the Company's
terminals  and  costs  associated  with  the  usage of the  Company's  satellite
tracking  system did not remain  proportionate  with the  decreased  revenue per
tractor.

         Depreciation and  amortization  remained  essentially  constant at $1.3
million  during the quarters  ended June 30, 1998 and 1997.  As a percentage  of
revenue, depreciation and amortization (adjusted for the net gain on the sale of
property and equipment)  decreased to 2.7% of revenue for the three months ended
June 30, 1998, from 3.1% for the corresponding  period of 1997. The decrease was
primarily attributable to the use of operating leases rather than capital leases
to acquire new equipment  during the last year. The Company  realized a net gain
of $384,832 on the sale of property and revenue equipment during the 1998 period
compared with a $512,244 net gain during the 1997 period.

         Rent increased $2.9 million  (63.0%) to $7.5 million during the quarter
ended June 30, 1998 from $4.6 million for the corresponding period of 1997. As a
percentage of revenue,  rent  increased to 15.0% of revenue for the three months
ended  June 30,  1998,  from 11.2% for the  corresponding  period of 1997 as the
Company added new equipment and replaced  equipment that had been financed under
capital lease  arrangements  with equipment  financed under operating leases. In
addition,  the fixed monthly rental payments were not as efficiently spread over
lower revenue per tractor. The Company has utilized operating leases in the most
recent quarter because of more favorable terms. If the Company  continues to use
operating lease  financing,  its operating ratio will continue to be affected in
future  periods  because  the  implied  financing  costs of such  equipment  are
included as operating expenses instead of interest expense.

         As a result of the foregoing,  the Company's  operating ratio increased
to  100.2%  for the  three  months  ended  June 30,  1998,  from  92.0%  for the
corresponding period of 1997.

         The  Company  realized a gain of  $1,896,025  on the sale of its former
headquarter  facilities  to the  municipality  of Murray  City  during the three
months ended June 30, 1997.  This  non-recurring  transaction  increased  pretax
earnings by 4.6% of revenue during the 1997 period.

         Net interest expense  increased  $91,000 (35.8%) to $345,000 during the
quarter ended June 30, 1998 from $254,000 for the corresponding  period of 1997.
As a percentage of revenue, net interest expense remained essentially  unchanged
at 0.7% of revenue for the three months ended June 30, 1998,  compared with 0.6%
for the corresponding period in 1997.

         The Company's  effective combined federal and state income tax rate for
the three months ended June 30, 1998 and 1997 was 37.8%.

         As a result of the factors  described above, the Company  experienced a
net loss of $270,368 for the three months ended June 30, 1998, compared with net
earnings of $3,059,828  ($1,880,408  excluding the gain on sale of the Company's
former headquarters) for the corresponding period of 1997.

Nine months ended June 30, 1998 and 1997

         Operating revenue increased $32.1 million (28.9%) to $143.2 million for
the nine months ended June 30, 1998,  from $111.1 million for the  corresponding
period of 1997. The increase in operating revenue was primarily  attributable to

__________________________________________
(*) May contain forward looking statements
<PAGE>

a 35.1% increase in weighted average tractors,  to 1,468 in the 1998 period from
1,087 in the 1997 period.  This increase was partially offset by a 4.9% decrease
in average  revenue  per  tractor  per week,  to $2,514 in the 1998  period from
$2,644 in the 1997 period.

         Salaries,  wages, and benefits increased $15.6 million (36.0%) to $58.9
million  during the nine months  ended June 30,  1998 from $43.3  million in the
1997 period. As a percentage of revenue, salaries, wages, and benefits increased
to 41.1% of revenue for the nine months ended June 30, 1998,  from 39.0% for the
corresponding  period of 1997.  The  change  is  primarily  attributable  to two
increases in the driver base pay per mile.  The Company  raised  driver base pay
two cents per mile effective January 1, 1998 and again on April 15, 1998.

         Fuel and fuel taxes  increased  $5.0 million  (23.1%) to $26.6  million
during  the nine  months  ended  June 30,  1998 from  $21.6  million in the 1997
period.  As a percentage of revenue,  fuel and fuel taxes  decreased to 18.6% of
revenue  for  the  nine  months  ended  June  30,  1998,   from  19.4%  for  the
corresponding  period of 1997,  principally  as a result of a lower fuel  prices
during the 1998 period.

         Operating supplies and expenses increased $6.4 million (46.4%) to $20.2
million  during the nine months  ended June 30,  1998 from $13.8  million in the
1997  period.  As a  percentage  of revenue,  operating  supplies  and  expenses
increased  to 14.1% of revenue for the nine  months  ended June 30,  1998,  from
12.4% for the corresponding  period of 1997,  primarily as a result of increased
costs of accident  repairs not covered under vehicle  warranties and the cost of
preparing  equipment for trade.  Substantially all of the Company's tractors are
covered by three-year, 500,000-mile warranties.

         Taxes and  licenses  increased  $1.1  million  (28.9%) to $4.9  million
during  the  nine  months  ended  June  30,  1998  from  $3.8  million  for  the
corresponding  period of 1997.  As a percentage  of revenue,  taxes and licenses
remained  essentially constant at 3.4% of revenue for the nine months ended June
30, 1998, and 1997.

         Insurance  and claims  increased  $1.8 million  (75.0%) to $4.2 million
during  the  nine  months  ended  June  30,  1998  from  $2.4  million  for  the
corresponding  period of 1997. As a percentage of revenue,  insurance and claims
increased to 2.9% of revenue for the nine months ended June 30, 1998,  from 2.1%
for the corresponding period of 1997,  principally as a result of an increase in
the number and  severity of  accidents  experienced  by the  Company  during the
period.  Most  of  the  increase  was  attributable  to the  Company's  accident
experience during the second fiscal quarter.

         Communications  and utilities  increased  $1.1 million  (61.1%) to $2.9
million  during the six months  ended June 30,  1998 from $1.8  million  for the
corresponding  period of 1997.  As a percentage of revenue,  communications  and
utilities  increased to 2.0% of revenue for the nine months ended June 30, 1998,
compared with 1.6% for the corresponding  period of 1997,  primarily as a result
of an access fee charged to the Company by the owners of pay telephones based on
phone calls to toll free numbers. In addition,  the fixed costs of utilities for
the  Company's  terminals  and the  cost of  usage  of the  Company's  satellite
tracking  system did not remain  proportionate  with the decrease in revenue per
tractor.

         Depreciation and amortization decreased $400,000 (9.8%) to $3.7 million
during  the  nine  months  ended  June  30,  1998  from  $4.1  million  for  the
corresponding  period of 1997.  As a  percentage  of revenue,  depreciation  and
amortization  (adjusted for the net gain on the sale of property and  equipment)
decreased to 2.6% of revenue for the nine months ended June 30, 1998,  from 3.7%
for the corresponding period of 1997. The decrease was primarily attributable to
the use of operating  leases rather than capital leases to acquire new equipment
during the last year. The Company  realized a net gain of $1,707,327 on the sale
of  property  and  revenue  equipment  during the 1998  period  compared  with a
$1,391,427 net gain during the 1997 period.

         Rent  increased  $8.3 million  (67.5%) to $20.6 million during the nine
months ended June 30, 1998 from $12.3  million for the  corresponding  period of
1997.  As a percentage  of revenue,  rent  increased to 14.4% of revenue for the
nine months ended June 30, 1998, from 11.0% for the corresponding period of 1997
as the Company added new equipment and replaced equipment that had been financed

__________________________________________
(*) May contain forward looking statements
<PAGE>

under capital lease arrangements with equipment financed under operating leases.
In addition,  the fixed monthly rental  payments were not as efficiently  spread
over lower revenue per tractor. The Company has utilized operating leases in the
most  recent  nine  months  because  of more  favorable  terms.  If the  Company
continues to use operating lease financing, its operating ratio will continue to
be  affected in future  periods  because  the  implied  financing  costs of such
equipment are included as operating expenses instead of interest expense.

         As a result of the foregoing,  the Company's  operating ratio increased
to  99.2%  for  the  nine  months  ended  June  30,  1998,  from  92.6%  for the
corresponding period of 1997.

         The  Company  realized a gain of  $1,896,025  on the sale of its former
headquarter facilities to the municipality of Murray City during the nine months
ended June 30, 1997. This non-recurring transaction increased pretax earnings by
1.7% of revenue during the 1997 period.

         Net interest expense increased  $226,000 (24.1%) to $1.2 million during
the nine months ended June 30, 1998 from $938,000 for the  corresponding  period
of 1997. As a percentage of revenue,  net interest expense remained  essentially
constant at 0.8% of revenue for the nine months ended June 30, 1998, and 1997.

         The Company's  effective combined federal and state income tax rate for
the nine months ended June 30, 1998 and 1997 was 37.8%.

         As a result of the factors  described above, net earnings  decreased to
$16,476 for the nine months ended June 30, 1998,  compared  with net earnings of
$5,679,453  ($4,500,033  excluding  the  gain on sale  of the  Company's  former
headquarters) for the corresponding period of 1997.

Liquidity and Capital Resources

         The  growth  of  the  Company's   business  has  required   significant
investment in new revenue  equipment that the Company  historically has financed
with  borrowings  under   installment   notes  payable  to  commercial   lending
institutions  and equipment  manufacturers,  equipment  leases from  third-party
lessors,  borrowings  under its line of  credit,  funds  provided  by its public
offerings in November 1995 and February 1997, and cash flow from operations. The
Company's primary sources of liquidity  currently are cash and cash equivalents,
cash flow from operations, and borrowings and leases with financial institutions
and  equipment  manufacturers.  Management  believes  the  Company's  sources of
liquidity are adequate to meet its current and projected needs.(*)

         The  Company's  primary  source  of cash flow  from  operations  is net
earnings  adjusted for depreciation and  amortization.  The Company's  principal
uses of cash  flow  from  operations  are to  service  debt  or  lease  payments
associated  with new revenue  equipment  and to purchase  property and equipment
associated  with  growth  in  the  business.  Net  cash  provided  by  operating
activities was $1.7 million for the nine months ended June 30, 1998. The primary
sources  of funds were net  earnings  of $16,500  increased  by $3.7  million in
depreciation,  a  $761,000  decrease  in  accounts  receivable  and an  $850,000
increase in accounts  payable.  The primary  uses of funds were $1.8  million to
prepay  licensing  on revenue  equipment,  $1.5  million  and  $91,000 to reduce
accrued liabilities and accrued claims payable,  respectively,  and $109,000 and
$80,000 to increase operating supplies and other assets, respectively.

         Net cash provided by investing activities was $2.7 million for the nine
months ended June 30, 1998, as the Company purchased $8.4 million of new revenue
equipment and a new facility in Atlanta,  Georgia. The Company sold property and
equipment for $11.1 million. The Company expects capital expenditures (primarily
for  revenue  equipment  and  satellite  communications  units),  net of revenue
equipment sales and trade-ins,  to be approximately $77.2 million through fiscal
1999.

         Net cash used in  financing  activities  was $8.4  million  in the 1998
period,  consisting primarily of $2.9 million of new borrowings for the purchase
of the Atlanta  facility,  a reduction of $1.1 in  receivables  from the sale of
revenue  equipment,  and  payments  of $12.4  million  of  principal  under  the
Company's  long-term debt and capitalized  lease  agreements.  In addition,  the

__________________________________________
(*) May contain forward looking statements
<PAGE>

Company  received $31,000 from the exercise of stock options and the issuance of
stock to individuals who participate in the Company's stock option plans.

         The Company's borrowings consist of $13.8 million for revenue equipment
debt and capitalized leases, and $9.5 million for the Company's new headquarters
in Salt Lake City and the Atlanta facility. The Company maintains a $10 million,
unsecured line of credit with a financial institution. Borrowings on the line of
credit bear interest at one-half percent (.5%) above the 30-day London Interbank
Offered  Rate  ("LIBOR")  in  effect  from  time to  time.  The  Company  had no
outstanding draws against the line of credit at June 30, 1998.

         In July 1998, the Company  announced a stock  repurchase  program.  The
Board of Directors has  authorized  the  repurchase  of up to 500,000  shares of
Class A Common  Stock.  The purchase may be made in the open market or otherwise
from time-to-time between July 1998 and September 1999.
                                                         .
__________________________________________
(*) May contain forward looking statements
<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.

                  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.

Item 6.           Exhibits and Reports on Form 8-K.

                  (a)      Exhibits

Number            Description


        3.1    *  Articles of Incorporation
        3.2    *  Bylaws
        4.1    *  Articles of Incorporation
        4.2    *  Bylaws
       10.2    *  Outside Director Stock Option Plan.
       10.3    *  Incentive Stock Plan.
       10.4    *  401(k) Plan.
       10.11   #  Loan Agreement (Line of Credit) dated April 29, 1996 (replaced
                  loan  agreement dated  December 1, 1995) between  U.S. Bank of
                  Utah and Simon Transportation Services Inc.
       11         Schedule of Computation of Net Income Per Share
       27         Financial Data Schedule


          *       Incorporated by reference from the Company's Registration
                  Statement on Form S-1, Registration No. 33-96876, effective
                  November 17, 1995.

          #       Incorporated by reference from the Company's Quarterly Report
                  on Form 10-Q for the period ended June 30, 1996, Commission
                  File No. 0-27208, dated August 9, 1996.


                  (b)      Reports on Form 8-K.

                           None.


<PAGE>


                                    SIGNATURE

                  Pursuant to the  requirements  of the  Securities and Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                                  SIMON TRANSPORTATION SERVICES INC.,
                                  a Nevada corporation

Date:    July 31, 1998            By:      /s/ Alban B. Lang
         ---------------------             -----------------
                                           (Signature)

                                           Alban B. Lang
                                           Treasurer and Chief Financial Officer