UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

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# FORM 10-Q

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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

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

# Commission file number 0-24908

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TRANSPORT CORPORATION OF AMERICA, INC.
(Exact name of registrant as specified in its charter)

|Minnesota                         | 41-1386925         
|--------------------------------- | -------------------
|(State or other jurisdiction      | (I.R.S. Employer   
|of incorporation or organization) | Identification No.)

1715 Yankee Doodle Road
Eagan, Minnesota
(Address of principal executive offices)
55121
(zip code)
(651) 686-2500
(Registrants telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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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:   YESx     
NOo

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):

YESo     
NOx

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

YESo     
NOx

As of October 31, 2005, the
Company had outstanding 6,566,942 shares of Common Stock, $.01 par value.





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TRANSPORT CORPORATION OF AMERICA, INC.
Quarterly Report on Form 10-Q

# Table of Contents

|Part I.  |  | FINANCIAL INFORMATION                                                                                 |  |         | 
|-------- |  | ----------------------------------------------------------------------------------------------------- |  | ------- | 
|        
|Item 1.  |  | Financial StatementsConsolidated Balance Sheets as of September 30, 2005 and December 31, 2004        |  | Page 3  | 
|        
|         |  | Consolidated Statements of Operations for the three and nine months ended September 30, 2005 and 2004 |  | Page 4  | 
|        
|         |  | Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004           |  | Page 5  | 
|        
|         |  | Notes to Consolidated Financial Statements                                                            |  | Page 6  | 
|        
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                 |  | Page 8  | 
|        
|Item 3.  |  | Quantitative and Qualitative Disclosure about Market Risk                                             |  | Page 19 | 
|        
|Item 4.  |  | Controls and Procedures                                                                               |  | Page 19 | 
|        
|Part II. |  | OTHER INFORMATION                                                                                     | 
|        
|Item 6.  |  | Exhibits                                                                                              |  | Page 20 | 

2

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Table of Contents

# PART I   FINANCIAL INFORMATION

Item 1.    Financial Statements

Transport Corporation of America, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)

|                                                                   | September 30,2005 |  | December 31,2004
|------------------------------------------------------------------ | ----------------- |  | ----------------
|Assets                                                             |                   |  |                 
|Current assets:                                                    |                   | 
|Cash and cash equivalents                                          |                   |  | $               
|Trade accounts receivable, net of allowances for doubtful accounts |                   | 
|and other billing adjustments of $615 at September 30, 2005        |                   | 
|and $800 at December 31, 2004                                      |                   |  |                 
|Other receivables                                                  |                   |  |                 
|Operating supplies  inventory                                     |                   |  |                 
|Deferred income tax benefit                                        |                   |  |                 
|Prepaid expenses                                                   |                   |  |                 
|                                                                   |                   |  |                 
|Total current assets                                               |                   |  |                 
|                                                                  
|Property and equipment:                                            |                   | 
|Revenue equipment, at cost                                         |                   |  |                 
|Less accumulated depreciation                                      |                   |  |                 
|                                                                   |                   |  |                 
|Revenue equipment, net                                             |                   |  |                 
|                                                                  
|Property and other equipment                                       |                   | 
|Land, buildings, and improvements                                  |                   |  |                 
|Other equipment and leasehold improvements                         |                   |  |                 
|Less accumulated depreciation                                      |                   |  |                 
|                                                                   |                   |  |                 
|Property and equipment, net                                        |                   |  |                 
|                                                                   |                   |  |                 
|                                                                  
|Revenue, property, and other equipment, net                        |                   |  |                 
|                                                                  
|Other assets, net                                                  |                   |  |                 
|                                                                  
|                                                                   |                   |  |                 
|Total assets                                                       |                   |  |                 
|                                                                   |                   |  |                 
|                                                                  
|Liabilities and Shareholders Equity                               |                   | 
|Current liabilities:                                              
|Current maturities of long-term debt                               |                   |  |                 
|Current maturities of capital lease obligations                    |                   |  |                 
|Accounts payable                                                   |                   |  |                 
|Checks issued in excess of cash balances                           |                   |  |                 
|Due to independent contractors                                     |                   |  |                 
|Accrued expenses                                                   |                   |  |                 
|                                                                   |                   |  |                 
|Total current liabilities                                          |                   |  |                 
|                                                                  
|Long-term debt, less current maturities                            |                   |  |                 
|Capital lease obligations, less current maturities                 |                   |  |                 
|                                                                  
|Deferred income taxes                                              |                   |  |                 
|                                                                  
|Shareholders equity:                                              |                   | 
|Common stock, $.01 par value; 15,000,000 shares authorized,       
|6,563,636 and 6,527,392 shares issued and outstanding as of       
|September 30, 2005 and December 31, 2004, respectively             |                   |  |                 
|Additional paid-in capital                                         |                   |  |                 
|Retained earnings                                                  |                   |  |                 
|                                                                   |                   |  |                 
|Total shareholders equity                                         |                   |  |                 
|                                                                   |                   |  |                 
|Total liabilities and shareholders equity                         |                   |  | $               
|                                                                   |                   |  |                 

See accompanying notes to consolidated financial statements.

3

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Table of Contents

Transport Corporation of America, Inc.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)

|                                          | Three months endedSeptember 30, |  | Nine months endedSeptember 30,
|----------------------------------------- | ------------------------------- |  | ------------------------------
|
|Operating revenues                        |                                 |  | $                             
|                                         
|Operating expenses:                       |                                 | 
|Salaries, wages, and benefits             |                                 |  |                               
|Fuel, maintenance, and other expenses     |                                 |  |                               
|Purchased transportation                  |                                 |  |                               
|Revenue equipment leases                  |                                 |  |                               
|Depreciation and amortization             |                                 |  |                               
|Insurance, claims and damage              |                                 |  |                               
|Taxes and licenses                        |                                 |  |                               
|Communications                            |                                 |  |                               
|Other general and administrative expenses |                                 |  |                               
|Impairment of sublease office space       |                                 |  |                               
|Gain on sale of property and equipment    |                                 |  |                               
|                                          |                                 |  |                               
|Total operating expenses                  |                                 |  |                               
|                                          |                                 |  |                               
|                                         
|Operating income                          |                                 |  |                               
|                                         
|Interest expense                          |                                 |  |                               
|Interest income                           |                                 |  |                               
|                                          |                                 |  |                               
|Interest expense, net                     |                                 |  |                               
|                                          |                                 |  |                               
|                                         
|Earnings before income taxes              |                                 |  |                               
|                                         
|Provision for income taxes                |                                 |  |                               
|                                          |                                 |  |                               
|                                         
|Net earnings                              |                                 |  |                               
|                                          |                                 |  |                               
|                                         
|                                         
|Net earnings per share  basic:           |                                 |  | $                             
|                                          |                                 |  |                               
|                                         
|Net earnings per share  diluted:         |                                 |  | $                             
|                                          |                                 |  |                               
|                                         
|Average common shares outstanding:        |                                 | 
|Basic                                     |                                 |  |                               
|Diluted                                   |                                 |  |                               

See accompanying notes to consolidated financial statements.

4

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Table of Contents

Transport Corporation of America, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

|                                                                                    | Nine months endedSeptember 30,
|----------------------------------------------------------------------------------- | ------------------------------
|
|Operating activities:                                                               |                               
|Net income                                                                          |                               
|Adjustments to reconcile net earnings to net cash provided by operating activities:
|Depreciation and amortization                                                       |                               
|Sublease impairment                                                                 |                               
|Gain on sale of property and equipment                                              |                               
|Deferred income taxes                                                               |                               
|Changes in operating assets and liabilities:                                        |                               
|Trade receivables                                                                   |                               
|Other receivables                                                                   |                               
|Operating supplies - Inventory                                                      |                               
|Prepaid expenses                                                                    |                               
|Other assets                                                                        |                               
|Accounts payable                                                                    |                               
|Due to independent contractors                                                      |                               
|Accrued expenses                                                                    |                               
|                                                                                    |                               
|Net cash provided by operating activities                                           |                               
|                                                                                    |                               
|Investing activities:                                                               |                               
|Purchases of revenue equipment                                                      |                               
|Purchases of property and other equipment                                           |                               
|Proceeds from disposition of equipment                                              |                               
|                                                                                    |                               
|Net cash used by investing activities                                               |                               
|                                                                                    |                               
|Financing activities:                                                              
|Proceeds from issuance of common stock, and exercise of options and warrants        |                               
|Payments for repurchase and retirement of common stock                              |                               
|Proceeds from issuance of long-term debt                                            |                               
|Principal payments on long-term debt                                                |                               
|Proceeds from issuance of notes payable to bank                                     |                               
|Principal payments on notes payable to bank                                         |                               
|Change in net checks issued in excess of cash balances                              |                               
|                                                                                    |                               
|Net cash used by financing activities                                               |                               
|                                                                                    |                               
|Net (decrease) increase in cash                                                     |                               
|Cash and cash equivalents, beginning of period                                      |                               
|                                                                                    |                               
|Cash and cash equivalents, end of period                                            |                               
|                                                                                    |                               
|                                                                                   
|Supplemental disclosure of cash flow information:                                  
|Cash paid during the period for:                                                    |                               
|Interest                                                                            |                               
|Income taxes                                                                        |                               
|Supplemental schedule of noncash investing and financing activities:               
|Lease receivables from disposition of revenue equipment                             |                               

See accompanying notes to consolidated financial statements.

5

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Table of Contents

# TRANSPORT CORPORATION OF AMERICA, INC.

Notes to Consolidated Financial Statements
(Unaudited)

|1. |  | Basis of Presentation
|-- |  | ---------------------

| | The unaudited
interim consolidated financial statements contained herein reflect all adjustments, which, in the opinion of management, are
necessary for a fair statement of the interim periods. They have been prepared in accordance with the instructions to Form 10-Q,
Article 10 of Regulation S-X and, accordingly, do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These interim
consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes included
in the Companys Annual Report on Form 10-K for the year ended December 31, 2004. The Company uses the accounting policies
described in that report in preparing quarterly reports.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Companys
business is seasonal. Operating results for the three-month or nine-month period ended September 30, 2005 are not necessarily
indicative of the results that may be expected for the year ending December 31, 2005.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Accounting Estimates
| | --------------------

| | The preparation of
consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Stock-Based Employee Compensation
|-- |  | ---------------------------------

| | The Company has
adopted the disclosure only provisions of SFAS No. 148 Accounting for StockBased Compensation  Transition and
Disclosure. As of September 30, 2005, the Company has two stock-based employee compensation plans. The Company accounts for
these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is reflected in net income
as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the
date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair
value recognition provisions of SFAS No. 123.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

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Table of Contents

|                                      | Three Months EndedSeptember 30 |  | Nine Months EndedSeptember 30
|------------------------------------- | ------------------------------ |  | -----------------------------
|
|Net earnings, as reported             |                                |  | $                            
|                                     
|Deduct: Total stock-based employee    |                                | 
|compensation expense determined       |                                | 
|under fair value based method for all |                                | 
|awards, net of related tax effects    |                                |  |                              
|                                      |                                |  |                              
|                                     
|Pro forma net earnings                |                                |  | $                            
|                                      |                                |  |                              
|                                     
|Earnings per share:                   |                                | 
|Basic  as reported                   |                                |  | $                            
|Basic  pro forma                     |                                |  | $                            
|                                     
|Diluted  as reported                 |                                |  | $                            
|Diluted  pro forma                   |                                |  | $                            

|3. |  | Computation of Earnings per Common Share(In thousands, except share and per share amounts)
|-- |  | ------------------------------------------------------------------------------------------

|                                             | Three months endedSeptember 30, |  | Nine months endedSeptember 30,
|-------------------------------------------- | ------------------------------- |  | ------------------------------
|
|Net earnings                                 |                                 |  | $                             
|                                             |                                 |  |                               
|                                            
|Average number of common                     |                                 | 
|shares outstanding                           |                                 |  |                               
|                                            
|Dilutive effect of outstanding stock options |                                 |  |                               
|                                             |                                 |  |                               
|                                            
|Average number of common and common          |                                 | 
|equivalent shares outstanding                |                                 |  |                               
|                                             |                                 |  |                               
|                                            
|                                            
|Net earnings per share  basic:              |                                 |  | $                             
|                                             |                                 |  |                               
|                                            
|Net earnings per share  diluted:            |                                 |  | $                             
|                                             |                                 |  |                               

|4. |  | New Accounting Pronouncements
|-- |  | -----------------------------

| | In December 2004,
the FASB issued SFAS No. 153, Exchanges of non-monetary assets, an amendment of APB Opinion No. 9", effective for
interim periods beginning after June 15, 2005. The adoption of this new accounting standard in the third quarter of 2005 has no
impact on the Companys financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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Table of Contents

|5. |  | Subsequent Event
|-- |  | ----------------

| | On October 26,
2005, the Company signed a definitive merger agreement to be acquired by a private equity investment firm. Transport America will
be the surviving entity after the merger. Under the terms of the merger agreement, each outstanding share of Transport
Americas common stock will be converted into the right to receive $10.00 in cash and all outstanding options, whether vested
or unvested, will become exercisable and the holders will receive the net value of the options.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The transaction is
expected to be completed in Transport Americas first fiscal quarter of 2006. Commitment letters have been obtained for all
necessary debt financing in connection with the transaction. The transaction is subject to approval by Transport Americas
shareholders, funding under the financing commitments, and other customary conditions, including regulatory approvals.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 2.    Managements Discussionand Analysis of Financial Condition and Results of Operations

# Organization of Financial Information

| | This
Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides material historical
and prospective disclosures intended to enable investors and other users to assess the Companys financial condition and
results of operations. Statements that are not historical are forward-looking and involve risks and uncertainties discussed under
the caption Forward-Looking Statements on page 18 of this Quarterly Report on Form 10-Q. The Company believes it
may be useful to read this MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2004, and
its reports on Forms 10-Q and 8-K and other publicly available information.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The condensed
consolidated financial statements and notes are presented in Item 1 of this Quarterly Report on Form 10-Q. Included in
the condensed consolidated financial statements are the consolidated balance sheets, consolidated statements of operations, and
consolidated statements of cash flows. The notes, which are an integral part of the condensed consolidated financial statements,
provide additional information required to fully understand the nature of amounts included in the condensed consolidated financial
statements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Significant Transactions and Financial Trends

| | Throughout this
Managements Discussion and Analysis (MD&A), you will read about significant transactions or events that materially
contribute to or reduce earnings and materially affect financial trends. Significant transactions discussed in this MD&A
include a gain resulting from the sale of a maintenance facility in the third quarter of 2005 and an impairment charge related to
a sublease agreement signed in the second quarter of 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These significant
transactions and events result from unique facts and circumstances that likely will not recur with similar materiality or impact
on future operations. While these items are important in understanding and evaluating financial results and trends, other
transactions or events such as those discussed later in this MD&A may also have a material impact on future operations. A
complete understanding of these transactions and events is necessary in order to estimate the likelihood that these trends will
continue.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

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Table of Contents

# Significant Operating Trends

| | Revenues continue
to be negatively impacted by lower than expected seated tractors and the limited availability of independent contractor capacity.
While the hiring market has tightened significantly, the Company continues to take actions that it expects will address this
trend, including increasing driver pay rates and attempting to design its network in such a manner as to offer drivers more time
to be at home. Average seated tractor counts by quarter for tractors owned by the Company and tractors provided by independent
contractors were as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|             | Average SeatedCompany Tractors |  | Average IndependentContractor Tractors |  | Total AverageSeated Tractors
|------------ | ------------------------------ |  | -------------------------------------- |  | ----------------------------
|1st Qtr 2004 |                                |  | 832                                    |  |                             
|2nd Qtr 2004 |                                |  | 895                                    |  |                             
|3rd Qtr 2004 |                                |  | 920                                    |  |                             
|4th Qtr 2004 |                                |  | 897                                    |  |                             
|1st Qtr 2005 |                                |  | 856                                    |  |                             
|2nd Qtr 2005 |                                |  | 828                                    |  |                             
|3rd Qtr 2005 |                                |  | 839                                    |  |                             

| | The reduction in
overall capacity reduces the number of miles the Company operates. Total miles decreased 17.8% to 37.0 million miles in the third
quarter 2005 compared to 45.0 million miles for the same period in 2004. The Company has been able to partially offset the effect
on revenues and earnings of the decrease in total miles through increased freight rates, improved efficiencies, and reduced costs.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | High fuel costs
continue to impact the Companys industry. While the Company is able to recover most of this increased cost through fuel
surcharge arrangements with the majority of its customers, the Company does absorb increased fuel costs on empty miles.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company had
favorable insurance, claim and accident experience in 2005 when compared to the same period 2004. The third quarter 2004 results
included additional expense related to several serious accidents that occurred during the period. Insurance, claims and damage
expense was $3.9 million, or 6.0% of revenue, during the third quarter 2004 compared to $2.0 million, or 3.1% of revenue, for the
same period 2005. Insurance, claim and damage expense was 9.8 million, or 5.1% of revenue for the first nine months of 2004
compared to $6.2 million, or 3.3% of revenue for the same period 2005.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company
continues to secure new opportunities that drive density and balance in the Companys network. In addition, the Company is
attaining increased freight rates as it better manages its network and customer mix.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Finally, the
Company continues to benefit from broad cost reduction initiatives implemented over the past three years which are expected to
continue to reduce non-driver salaries and wages, maintenance costs, accident claim costs, depreciation and other general and
administrative costs.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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Table of Contents

# Outlook

| | Looking forward,
the Company expects the rate environment to remain favorable throughout the remainder of 2005 as limited driver availability will
continue to put pressure on truckload capacity.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Even though the
Company has been successful in reducing specific costs, the industry continues to face cost pressures; driver pay rates are
increasing as the industry tries to attract and retain drivers; insurance and accident costs continue to rise; medical and workers
compensation costs continue to increase; fuel costs are at historical highs; and taxing authorities continue to raise tax levies
and toll rates. In addition, tractor replacements are required to comply with new EPA standards that will lead to increased
depreciation expenses and reduced fuel efficiency.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The biggest
challenge for the Company and the industry is seated capacity since the market for new drivers has tightened significantly. To
address this trend, the Company has implemented several programs to boost its recruiting efforts and increase the seated fleet
percentage, including increased driver pay packages, new commitments to get drivers home weekly within specified areas of its
network, and new programs designed to improve retention of existing drivers.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Three Months Ended September 30, 2005 and 2004

| | Operating
revenues, including fuel surcharges, were $64.4 million for the quarter ended September 30, 2005, a decrease of 2.0% compared to
$65.7 million for the same quarter of 2004. Fuel surcharges were $8.7 million and $4.8 million for the third quarters of 2005
and 2004, respectively, reflecting the effect of higher fuel costs in the third quarter of 2005 compared to the same period 2004.
Logistics and other revenues were $4.4 million for the quarter ended September 30, 2005 compared to $1.2 million for the same
period 2004 due to increased logistics operations and inter-modal activities. Excluding fuel surcharges, revenues for this
years third quarter decreased 8.5% when compared to the same period 2004.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company
measures revenue before fuel surcharges, or freight revenue, in addition to operating revenue, because management
believes removing this sometimes volatile source of revenue affords a more consistent basis for comparing results of operations
from period to period. Operating revenues per total mile, which includes fuel surcharges, were $1.62 per mile for the third
quarter of 2005 compared to $1.44 for the same quarter of 2004. Freight revenues per total mile, which excludes fuel surcharges,
were $1.39 per mile for the third quarter of 2005, compared to $1.33 for the same quarter of 2004. Operating revenues per loaded
mile, which includes fuel surcharges, were $1.81 for the third quarter of 2005 compared to $1.62 for the same period 2004. Freight
revenues per loaded mile, which excludes fuel surcharges, were $1.55 for the third quarter of 2005 compared to $1.50 for the same
period 2004. These increases are primarily a result of increased line-haul rates, as well as changes in customer mix.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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Table of Contents

| | The following
table reconciles the differences between these non-GAAP financial measures excluding fuel surcharges and the most directly
comparable GAAP measures including fuel surcharges.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                  | 3rd Quarter2005 |  | 3rd Quarter2004
|--------------------------------- | --------------- |  | ---------------
|Operating revenue per total mile  |                 |  | $              
|Fuel surcharge per total mile     |                 |  |                
|                                  |                 |  |                
|Freight revenue per total mile    |                 |  | $              
|                                  |                 |  |                
|Operating revenue per loaded mile |                 |  | $              
|Fuel surcharge per loaded mile    |                 |  |                
|                                  |                 |  |                
|Freight revenue per loaded mile   |                 |  | $              
|                                  |                 |  |                

| | Equipment
utilization, as measured by average operating revenues per tractor in-service per week (including fuel surcharges), was $3,438
during the third quarter of 2005, compared to $3,113 for the same quarter of 2004. Equipment utilization, as measured by average
freight revenues per tractor in-service per week (excluding fuel surcharges), was $2,941 during the third quarter of 2005,
compared to $2,882 for the same quarter of 2004. The increase in equipment utilization reflects increased line-haul rates in the
third quarter of 2005 compared to the same period 2004, a lower percentage of empty (deadhead) miles, offset by lower miles per
tractor per day.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The following
table reconciles the differences between these non-GAAP financial measures excluding fuel surcharges and the most directly
comparable GAAP measures including fuel surcharges.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                       | 3rd Quarter2005 |  | 3rd Quarter2004
|-------------------------------------- | --------------- |  | ---------------
|Operating revenue per tractor per week |                 |  | $              
|Fuel surcharge per tractor per week    |                 |  |                
|                                       |                 |  |                
|Freight revenue per tractor per week   |                 |  | $              
|                                       |                 |  |                

| | At September 30,
2005, the Companys fleet included 1,042 Company-owned tractors and 438 tractors provided by independent contractors compared
to 1,023 Company-owned tractors and 625 tractors provided by independent contractors at September 30, 2004.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Salaries, wages,
and benefits decreased $0.2 million to $19.7 million during the third quarter of 2005 compared to $19.9 million during the third
quarter of 2004. The decrease is primarily a result lower workers compensation expenses and lower total miles driven,
partially offset by an increase in the line-haul rates and accessorial compensation paid to drivers. Salaries, wages, and
benefits, as a percentage of operating revenues, were 30.5% for the third quarter of 2005, compared to 30.3% for the same quarter
of 2004. The percentage increase is due to the above factors as well as a higher percentage of miles driven by employee drivers
when compared to independent contractors (employee transported miles represented 64.1% of total miles in the third quarter of 2005
compared to 58.7% for the same period 2004).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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Table of Contents

| | Fuel, maintenance,
and other expenses increased $1.7 million to $13.1 million during the third quarter of 2005 compared to $11.4 million in the third
quarter of 2004. The increase is primarily due to increased fuel costs due to rising prices. These increases were offset by lower
maintenance, tire and damage costs due to lower miles driven during the third quarter of 2005 when compared to the same period
2004. Fuel, maintenance, and other expenses, as a percentage of operating revenues, were 20.3% for the third quarter of 2005,
compared to 17.3% for the same period 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Purchased
transportation decreased $1.1 million to $18.4 million in the third quarter of 2005 compared to $19.5 million in the third quarter
of 2004. The decrease reflects lower miles driven by independent contractors, offset by an increase in the line-haul and fuel
surcharge rates paid to independent contractors, as well as increased logistics and inter-modal activities. Purchased
transportation, as a percentage of operating revenues, was 28.6% for the third quarter of 2005 compared to 29.7% for the same
quarter of 2004. The percentage decrease is due to the above factors as well as a lower percentage of miles driven by independent
contractors when compared to employee drivers (independent contractor transported miles represented 35.9% of total miles in the
third quarter of 2005 compared to 41.3% for the same period 2004).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revenue equipment
leases increased $0.1 million to $0.4 million in the third quarter of 2005 compared to $0.3 million in the third quarter of 2004.
Revenue equipment leases, as a percentage of operating revenues, were 0.6% for the third quarter of 2005 compared to 0.5% for the
same period 2004, reflecting the Companys use of operating leases for certain tractors acquired in 2002 and 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Depreciation and
amortization decreased $0.4 million to $5.6 million in the third quarter of 2005 compared to $6.0 million in the third quarter of
2004. The decrease is a result of fewer trailers in 2005 due to a reduction in the fleet. Depreciation and amortization, as a
percentage of operating revenues, was 8.7% of operating revenues for the third quarter of 2005 compared to 9.1% for the same
period 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Insurance, claims
and damage expense decreased $1.9 million to $2.0 million in the third quarter of 2005 compared to $3.9 million in the third
quarter of 2004. Insurance, claims and damage expense, as a percentage of operating revenues, was 3.1% for the third quarter of
2005 compared to 6.0% for the same quarter of 2004. The decrease is a result of lower accident frequency and better claims
experience during the third quarter of 2005 when compared to the same period 2004. In addition, the Company experienced several
severe accidents during the third quarter of 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Taxes and licenses
expense remained at $1.1 million in both the third quarter of 2005 and the same period 2004. Although the Companys overall
fleet is smaller in 2005, the expense remains consistent due to increased fees and assessments levied by taxing authorities. Taxes
and licenses, as a percentage of operating revenues, was 1.7% for the third quarter of 2005 and the same period 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Communication
expense decreased $0.1 million to $0.3 million in the third quarter of 2005 compared to $0.4 million for the same period 2004. The
decrease is a result of lower satellite tracking fees due to a smaller overall fleet in 2005. Communication expense, as a
percentage of operating revenues, was 0.5% for the third quarter of 2005 compared to 0.7 % for the same period 2004.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Other general and
administrative expense increased $0.5 million to $2.8 million in the third quarter of 2005 compared to $2.3 million in the third
quarter of 2004. The increased general and administrative expenses primarily include driver hiring and recruiting expenses, as
well as consulting and professional fees of approximately $0.2 million related to the definitive merger agreement to be acquired
by a private equity firm. Other general and administrative expense, as a percentage of operating revenues, was 4.4% in the third
quarter 2005 compared to 3.6% for the same period 2004.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During the third
quarter of 2005, the Company sold a maintenance facility located in Garland, Texas for net cash proceeds of $2.2 million and
recorded a gain on the sale of the property of $0.3 million.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As a result of the
items discussed above, the Companys operating ratio (operating expenses as a percentage of operating revenues) was 98.1% for
the third quarter of 2005 compared to 98.8% for the same period 2004.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net interest
expense decreased $0.2 million to $0.6 million in the third quarter of 2005 compared to $0.8 million for the same period 2004. Net
interest expense, as a percentage of operating revenues, was 0.9% for the third quarter of 2005 compared to 1.2% for the same
period 2004. The decrease primarily reflects lower average debt balances during the third quarter of 2005 compared to the same
period 2004, in addition to increased interest income related to interest earned on the Companys lease to own program.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The effective tax
rate was 33.2% for the third quarter of 2005 compared to 18.2% for the same period 2004. The effective rate for the third quarter
of 2005 was lower than statutory rates due to an adjustment during the third quarter primarily due to the resolution of certain
tax issues for which liabilities had previously been established. The effective rate in the third quarter 2005 is higher than the
same period 2004 due to the above and is subject to additional volatility as the Company is close to break-even for the quarter
due to the impact of permanent and temporary tax timing differences.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net earnings were
$433,000 for the third quarter of 2005 compared to net earnings of $36,000 for the same quarter of 2004.
| | --------------------------------------------------------------------------------------------------------------------------

# Nine Months Ended September 30, 2005 and 2004

| | Operating
revenues, including fuel surcharges, were $188.6 million for the nine months ended September 30, 2005, a decrease of 2.3% compared
to $193.1 million for the same period 2004. Fuel surcharges were $22.3 million and $11.8 million, for the first nine months of
2005 and 2004, respectively, reflecting the effect of higher fuel costs in 2005. Logistics and other revenues were $10.1 million
for the nine-month period ended September 30, 2005 compared to $2.5 million for the same period 2004 due to increased
logistics operations and inter-modal activities. Excluding fuel surcharges, revenues decreased 8.3% when compared to the same
period 2004.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company
measures revenue excluding fuel surcharges, or freight revenue, in addition to operating revenue, because management
believes removing this sometimes volatile source of revenue affords a more consistent basis for comparing results of operations
from period to period. Operating revenues per total mile, which includes fuel surcharges, were $1.57 per mile for the first nine
months of 2005, compared to $1.41 for the same period 2004. Freight revenues per total mile, which excludes fuel surcharges, were
$1.37 per mile for the first nine months of 2005, compared to $1.32 for the same period 2004. Operating revenues per loaded mile,
which includes fuel surcharges, were $1.76 for the first nine months of 2005 compared to $1.58 for the same period 2004. Freight
revenues per loaded mile, which excludes fuel surcharges, were $1.54 for the first nine months of 2005 compared to $1.48 for the
same period 2004. These increases are primarily a result of increased line-haul rates, as well as changes in customer mix.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | The
following table reconciles the differences between these non-GAAP financial measures
excluding fuel surcharges and the most directly comparable GAAP measures including fuel
surcharges.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                  | 2005 |  | 2004
|--------------------------------- | ---- |  | ----
|Operating revenue per total mile  |      |  | $   
|Fuel surcharge per total mile     |      |  |     
|                                  |      |  |     
|Freight revenue per total mile    |      |  | $   
|                                  |      |  |     
|                                 
|Operating revenue per loaded mile |      |  | $   
|Fuel surcharge per loaded mile    |      |  |     
|                                  |      |  |     
|Freight revenue per loaded mile   |      |  | $   
|                                  |      |  |     

| | Equipment
utilization, as measured by average operating revenues per tractor in-service per week (including fuel surcharges) was $3,319
during the first nine months of 2005 compared to $3,053 for the same period 2004. Equipment utilization, as measured by average
freight revenues per tractor in-service per week (excluding fuel surcharges), was $2,906 during the first nine months of 2005
compared to $2,865 for the same period 2004. The improvement in equipment utilization in 2005 reflects increased line-haul rates
offset by a decrease in miles per tractor per day and a slight increase in empty (deadhead) miles.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The following
table reconciles the differences between these non-GAAP financial measures excluding fuel surcharges and the most directly
comparable GAAP measures including fuel surcharges.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                       | 2005 |  | 2004
|-------------------------------------- | ---- |  | ----
|Operating revenue per tractor per week |      |  | $   
|Fuel surcharge per tractor per week    |      |  |     
|                                       |      |  |     
|Freight revenue per tractor per week   |      |  | $   
|                                       |      |  |     

| | Salaries, wages,
and benefits increased $0.6 million to $58.0 million for the first nine months of 2005 compared to $57.4 million for the same
period 2004. The increase in 2005 is primarily a result of an increase in the line-haul rates and accessorial compensation paid to
drivers, offset by lower total miles driven and lower workers compensation expenses. Salaries, wages, and benefits, as a
percentage of operating revenues, were 30.7% for the first nine months of 2005 compared to 29.7% for the same period 2004. The
percentage increase is due to the above factors as well as a higher proportion of miles driven by employee drivers when compared
to independent contractors (employee transported miles represented 62.6% of total miles in the first nine months of 2005 compared
to 56.4% of total miles in the same period 2004).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fuel, maintenance,
and other expenses increased $5.4 million to $36.4 million during the first nine months of 2005 compared to $31.0 million for the
same period 2004. The increase in 2005 is primarily due to increased fuel costs due to rising prices. These increases were offset
by lower maintenance, tire and damage costs due to lower miles driven during the first nine months of 2005 when compared to the
same period 2004. Fuel, maintenance, and other expenses, as a percentage of operating revenues, were 19.3% for the first nine
months of 2005, compared to 16.1% for the same period 2004.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Purchased
transportation decreased $5.9 million to $54.4 million during the first nine months of 2005 compared to $60.3 million for the same
period 2004. The decrease in 2005 reflects lower miles driven by independent contractors, offset by an increase in the line-haul
and fuel surcharge rates paid to independent contractors, as well as increased logistics and inter-modal activities. Purchased
transportation, as a percentage of operating revenues, was 28.8% for the first nine months of 2005 compared to 31.2% for the same
period 2004. The percentage decrease is due to the above factors as well as a lower proportion of miles driven by independent
contractors when compared to employee drivers (independent contractor transported miles represented 37.4% of total miles in the
first nine months of 2005 compared to 43.6% of total miles in the same period 2004).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revenue equipment
leases increased $0.3 million to $1.2 million during the first nine months of 2005 compared to $0.9 million for the same period
2004. Revenue equipment leases, as a percentage of operating revenues, were 0.6% for the first nine months of 2005 compared to
0.5% for the same period 2004, reflecting the Companys use of operating leases for certain tractors acquired during 2002 and
2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Depreciation and
amortization decreased $0.9 million to $16.8 million for the first nine months of 2005 compared to $17.7 million for the same
period 2004. The decrease is a result of fewer trailers in 2005 due to a reduction in the fleet. Depreciation and amortization, as
a percentage of operating revenues, was 8.9% of operating revenues for the first nine months of 2005 compared to 9.2% for the same
period 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Insurance, claims
and damage expense decreased $3.6 million to $6.2 million for the first nine months of 2005 compared to $9.8 million for the same
period 2004. Insurance, claims and damage expense, as a percentage of operating revenues, was 3.3% for the first nine months of
2005 compared to 5.1% for the same period 2004. The decrease is primarily a result of lower accident frequency and better claims
experience in 2005 when compared to the same period in 2004. In addition, the Company experienced several severe accidents during
2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Taxes and licenses
expense was $3.4 million for the first nine months of both 2005 and 2004. Although the Companys overall fleet is smaller in
2005, the expense remains consistent due to increased fees and assessments levied by taxing authorities. Taxes and licenses
expense, as a percentage of operating revenues, was 1.8% for both 2005 and 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Communication
expense decreased $0.1 million to $1.2 million for the first nine months of 2005 compared to $1.3 million for the same period
2004. The decrease is a result of lower satellite tracking fees due to a smaller overall fleet in 2005. Communication expense, as
a percentage of operating revenues, was 0.6% for the first nine months of 2005 compared to 0.7% for the same period 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Other general and
administrative expense increased $0.6 million to $7.8 million for the first nine months 2005 compared to $7.2 million for the same
period 2004. The increased general and administrative expenses primarily include driver hiring and recruiting expenses, as well as
consulting and professional fees of approximately $0.3 million related to the definitive merger agreement to be acquired by a
private equity firm. Other general and administrative expense, as a percentage of operating revenues, was 4.1% for the first nine
months 2005 compared to 3.7% for the same period 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | On April 9, 2004,
the Company signed a sub-lease agreement to rent 9,000 square feet of its headquarters facility at a rental rate that is less than
the rental rate paid by the Company. Accordingly, the Company recorded a pre-tax impairment charge related to this sub-lease
agreement of $190,000 in the second quarter of 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Gain on the
disposition of equipment was $0.3 million for the first nine months of 2005 compared to a gain of $22,000 for the same period
2004. During the third quarter of 2005, the Company sold a maintenance facility located in Garland, Texas for net cash proceeds of
$2.2 million and recorded a gain on the sale of the property of $0.3 million.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As a result of the
items discussed above, the Companys operating ratio (operating expenses as a percentage of operating revenues) was 98.1% for
the first nine months of 2005 compared to 98.0% for the same period 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net interest
expense decreased $0.5 million to $1.9 million for the first nine months of 2005 compared to $2.4 million for the same period
2004. Net interest expense, as a percentage of operating revenues, was 1.0% for the first nine months of 2005 compared to 1.2% for
the same period 2004. The decrease primarily reflects lower average debt balances in 2005, in addition to increased interest
income related to interest earned on the Companys lease to own program.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The effective tax
rate was 37.2% for the first nine months of 2005 compared to 38.8% for the same period 2004. The effective rate was lower for the
first nine months of 2005 compared to the same period 2004 primarily due to the resolution of certain tax issues for which
liabilities had previously been established.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net earnings were
$1.0 million, or 0.6% of operating revenues, for the first nine months of 2005 compared to net earnings of $0.9 million, or 0.5%
of operating revenues, for the same period 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Liquidity and Capital Resources

| | Cash and cash
equivalents were $2.2 million at September 30, 2005, compared to $3.7 million at December 31, 2004. Net cash provided by operating
activities for the first nine months of 2005 was $17.7 million compared to $24.9 million provided for the same period 2004. The
net change in operating assets and liabilities provided cash of $1.3 million during the first nine months of 2005 and provided
cash of $6.3 million during the same period 2004. The primary changes in operating assets and liabilities relate to increased
other receivables and other assets related to the Companys new lease to own program in 2005, and increased accounts payable
primarily due to accruals for new revenue equipment received but not yet financed on a long-term basis.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Investing
activities for the first nine months of 2005 consumed net cash of $18.2 million compared to $13.7 million net cash consumed by
investing activities in the same period 2004. Gross capital expenditures were $29.8 million in the first nine months of 2005
primarily related to the acquisition of 151 replacement tractors and 670 trailers. Gross capital expenditures were $17.8 million
in the first nine months of 2004 primarily related to the acquisition of 90 replacement tractors and 399 trailers. Proceeds from
the disposition of property and equipment for the first nine months of 2005 and 2004 were $11.6 million and $4.2 million,
respectively, related to assets retired when the new equipment was purchased and the sale of trailers to reduce overall trailer
fleet size.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Financing
activities for the first nine months of 2005 consumed $0.9 million compared to $8.2 million consumed for the first nine months of
2004. Net cash consumed for the first nine months of 2005 included $19.2 million for repayments of long-term debt, and $17.5
million from proceeds from the issuance of new long-term debt associated with new revenue equipment. Net cash consumed for the
first nine months of 2004 included $16.0 million for repayments of long-term debt, $12.1 million from proceeds from the issuance
of new long-term debt associated with new revenue equipment, and $4.5 million for the repurchase and retirement of common stock.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In 1997, the Board
of Directors approved repurchasing up to 350,000 shares of the Companys common stock. In 2004, the Board of Directors
granted approval to repurchase an additional 1,000,000 shares of the Companys common stock. As of December 31, 2004, the
Company had repurchased 855,400 shares of its own common stock, leaving 494,600 shares available for repurchase under this
combined authority. No common stock shares have been repurchased in 2005.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Working capital
was negative $7.3 million at September 30, 2005, compared to negative $7.9 million at December 31, 2004. The Company relies
primarily on its operating cash flows and available borrowings under its credit facility to satisfy its short-term capital and
debt-service requirements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company has a
credit agreement which expires on May 4, 2007 for a secured credit facility with maximum combined borrowings and letters of credit
of $30.0 million at September 30, 2005. Amounts actually available under the credit facility are limited by the Companys
accounts receivable and unencumbered revenue equipment. The credit facility is used to meet working capital needs, purchase
revenue equipment and other assets, and satisfy letter of credit requirements associated with the Companys self-insured
retention arrangements. At September 30, 2005, there were no outstanding borrowings on the line and there were outstanding letters
of credit of $5.9 million supported by the line. The Company was in compliance with the financial covenants of the credit
facility. At September 30, 2005, the Company had additional amounts available under its credit facility of $19.2 million. The
Company expects to continue to fund its liquidity needs and anticipated capital expenditures with cash flows from operations, the
credit facility, and other financing arrangements related to revenue equipment purchases.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Off-Balance Sheet Arrangements and Contractual Obligations

| | It is not the
Companys usual business practice to enter into off-balance sheet arrangements, except for off-balance sheet arrangements
related to operating lease commitments and letters of credit for self-insured workers compensation reserves disclosed in the
table of contractual obligations below. While it is not the Companys normal policy to issue guarantees to third parties, the
Company entered into lease arrangements in 2002 for revenue equipment that are classified as operating leases. The lease
agreements are for terms of 48 months and contain TRAC (terminal rental adjustment clause) provisions, which require the Company
to guarantee a termination value as a percentage of the original cost of the leased equipment at the lease termination date. The
maximum potential amount the Company could be required to pay under the guarantees is $1.1 million.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Table of Contents

| | The following
tables set forth the Companys contractual obligations as of September 30, 2005:
| | ----------------------------------------------------------------------------------------------

Payments Due by Period
(In thousands)

|Contractual Obligations                    | Total |  | Less thanone year |        | 1  3Years |   | 3  5Years |  | More than5 years
|------------------------------------------ | ----- |  | ----------------- | ------ | ---------- | - | ---------- |  | ----------------
|Long-term debt                             |       |  |                   | 42,386 |            | $ | 8,836      |  | $               
|Interest on long-term debt                 |       |  |                   | 5,198  |            |   | 1,932      |  |                 
|Capital leases                             |       |  |                   | 4,962  |            |   | 4,962      |  |                 
|Interest on capital leases                 |       |  |                   | 180    |            |   | 180        |  |                 
|Purchase Obligations for Revenue Equipment |       |  |                   | 19,620 |            |   | 19,620     |  |                 
|Operating leases                           |       |  |                   | 15,767 |            |   | 3,572      |  |                 
|Letters of credit                          |       |  |                   | 5,910  |            |   | 5,910      |  |                 
|Guarantees                                 |       |  |                   | 1,050  |            |   | 1,050      |  |                 
|                                          
|                                           |       |  |                   |        |            |   |            |  |                 
|Total Obligations                          |       |  | $                 | 95,073 |            | $ | 46,062     |  | $               
|                                           |       |  |                   |        |            |   |            |  |                 

# Forward-looking Statements

| | Statements
included in this MD&A, elsewhere in this report, in the Companys Annual Report on Form 10-K, in future filings by the
Company with the SEC, in the Companys press releases, and in oral statements made with the approval of an authorized
executive officer which are not historical or current facts, are forward-looking statements made pursuant to safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only
as of the date made. The following important factors, among other things, in some cases have affected and in the future could
affect the Companys actual results and could cause the Companys actual financial performance to differ materially from
that expressed in any forward-looking statement: (1) Transport America may not be able to complete the proposed merger on the
proposed terms or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder
approval, the failure of financing or the failure to satisfy the other closing conditions, (2) the highly competitive conditions
that currently exist in the Companys market and the Companys ability to compete, (3) the Companys ability to
recruit, train, and retain qualified drivers, (4) increases in fuel prices, and the Companys ability to recover these costs
from its customers, (5) the impact of environmental standards and regulations on new revenue equipment, (6) changes in
governmental regulations applicable to the Companys operations, including hours of service regulations (7) adverse weather
conditions, (8) accidents, (9) the market for used revenue equipment, (10) changes in interest rates, (11) the cost of liability
insurance coverage, and (12) downturns in general economic conditions affecting the Company and its customers. The foregoing list
should not be construed as exhaustive, and the Company disclaims any obligation subsequently to revise or update any previously
made forward-looking statements. Unanticipated events are likely to occur.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# New Accounting Pronouncements to be adopted

| | In December 2004,
the FASB issued SFAS No. 123R Share based payment which is a revision to SFAS No. 123 Accounting for Stock Based
Compensation. The provisions of this statement shall be effective for annual periods beginning after September 15, 2005.
This new accounting pronouncement will require the Company to recognize in the income statement the grant-date fair value of
stock-based compensation issued to employees. The Company currently accounts for stock-based compensation 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 currently reflected in net income, but the Company does
disclose in its footnotes the effect on net income and earnings per share if the Company had applied the fair value recognition
provisions of Statement No. 123. The Company is still evaluating the ultimate financial statement impact as it relates to
Statement No. 123R, however, it does not currently believe the impact will be significantly different from the amounts currently
disclosed in the notes to the financial statements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 3.    Quantitative and QualitativeDisclosures about Market Risk

| | Interest Rate Risk
| | ------------------

| | The Company is
exposed to certain market risks with its $30.0 million credit agreement, of which $0 was outstanding at September 30, 2005. The
agreement bears interest at a variable rate, which was 7.25% at September 30, 2005. Consequently, the Company is exposed to the
risk of greater borrowing costs if interest rates increase.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Commodity Price Risk
| | --------------------

| | The price and
availability of diesel fuel are subject to fluctuations due to changes in the level of global oil production, seasonality,
weather, and other market factors. Historically, the Company has been able to recover a majority of fuel price increases from
customers in the form of fuel surcharges. The Company cannot predict the extent to which high fuel price levels will occur in the
future or the extent to which fuel surcharges could be collected to offset such increases. As of September 30, 2005, the Company
had no derivative financial instruments to reduce its exposure to fuel price fluctuations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 4.    Controls and Procedures

| | The Companys
management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness
of the design and operation of the Companys disclosure controls and procedures pursuant to Rule 13a-15 under the Securities
Exchange Act of 1934 (the 1934 Act) as of the end of the period covered by this quarterly report. Based on that
evaluation, the Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure
controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports it files
or submits under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SECs
rules and forms.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There have been no
changes in internal control over financial reporting during the quarter ended September 30, 2005 that have materially affected, or
are reasonably likely to materially affect, the Companys internal control over financial reporting.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# PART II   OTHER INFORMATION

Item 6.    Exhibits

| |  | ExhibitNumber |  | Description
| |  | ------------- |  | -----------

| |  | 3.1 |  | Articles of Incorporation (incorporated by reference to Exhibit
3.1 to the Companys Registration Statement on Form S-1 (File No. 33-84140) as declared effective by the Commission on
November 3, 1994 (the 1994 S-1)).
| |  | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3.2 |  | Bylaws (incorporated by reference to Exhibit 3.2 to the 1994 S-1).
| |  | --- |  | ------------------------------------------------------------------

| |  | 4.1 |  | Rights Agreement by and between the Company and LaSalle Bank
National Association dated February 25, 1997 (originally entered into between the Company and Wells Fargo Bank, N.A. (formerly
Norwest Bank Minnesota, N.A.)) (incorporated by reference to Exhibit 1 to the Companys Registration Statement on Form 8-A,
as amended, filed with the SEC on February 27, 1997; to Exhibit 1 to the Companys Registration Statement on Form 8-A/A,
filed with the SEC on June 29, 1998; and to Exhibit 1 to the Companys Registration Statement on Form 8-A/A, filed with the
SEC on January 21, 2000; to Exhibit 1 to the Companys Registration Statement on Form 8-A/A, filed with the SEC on August 1,
2002; to Exhibit No. 1 to the Companys Registration Statement on Form 8-A/A, filed with the SEC on July 22, 2004; and to
Exhibit No. 4.1 to the Companys Registration Statement on Form 8-A/A, filed with the SEC on October 27, 2005).
| |  | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 31.1 |  | Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350).
| |  | ---- |  | ---------------------------------------------------------------------------------------------------------------------

| |  | 31.2 |  | Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350).
| |  | ---- |  | ---------------------------------------------------------------------------------------------------------------------

| |  | 32.1 |  | Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350).
| |  | ---- |  | ---------------------------------------------------------------------------------------------------------------------

| |  | 32.2 |  | Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350).
| |  | ---- |  | ---------------------------------------------------------------------------------------------------------------------

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# SIGNATURES

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

|      |                  | TRANSPORT CORPORATION OF AMERICA, INC.                                                                         
|----- | ---------------- | ---------------------------------------------------------------------------------------------------------------
|     
|      |                  |                                                                                                                
|Date: | November 4, 2005 | /s/   MICHAEL J. PAXTON                                                                                        
|      |                  |                                                                                                                
|      |                  | Michael J. PaxtonChairman, President and Chief Executive Officer(Principal Executive Officer)                  
|     
|      |                  | /s/   KEITH R. KLEIN                                                                                           
|      |                  |                                                                                                                
|      |                  | Keith R. KleinChief Financial Officer and Chief Information Officer(Principal Financial and Accounting Officer)

21

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