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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

|X|      Annual  report  pursuant  to  Section  13 or  15(d)  of the  Securities
         Exchange Act of 1934 for the fiscal year ended December 31, 1997 or

| |      Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934.


                                 PST VANS, INC.
                                 --------------
             (Exact name of registrant as specified in its charter)


          Utah                           0-25506                 87-0411704
          ----                           -------                 ----------
(State or other jurisdiction      (Commission File No.)         (IRS Employer
    of incorporation)                                        Identification No.)

                              1901 West 2100 South
                           Salt Lake City, Utah 84119
                           --------------------------
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (801) 975-2500

         Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                      ----

         Securities registered pursuant to Section 12(g) of the Act:

                                 Title of Class
                                 --------------
                          Common Stock, $.001 Par Value

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X|  No | |

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  Registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. | |

         The aggregate  market value of the Common Stock held by  non-affiliates
of the Registrant,  based upon the closing sale price of the Common Stock on the
NASDAQ National Market System on March 24, 1998, was approximately  $12,000,000.
Shares of Common  Stock held by each officer and director and by each person who
may be deemed to be an affiliate have been excluded.

         As of March 24, 1998,  the  Registrant  had 4,253,527  shares of Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         The  Registrant's  definitive  Proxy  Statement  relating to the Annual
Meeting of  Shareholders  to be filed pursuant to Regulation 14A is incorporated
by reference in Part III of this report.
--------------------------------------------------------------------------------


                                                         

<PAGE>


<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

<S>                                                                                                        <C>
PART I     ..............................................................................................  1

Item 1.    Business......................................................................................  1
           --------

Item 2.    Properties....................................................................................  7
           ----------

Item 3.    Legal Proceedings.............................................................................  7
           -----------------

Item 4.    Submission of Matters to a Vote of Security Holders...........................................  7
           ---------------------------------------------------

PART II    ............................................................................................... 9

Item 5.    Market for Registrant's Common Stock and Related Shareholder Matters........................... 9
           --------------------------------------------------------------------

Item 6.    Selected Financial Data....................................................................... 10
           -----------------------

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations......... 12
           -------------------------------------------------------------------------------------

Item 8.    Financial Statements and Supplementary Data................................................... 17
           -------------------------------------------

Item 9.    Changes and Disagreements with Accountants on Accounting and Financial Disclosure............. 17
           ---------------------------------------------------------------------------------

PART III   .............................................................................................. 18

Item 10, 11, 12 and 13................................................................................... 18

PART IV    .............................................................................................. 19

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K............................... 19
           ---------------------------------------------------------------

FINANCIAL STATEMENTS..................................................................................... F-1
</TABLE>


                                        i

<PAGE>



Information  contained  in this  Report  contains  "forward-looking  statements"
within the  meaning of the  Private  Securities  Litigation  Reform Act of 1995,
which can be  identified  by the use of  forward-  looking  terminology  such as
"may", "will", "should",  "expect",  "anticipate",  "estimate", or "continue" or
the negative  thereof,  or other variations  thereon or comparable  terminology.
These  forward-looking  statements  are subject to risk and  uncertainties  that
include, but are not limited to, those identified in this report, described from
time to time in the Company's other Securities and Exchange  Commission filings,
or discussed in the Company's press releases. Actual results may vary materially
from expectations.


                                     PART I

Item 1.  Business.

         General

         PST Vans, Inc. is a truckload  carrier focused on serving three markets
in  the  United  States:  transcontinental,   intrawest  and  midwest-southeast.
Management  believes its three primary  operating areas complement each other to
create a network which  enhances  equipment  utilization  and marketing of PST's
truckload carrier services.  Approximately 63% of the Company's  revenues during
1997 was from  transcontinental  traffic lanes with an average length of haul of
approximately  1,600  miles.  The  balance  of  revenues  was  generated  in the
intrawest and midwest-southeast  traffic lanes with an average length of haul of
approximately 750 miles. The Company transports a wide variety of freight,  much
of  which  is  time-sensitive,   including  paper  products,   retail  products,
non-perishable food products,  tires and electronic  equipment.  The Company was
incorporated in Utah in 1984 and its executive  offices are located at 1901 West
2100 South, Salt Lake City, Utah 84119.

         The  Company  operates  exclusively  a fleet  of  standardized,  modern
tractors and 53-foot dry van trailers  and to focuses its  marketing  efforts on
serving as a core carrier for high volume,  service-sensitive  customers.  Major
shippers  continue to reduce the number of authorized  carriers they utilize and
are deciding to establish  service-based,  long-term  relationships with a small
group of preferred  partners or "core carriers" who can meet the service demands
required  by  these  shippers,   including  quick  response  times,  meeting  of
just-in-time  inventory  scheduling  needs,  on-time  pick up and  delivery  and
real-time load monitoring. The Company attempts to meet these needs by providing
a high  level  of  service  to  its  customers  including  on-time  pick  up and
appointment  deliveries,  a modern  fleet of  equipment  that  enhances  on-time
deliveries, a fleet of 53-foot dry van trailers capable of handling high volumes
and high weight  shipments and advanced  information  capabilities  that provide
customers  with access to  information  concerning  the  location  and status of
shipments.

         The  Company  maintained  its fleet size  during  1997 at an average of
approximately 1,150 tractors (including  independent  contractors).  In December
1997, the Company reduced its fleet size by  approximately  6% to 1,077 tractors
due to the  maturity of operating  leases on certain  tractors.  During  January
1998, the Company further reduced its fleet size to  approximately  977 tractors
with the  maturity of other  operating  leases.  The Company  has  replaced  the
tractors that were under operating  leases with independent  contractors  during
February  and  March  of  1998  and  believes  the  fleet  can be  increased  by
approximately  10%  during the  remainder  of 1998 with  additional  independent
contractors,  as market conditions  support.  Company  management  believes that
utilizing independent  contractors instead of Company-owned  tractors allows the
Company to expand without using Company  capital  resources.  Using  independent
contractors  also gives the Company  greater  flexibility  to reduce  fleet size
should business demand decrease in the future.

         Operations

         General. The Company operates a standardized,  modern fleet of tractors
and  53-foot  dry van  trailers  in its  primary  operating  areas.  The Company
operates  its fleet with  driver  managers,  logistics  managers,  and  customer
service  representatives  who work from the Company's  operations center in Salt
Lake City, Utah. The Company consolidated its Atlanta operations center into its
Salt Lake City  facility in the fourth  quarter of 1996 and the first quarter of
1997.

                                        1

<PAGE>



This was  done in  order  to have  more  cohesive  management  of the  Company's
customer service and dispatch functions, and to reduce operating expenses.

         Customer   service   representatives   are  assigned  to  a  particular
geographic  area and work closely with  customers and marketing  personnel.  The
Company's  customer service  representatives  are responsible for soliciting and
accepting  shipments from customers in accordance with prioritized traffic lanes
established  by  management.  Logistics  planners  coordinate  with the customer
service  representatives  to match  customer  needs with  Company  capacity  and
location  of  revenue  equipment.  Once a load has been  accepted  by a customer
service representative,  the logistics planner for the geographic area where the
load originates  coordinates the assignment of the load to a truck with a driver
manager  who is  responsible  for its  proper and  timely  delivery.  The driver
manager  tracks the status and location of that load while in transit.  In order
to enhance productivity among its operations group, the Company has an incentive
plan for its non-driver employees, under which a bonus is distributed monthly to
those employees that meet established performance criteria.

         Technology.   The  Company's  management  information  system  provides
real-time,  on-line management information,  such as daily operating reports and
costing and location of loads,  which assists  management in tracking  shipments
and performing  long-range planning and trend analysis.  Information  concerning
the status and  location of  shipments  in transit,  together  with  information
concerning   unassigned   loads,   is   constantly   updated   on  the   system.
Computer-generated  reports  are used to meet  delivery  schedules,  respond  to
customer  inquiries  concerning  loads in transit and match available  equipment
with  loads.  The system has EDI  capability  to allow  customers  access to the
Company's  computer  data from which  transit and  delivery  information  can be
obtained.  EDI also  offers  customers  the  ability  to place  orders for their
transportation needs directly into the computer system and allows the Company to
bill customers electronically.

         In February 1998, the Company  entered into a five-year  agreement with
The  Sabre  Group to  out-source  the  majority  of its  information  technology
functions,  including  computer and telephone  systems.  In connection  with the
agreement,  the Company will be  transitioning  to new hardware and software for
its financial,  accounting,  operations and other management information systems
during the second quarter of 1998. The  successful  implementation  of these new
systems is crucial to the efficient operation of the Company's  business.  There
can be no  assurance  that the  Company  will  implement  its new  systems in an
efficient  and timely manner or that the new systems will be adequate to support
the Company's operations. Problems with installation or initial operation of the
new  systems  could  cause  substantial  difficulties  in  operations  planning,
financial reporting and management and thus could have a material adverse effect
on the Company's business, financial condition and results of operation.

         PST installed the QUALCOMM on-board communications system on all of its
tractors  during the fourth quarter of 1997.  This system assists the Company in
tracking loads,  servicing customers,  and communicating with drivers.  QUALCOMM
utilizes  satellite  technology  service  to link the  Company's  drivers to its
operations  center.   The  Company  formerly  used  a  cellular-based   on-board
communications system from June 1994 to June 1997.

         The  Company  also uses an  optical  disk  imaging  system  that  scans
documents  such as bills of lading,  driver logs and fuel receipts on to optical
disks.  Management believes that this system substantially reduces clerical time
required to enter and retrieve  documents,  while  enhancing the  utilization of
data.

         Fuel. The Company has  established a nationwide  fuel purchase  program
which  enables the Company's  drivers to purchase  fuel at specified  fuel stops
throughout  the  United  States at volume  discounts.  In order to reduce  PST's
vulnerability  to rapid  price  increases,  the  Company  enters  into  purchase
contracts  with fuel  suppliers from time to time for a portion of its estimated
fuel  requirements  at a guaranteed  price. As of December 31, 1997, the Company
had entered  into  agreements  with fuel  suppliers  under which the Company may
purchase  approximately  18% of its estimated  fuel needs  through  December 31,
1998, at a guaranteed  price.  These  agreements  include an arrangement  with a
national  truckstop  operator to store and pump this fuel at truckstops  located
throughout the United States. The Company also has bulk fuel storage capacity at
one of its  terminals  and its Salt Lake City  operations  center.  The  Company
attempts to offset rapid  increases in fuel prices with fuel  surcharges  to its
customers which are standard in the industry.


                                        2

<PAGE>



         Marketing

         The Company  concentrates  its  marketing  efforts on serving as a core
carrier for high volume,  service-sensitive  customers  with  "driver  friendly"
freight for  transportation  in PST's targeted  traffic  lanes.  The Company has
targeted the  service-sensitive  segment of the truckload market rather than the
segment which uses price as its primary consideration.  The Company transports a
wide  variety  of  freight,  much of which is time  sensitive,  including  paper
products,  non-perishable food products,  retail products,  tires and electronic
products.  The Company's largest 20 customers accounted for approximately 49% of
revenues in 1997, with the largest customer  accounting for  approximately 8% of
revenues.

         The Company  maintains  marketing  offices at its  headquarters in Salt
Lake City.  Senior  management is directly involved in marketing and maintaining
relationships  with customers.  The Company fosters the concept of maintaining a
"transportation  partnership"  with  each  customer  to  respond  to  individual
customer requirements and become a core carrier for service-sensitive customers.
Once a customer  relationship is  established,  the Company's  customer  service
representatives, working from the Company's operations center in Salt Lake City,
regularly contact that customer to solicit additional business on a load-by-load
basis,  particularly  when  equipment  will  be  available  nearby  following  a
completed haul. In addition,  a customer  representative meets at least annually
with each customer at the customer's  place of business.  Each customer  service
representative is assigned a particular  geographic area and works with a driver
manager to monitor  the  overall  transportation  and  service  requirements  of
shippers in the  assigned  area as well as movements  of the  shippers'  freight
within that area. This personal and continuing  customer  contact is designed to
ensure a high level of  customer  satisfaction  and enhance  utilization  of the
Company's equipment.

         Drivers

         The truckload segment of the industry  continues to experience an acute
shortage of employee  drivers and independent  contractors,  particularly in the
longer  haul  segments.  As a result  of the  driver  shortage,  some  truckload
carriers,  including the Company, have been forced to idle tractors from time to
time.  Management has designed a driver  recruitment and retention program which
features:  (i) maintaining a close working relationship with various independent
driver training schools,  (ii) providing a positive  training  experience to all
new drivers,  and (iii)  providing a competitive,  incentive-based  compensation
package and other driver  amenities.  The Company  believes that this program is
effectively  meeting  its  driver  requirements.  However,  because of the acute
shortage of drivers in the  industry,  the Company  believes it is  necessary to
constantly  evaluate its driver  retention and  recruitment  program and to make
changes as necessary in order to improve driver  recruitment and retention,  and
it may be forced to idle tractors from time to time.

         Recruiting.  PST employs full-time  recruiters  located  throughout the
United   States   who   make   recruiting    presentations   at   truck   stops,
Company-sponsored  job fairs and other  locations  frequented  by  drivers.  The
Company also advertises for drivers on television, radio and in print media. The
Company  carefully  screens  all new  driver  applicants  on the  basis of prior
driving and safety  records.  The Company also works  closely  with  independent
driver training schools and community  colleges to recruit and train prospective
drivers.  Two of the independent  driver training schools are conducted in PST's
facilities, one in Salt Lake City and the other in Atlanta. The Company provides
the facilities and equipment while the schools provide the instructors.

         Training. All newly-hired drivers with limited over-the-road experience
must complete the Company's  training program.  The Company's  training program,
which was recently modified,  is intended to provide the trainee with a positive
training  experience,  ease the  driver's  transition  from  driving  school  to
full-time  driving and improve safety.  During the training,  each new driver is
teamed up with an experienced driver trainer to gain  over-the-road  experience.
Upon meeting certain criteria,  the driver may upgrade to a team or solo driver.
For a period  of time,  the  driver is  monitored  as a  trainee  by the  safety
department for service and safety performance.

         All newly-hired drivers, regardless of experience, are required to pass
an  examination  and attend a two day  orientation  program which  includes both
classroom and over-the-road training, emphasizing safety and proper operation of
Company  tractors and trailers.  The orientation  program also trains drivers in
all  aspects  of  the  Company's   operations,   particularly  customer  service
requirements,  fuel  conservation and equipment  maintenance.  In addition,  the
Company  utilizes a training  program for all of its drivers dealing with, among
other safety measures, maintaining a "space cushion" around their vehicle.


                                        3

<PAGE>



         Compensation and Benefits. The Company compensates its drivers based on
miles driven,  including an incentive program based on monthly miles production,
with base pay increasing  with the driver's  length of employment.  Drivers also
participate  in PST's 401(k)  program,  in  Company-sponsored  health,  life and
dental plans and the employee stock purchase plan.

         Driver Retention. Management believes that its competitive compensation
package,  its policy to have each  driver home at least once every 14 days or to
accrue  time off at the rate of one day for each  week on the road and its focus
on "driver  friendly"  freight  have  enhanced the  Company's  ability to retain
drivers.  The Company also provides  drivers with various  amenities,  including
modern,  spacious conventional tractors that are designed for driver comfort and
safety,  the QUALCOMM  communication  system that allows  drivers to communicate
with their  families and the Company's  contract with  truckstop  operators that
allow drivers to use those facilities.  In addition, all drivers are assigned to
a driver  assistant who monitors up to 50 drivers from the Company's  operations
center  and  is  responsible  for  assisting   assigned   drivers  in  resolving
administrative  or  work-related  problems.  Management  also  believes that the
Company's  career  advancement  opportunities  for  drivers,  such as becoming a
driver trainer or an independent contractor, are important to driver retention.

         Independent Contractors

         During the last several  years,  the Company has  utilized  independent
contractors  who,  through  a  contract  with the  Company,  supply  one or more
tractors and drivers for Company use. Independent contractors are compensated on
the  basis of a fixed  rate per mile and are  responsible  for all  expenses  of
operating a tractor,  including wages, benefits, fuel, maintenance,  highway use
taxes and debt service. The contract between the independent  contractor and the
Company generally is terminable by either party upon short notice. The Company's
use of tractors  supplied by independent  contractors was  approximately  21% at
December 31, 1997 and  approximately  36% at March 27, 1998. The Company expects
the number of tractors provided by independent  contractors to increase relative
to the number of Company-operated tractors during 1998. Management believes that
any  company-owned  tractors  that are retired  during 1998 may be replaced with
independent-contractors as future market conditions dictate.

         The Company believes that carefully  selected  independent  contractors
allow the Company to expand its fleet while  minimizing  its capital  investment
and fixed costs,  improving its return on invested capital and reducing the cost
of financing revenue equipment.  Utilizing  independent  contractors also allows
the Company to size its fleet according to the demand for freight  services.  In
addition,  independent  contractors  generally  have a lower  turnover rate than
company  drivers for the industry as a whole because of their ownership of their
equipment.  The ratio of independent  contractors to Company-operated  equipment
varies from time to time based on such  factors as the demand for  freight,  the
cost of obtaining and  operating  new revenue  equipment,  the  availability  of
qualified independent  contractors and the rates being charged by them. By using
independent  contractors,  the  Company  seeks to improve its return on invested
capital and reduce the financing costs associated with owning its own fleet.

         Revenue Equipment

         The Company's  equipment  strategy is to (i) purchase both tractors and
trailers with uniform specifications to reduce parts and maintenance costs, (ii)
keep equipment  covered by  manufacturers'  warranties (to the extent offered by
manufacturers),   and  (iii)  operate  a  fleet  of  only  modern,   comfortable
driver-preferred  tractors and 53-foot dry van trailers.  The average age of the
Company's  tractors was 2.7 years at December 31, 1997  compared to 1.8 years at
December  31,  1996.  The  Company's  current  policy is to replace its tractors
approximately every four years and its trailers approximately every seven years,
and to maintain an approximate 2.2 to one trailer-to-tractor ratio.

         At December 31, 1997,  the Company owned or held  directly  under lease
847 tractors and 2,369 trailers,  all of which were 53-foot long x 102-inch wide
dry vans,  capable of  handling  high  volume  and high  weight  shipments.  The
Company's  trailers are of sheet and post  construction  and can be used to haul
full loads of heavy freight, such as carpet and tires. The following table shows
the model years of the Company's tractors and trailers in service as of December
31, 1997.


                                        4

<PAGE>




                     Model Year                           Tractors    Trailers
                     ----------                           --------    --------
1998................................................             76           0
1997................................................              0           0
1996................................................            290         500
1995 ...............................................            439         500
1994................................................             39         100
1993 ...............................................              0         448
1992 ...............................................              0         149
1991 ...............................................              1         598
1990 and prior .....................................              2          74
                                                         ----------   ---------
Total Company-owned ................................            847       2,369
Total independent contractor .......................            230          --
                                                         ----------   ---------
      Total ........................................          1,077       2,369
                                                         ==========   =========

         The Company fleet consists of 100%  conventional  tractors all equipped
with Detroit Diesel  electronic  engines,  which  management  believes  provides
increased fuel efficiency, performance improvements and reduced maintenance over
conventional  engines. All of the tractors are equipped with air-ride suspension
and other modern  features  designed to enhance  performance and driver comfort.
The Company  currently has no tractor and 450 trailer  production slots reserved
in 1998.

         The Company has a comprehensive  preventative  maintenance  program for
its Company-operated tractors and trailers to improve safety, minimize equipment
downtime and enhance  resale value.  Inspections,  repairs and  maintenance  are
performed on a regular basis at Company facilities.  Additional  maintenance and
repair can be performed at independent  contract  maintenance  facilities in the
Company's  service  territories  when  circumstances  require.  The Company also
obtains manufacturer extended warranties,  including full engine and power train
coverage.

         Safety and Risk Management

         The  Company  is  committed  to  the  safe  operation  of  its  revenue
equipment.  The Company regularly evaluates its safety program and makes changes
in order  to  improve  the safe  operation  of its  equipment.  In order to help
emphasize safe driving, the Company performs on-the-road observations of drivers
and distributes  safety recognition awards to drivers with exemplary driving and
productivity  records.  Driver assistants and dispatchers  regularly communicate
with Company  drivers to promote safety and safe work habits.  In addition,  the
Company's 1998 tractors are equipped with optional safety features such as speed
governors,  daytime running lights, mirrors on each fender that provide improved
views and  turning  horns  that  activate  when the turn  signal on a tractor is
engaged.  The Company is continuing the following safety programs implemented in
1996:  1) all  drivers  are  required to take the Smith  System  Safety  Cushion
course; 2) pass/fail testing criteria for all newly-hired drivers; and 3) prompt
accident  counseling  and  training  for all  drivers  involved  in  preventable
accidents.  The Company has  implemented  a new safety  program in 1997  wherein
approximately  10% of  Company-owned  tractors are equipped with fuel  optimizer
engines  that  govern  speed  between  57 and  64  miles  per  hour.  All  other
Company-owned tractors are governed at 64 miles per hour.

         The Company has an accident  review  committee  that meets on a regular
basis to review accidents, examine trends and implement changes in procedures or
communications  to address safety issues.  The committee also works closely with
drivers  who  have  been   involved  in  accidents  to  improve   their  driving
performance.

         The Company requires prospective drivers to meet higher  qualifications
than those required by the  Department of  Transportation  (the "DOT").  The DOT
requires the Company's drivers to obtain  commercial  drivers' licenses and also
requires that the employer  implement a drug testing  program in accordance with
the DOT  regulations.  The Company's  program includes  pre-employment,  random,
post-accident and post-injury drug testing.

         The primary insurance risks associated with the Company's  business are
bodily injury and property damage,  workers'  compensation claims and cargo loss


                                        5

<PAGE>



and damage.  The Company maintains  insurance against these risks and is subject
to  liability  as a self  insurer to the extent of its  deductible.  The Company
currently  maintains liability insurance coverage for bodily injury and property
damage with a  deductible  of $2,500 per incident  and carries  cargo  insurance
coverage with a $25,000 deductible per incident. The Company also has a $100,000
deductible  for  workers'  compensation  claims  in those  states  that  allow a
deductible. The Company currently maintains a $2,500 deductible per incident for
physical damage to  Company-owned  tractors and is effectively  self insured for
physical damage to its trailers.

         Employees

         As of December 31, 1997, the Company  employed 1,531 persons,  1,269 of
whom were  drivers,  37 were  mechanics and  maintenance  personnel and 225 were
support  personnel,  including  management  and  administration.   None  of  the
Company's  employees is  represented  by a collective  bargaining  unit, and the
Company considers relations with its employees to be good.

         Competition

         The entire trucking industry is highly competitive and fragmented.  PST
competes  primarily with other truckload  carriers and shippers' private fleets,
and,  particularly in the longer haul segments with  intermodal  transportation,
railroads  and  providers  of  second  day  air  freight   service.   Intermodal
transportation  has  increased in recent years as reductions in train crew sizes
and the development of new rail  technologies have reduced the cost and improved
dependability of intermodal shipping.

         Competition for the type of freight transported by PST is based, in the
long term,  primarily  on service and  efficiency  and, to a lesser  degree,  on
freight rates. The Company believes that its principal  competitive  strength is
its ability to consistently provide reliable service to its customers, including
on-time pick ups and deliveries.  Several  truckload  carriers that compete with
PST have substantially greater financial resources, own more equipment and carry
a larger volume of freight than PST.

         Regulation

         The Company is a motor common and contract  carrier and was  previously
regulated  by the  Interstate  Commerce  Commission  ("ICC") and  various  state
agencies.  Effective  as of  December  31,  1995,  the  ICC was  closed  and its
remaining  responsibilities  were  transferred  to the DOT.  The Company has not
realized  any  adverse  impact  as a result  of this  action.  The DOT and state
agencies have broad  powers,  generally  governing  matters such as authority to
engage in motor  carrier  operations,  rates and  charges,  accounting  systems,
certain  mergers,   consolidations   and  acquisitions  and  periodic  financial
reporting.  The Motor Carrier Act of 1980  substantially  increased  competition
among motor carriers and reduced the level of regulation in the industry.

         Motor  carrier  operations  are also  subject  to  safety  requirements
governing  interstate  operations  prescribed by the DOT. Such matters as weight
and  dimension of equipment  are also subject to federal and state  regulations.
The failure of the Company to comply with the rules and  regulations  of the DOT
or state  agencies  could  result  in  substantial  fines or  revocation  of the
Company's  operating  licenses.   The  trucking  industry  is  also  subject  to
regulatory  and  legislative  changes  which can  affect  the  economics  of the
industry by requiring  changes in operating  practices or influencing the demand
for, and the cost of providing services to shippers.

         The Company  currently  has authority to carry freight on an intrastate
basis in 48 states.  The Federal Aviation  Administration  Authorization  Act of
1994 (the FAAA Act) amended  sections of the Interstate  Commerce Act to prevent
states from regulating rates,  routes or service of motor carriers after January
1, 1995.  The FAAA Act did not address state  oversight of motor carrier  safety
and financial responsibility, or state taxation of transportation.

         The  Company  has  underground  storage  tanks for  diesel  fuel at its
facilities in Salt Lake City, Utah and Bowling Green, Kentucky. As a result, the
Company is subject to  regulations  promulgated by the EPA in 1988 governing the
design,  construction  and  operation of  underground  fuel  storage  tanks from
installation  to  closure.  The  Company  believes  all  of  its  tanks  are  in
substantial  compliance with EPA regulations.  The Company's  truckload  carrier
operations  are also  subject  to  other  environmental  laws  and  regulations,
including  laws and  regulations  dealing with the  transportation  of hazardous
materials.  The Company  believes  that it is in  compliance  with all  material


                                        6

<PAGE>



applicable  environmental laws and regulations.  In the event the Company should
fail to comply with applicable  environmental laws and regulations,  the Company
could be subject to substantial fines and/or penalties and to civil and criminal
liability.

         Seasonality

         In the trucking industry, revenues generally show a seasonal pattern as
customers  reduce  shipments  during and after the winter holiday season and its
attendant weather  variations.  Operating expenses also tend to be higher during
the cold weather  months,  primarily  due to poorer fuel  economy and  increased
maintenance costs.


Item 2.  Properties.

         The Company's  executive  offices and operations  center are located in
Salt Lake City,  Utah.  PST owns this  property,  subject to the property  being
pledged to secure a payable in the amount of approximately  $3,000,000 due to an
equipment vendor as of December 31, 1997. This payable was paid and the property
was  released as security on March 16, 1998.  The property has full  maintenance
and  shop  capabilities  with  four  maintenance  bays  for  tractors  and  four
maintenance bays for trailers.  The property also has approximately 15 acres for
tractor and trailer  parking and  contains an office  building of  approximately
36,000 square feet for the Company's  executive  offices and operations  center.
Management  believes that this facility is suitable for PST's present and future
needs.

         The Company also operates terminals in Atlanta, Georgia; Bowling Green,
Kentucky;  Fontana,  California;  Mt.  Vernon,  Texas;  Green  Cove  ,  Florida;
Knoxville,  Tennessee;  and Valdosta,  Georgia.  The Atlanta  terminal  includes
tractor and trailer maintenance facilities, office space and driver lounges. All
of the terminals are used for driver recruiting. The Atlanta facility is located
on   approximately   17  acres.   The  Bowling  Green  terminal  is  located  on
approximately  two acres.  These  properties  are leased for terms  ranging from
month-to-month to five years, with renewal options.  The Company bears the costs
of insurance,  maintenance and repairs, taxes, special assessments and utilities
on  most  of  its  leased  facilities.  The  Company  does  not  anticipate  any
difficulties  renewing  or  continuing  these  leases  or  obtaining  leases  on
replacement or additional  properties,  if necessary.  Management estimates that
its  Salt  Lake  facility  and  its  other   terminals  are  being  utilized  to
approximately 60% to 75% of their capacity.


Item 3.  Legal Proceedings.

         The  Company  is a  party  to  routine  litigation  incidental  to  its
business,  primarily  involving  claims for personal  injury and property damage
incurred in the  transport  of  freight.  Management  does not believe  that any
pending  litigation  will have a  materially  adverse  effect  on the  Company's
financial condition or results of operations.


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

         The following  matters were submitted to a vote of security  holders at
an annual meeting of shareholders held on December 19, 1997, with the results of
the vote as noted:

         (1)      To elect one member of the Board of Directors.

                  Votes for James E Otto - 3,019,893

                  In  addition,  the  following  directors  continued  to  serve
                  following  the  meeting:  Kenneth R.  Norton,  Robert D. Hill,
                  Charles Lynch and James Redfern

         (2)      To  ratify  the   appointment   of  Arthur   Andersen  LLP  as
                  independent  public  accountants  for the year ending December
                  31, 1997.

                  Votes for - 3,036,604
                  Votes against - 44,839
                  Abstentions - 9,000

                                        7

<PAGE>



         A total of  3,090,443  shares were  present at the  meeting,  either in
person or by proxy.









                                        8

<PAGE>



                                     PART II


Item 5.  Market for Registrant's Common Stock and Related Shareholder Matters.

         The  Company's  Common  Stock is listed and traded on The NASDAQ  Stock
Market  (National  Market System) under the symbol  "PSTV." The following  table
sets  forth,  for the  periods  indicated,  the high and low sale prices for the
Company's  Common  Stock,  as reported on The NASDAQ  Stock Market for the years
ended December 31, 1997 and 1996.


                                                         High            Low
                                                         ----            ---
Year Ended December 31, 1997:
     First Quarter...................................   $3.375         $2.438
     Second Quarter..................................    3.750          1.875
     Third Quarter...................................    4.000          3.000
     Fourth Quarter..................................    4.938          3.000


                                                         High            Low
                                                         ----            ---
Year Ended December 31, 1996:
     First Quarter...................................   $4.625         $3.125
     Second Quarter..................................    4.625          3.750
     Third Quarter...................................    4.250          2.875
     Fourth Quarter..................................    3.750          2.375
--------------------------

         The Company did not pay or declare dividends on its Common Stock during
the years ended  December 31, 1996 and 1997. The Company  currently  anticipates
that it will retain all available funds to finance its  operations.  The Company
does not presently intend to pay cash dividends in the foreseeable  future.  The
Company's  revolving  loan  agreements  with The  Bank of New York and  Congress
Financial  Corporation  (Northwest)  prohibit the Company from paying  dividends
without the consent of The Bank of New York and Congress  Financial  Corporation
(Northwest).

         As of March 24, 1998,  the Company had  4,253,527  shares of its Common
Stock  outstanding,  held by 20 shareholders  of record,  which does not include
shareholders whose shares are held in securities position listings.



                                        9

<PAGE>



Item 6.  Selected Financial Data and Operating Data.

         The following selected financial data of the Company for the five years
ended  December  31,  1997,  has  been  derived  from  the  Company's  Financial
Statements  which have been audited by Arthur Andersen LLP,  independent  public
accountants. This selected financial data should be read in conjunction with the
Financial  Statements and accompanying  Notes included elsewhere in this report.
Operating  data has been  derived  from the  Company's  books and  records.  All
amounts are expressed in thousands, except per share amounts and operating data.

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                     1997         1996       1995(5)       1994(5)        1993(5)
                                                  ----------   ----------   ----------    ----------    -----------
<S>                                               <C>          <C>          <C>           <C>           <C>     
Statements of Operations Data:
  Revenues........................................$  143,737    $ 147,419    $ 164,794     $ 136,541      $ 125,591
                                                  ----------    ----------   ----------    ----------     ---------
  Costs and expenses:
    Salaries, wages and benefits..................    44,360       43,848       45,208        35,935         40,693
    Purchased transportation......................    25,578       32,393       41,281        33,842         20,273
    Fuel and fuel taxes...........................    22,533       20,555       21,245        17,615         20,556
    Revenue equipment lease expense...............     7,576        8,022       12,224        14,904         17,991
    Maintenance...................................     8,663        7,491        8,822         8,584          7,078
    Insurance and claims..........................    11,384       11,942        9,315         6,854          6,662
    General supplies and expenses.................     5,930        5,558        5,996         4,364          5,909
    Taxes and licenses............................     2,776        3,309        3,445         2,677          3,360
    Communications and utilities..................     2,802        3,430        3,562         1,870          2,021
    Depreciation and amortization.................    11,911       13,175        8,804         2,078          1,772
    (Gain) loss on sale of equipment..............        13      (1,614)        (151)           302            595
    Amortization of goodwill......................       272          272          272           272            272
                                                  ----------   ----------   ----------    ----------    -----------
        Total costs and expenses..................   143,798      148,381      160,023       129,297        127,182
                                                  ----------   ----------   ----------    ----------    -----------
  Operating income (loss).........................       (61)        (962)       4,771         7,244         (1,591)
                                                  ----------   ----------   ----------    ----------    -----------
  Other income (expense):
    Interest expense..............................    (4,360)      (5,080)      (4,283)       (2,595)        (2,069)
    Reorganization expense items..................        --           --           --          (338)        (2,928)
    Other, net....................................       105          182          147           119            116
                                                  ----------   ----------   ----------    ----------    -----------
  Income (loss) before provision for income
    taxes and extraordinary gains.................    (4,316)      (5,860)         635         4,430         (6,472)
  Provision for income taxes......................        --           --          251           120             36
                                                  ----------   ----------   ----------    ----------    -----------
  Income (loss) before extraordinary gains........    (4,316)      (5,860)         384         4,310         (6,508)
  Extraordinary gains from debt
    restructuring(1)..............................        --           --           --         6,206             --
                                                  ----------   ----------   ----------    ----------    -----------
  Net income (loss)...............................$   (4,316)   $  (5,860)   $     384    $   10,516    $    (6,508)
                                                  ==========    =========    =========    ==========    =========== 
  Net income per common share:
    Income (loss) before extraordinary gain - basi                                      
    and diluted...................................$    (1.02)   $   (1.39)   $     .10    $      1.6(2)
    Extraordinary gain from debt                                                                     
      restructuring - basic and diluted...........        --           --           --          2.38(2)
                                                  ----------    ---------    ---------    ------------ 
    Net income (loss) per common                                                       
      share - basic and diluted...................$    (1.02)   $   (1.39)   $     .10    $     4.04(2)
                                                  ==========    =========    =========    ============ 
  Weighted average shares                                                                            
    outstanding - basic...........................     4.233        4,212        3,950         3,888(2)
                                                  ==========    =========    =========    ============ 
Weighted average shares                                                                              
    outstanding - diluted.........................     4.233        4,212        3,950         3,950(2)
                                                  ==========    =========    =========    ============ 
</TABLE>



                                       10

<PAGE>




<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                              -----------------------------------------------------------------
                                                                 1997         1996       1995(5)       1994(5)        1993(5)
                                                              ----------   ----------   ----------    ----------    -----------
<S>                                                           <C>           <C>           <C>           <C>           <C>      
Operating Data:
  Average revenue per tractor per week.....................   $   2,408     $   2,297     $   2,363     $   2,465     $   2,318
  Average miles per trip ..................................       1,181         1,204         1,133         1,110           944
  Average revenue per total mile...........................   $   1.065     $   1.053     $   1.062     $   1.087     $   1.046
  Empty miles percentage ..................................         8.8%          9.2%          9.0%          7.8%         10.1%
  Average number of tractors during the year:
    Company-operated ......................................         888           915           911           721           820
    Independent contractor ................................         257           322           430           341           218
                                                                    ---           ---           ---           ---           ---
        Total tractors ....................................       1,145         1,237         1,341         1,062         1,038
  Average number of trailers during the year ..............       2,501         2,931         2,713         2,204         2,412
  Pre-tax margin (loss)(3) ................................        (3.0)%        (4.0)%          .4%          3.2%         (5.2)%

Balance Sheet Data:
  Working capital (deficit)................................    $(23,431)    $  (9,157)    $   2,935     $  (8,377)    $  (5,071)
  Total assets ............................................      79,476        90,260       108,882        48,664        37,341
  Long-term and capitalized lease
    obligations, net of current portion(4) ................      14,739        34,894        55,687        17,124         4,181
  Stockholders' equity (deficit) ..........................      17,511        21,772        27,605         5,473       (12,816)
----------------------
</TABLE>

(1)      The Company  recognized an  extraordinary  gain of $6.2 million in 1994
         from reduction of indebtedness  accomplished through the Company's Plan
         of Reorganization.

(2)      Pro  forma  per  share  amounts  in 1994  reflect  cancellation  of all
         previously  outstanding  shares of Common Stock of PST and the issuance
         of shares to the current  shareholders  of the Company  pursuant to the
         Plan of Reorganization as if these transactions had occurred on January
         1, 1994.  The per share  amounts  in 1997,  1996 and 1995  reflect  the
         actual weighted average shares and earnings per share.

(3)      The Company  finances the acquisition of some of its revenue  equipment
         under   operating   leases  rather  than  through  debt   financing  or
         capitalized  leases. As a result, the Company believes that its pre-tax
         margin (loss)  (earnings  (loss) before income taxes and  extraordinary
         gains as a percentage of revenues) is a more appropriate measure of its
         operating  efficiency  than its operating  ratio  (operating  costs and
         expenses as a percentage of revenues).

(4)      Long-term and capitalized lease obligations do not include $9.9 million
         of obligations  under operating leases of revenue equipment at December
         31, 1997.

(5)      From 1989 through 1993,  the Company  incurred  substantial  net losses
         (before  extraordinary  gains).  In June 1993,  after the  Company  was
         unsuccessful in voluntarily  restructuring  its existing  indebtedness,
         the Company filed for protection  under Chapter 11 of the United States
         Bankruptcy  Code in order to improve its capital  structure  and reduce
         its debt service requirements and overall  indebtedness.  The Company's
         Plan of Reorganization was confirmed in February 1994 and significantly
         improved the Company's capital structure by reducing the Company's debt
         and lowering  lease and interest  payments.  In March 1995, the Company
         paid the remaining  balance owing to its unsecured  creditors under the
         Plan of Reorganization  with the exception of a few contested unsecured
         claims.  The Company is still making payment on its priority tax claims
         in accordance with its Plan of Reorganization.




Item 7.  Management's  Discussion  and Analysis of Financial  Condition  and
         Results of Operations.


                                       11

<PAGE>



         Overview

         The trucking industry experienced significant overcapacity in 1995 as a
result of carriers expanding fleets based on very strong customer demand in 1994
coupled with an economic  slowdown in the second half of 1995. This overcapacity
resulted in  significant  downward  pressure on pricing in the  industry  during
1995,  1996,  and the first nine  months of 1997,  and  adversely  affected  the
Company's  operations  which resulted in a lower average rate per mile and lower
equipment  utilization in 1996, 1995 and 1997 compared to 1994, and an operating
loss in 1996 and 1997.

         During the fourth  quarter of 1997,  the  profitability  of the Company
improved significantly.  While the Company traditionally  experiences a stronger
demand for freight  services in the fourth  quarter of each year,  the increased
demand in the fourth  quarter of 1997 combined with better  systems for managing
revenue  equipment  produced an approximate 8% improvement in utilization of the
Company's  revenue  equipment  (as measured by miles per tractor per day) in the
three  months  ended  December  31, 1997 as  compared  to the nine months  ended
September 30, 1997. In addition,  insurance and claims expense reduced from 8.5%
of revenue  for the nine month ended  September  30, 1997 to 6.3% of revenue for
the three months  ended  December  31,  1997.  The fourth  quarter net income of
approximately  $511,000 was the Company' first significantly  profitable quarter
in over 2 years.

         The Company  finances the acquisition of some of its revenue  equipment
through operating leases.  Under generally accepted accounting  principles,  the
interest  component  of an operating  lease is not treated as interest  expense.
Because of the Company's use of operating leases, the Company's  operating ratio
(operating  costs and  expenses as a  percentage  of revenues) is higher than it
would be if it  utilized  only debt  and/or  capital  leases.  As a result,  the
Company  believes  that its pre-tax  margin  (earnings  before  income taxes and
extraordinary  gains as a percentage of revenues) is a more appropriate  measure
of its operating efficiency than its operating ratio.

         At December 31, 1997, the Company  operated a revenue  equipment  fleet
comprised of 1,077 tractors,  including 230 operated by independent contractors,
and  2,369  trailers.  Because  of the  current  increased  demand  for  freight
services, the Company intends to increase the number of independent  contractors
to  approximately  350 and maintain the Company  tractors at  approximately  850
during 1998.

         In February 1998, the Company  entered into a five-year  agreement with
The  Sabre  Group to  out-source  the  majority  of its  information  technology
functions,  including  computer and telephone  systems.  In connection  with the
agreement,  the Company will be  transitioning  to new hardware and software for
its financial,  accounting,  operations and other management information systems
during the second quarter of 1998. The  successful  implementation  of these new
systems is crucial to the efficient operation of the Company's  business.  There
can be no  assurance  that the  Company  will  implement  its new  systems in an
efficient  and timely manner or that the new systems will be adequate to support
the Company's operations. Problems with installation or initial operation of the
new  systems  could  cause  substantial  difficulties  in  operations  planning,
financial reporting and management and thus could have a material adverse effect
on the Company's business, financial condition and results of operation.

         The  Company  is in  the  process  of  identifying  anticipated  costs,
problems  and  uncertainties  associated  with  making  the  Company's  software
applications  Year 2000  compliant.  The  Sabre  Group  has  certified  that the
software  they will be providing to the Company is Year 2000 ready.  The Company
expects to resolve  Year 2000 issues with other  internal-use  software  through
planned  replacement or upgrades.  Although  management does not anticipate Year
2000  issues to have a  material  affect on its  business  or future  results of
operations,  there can be no assurance that there will not be  interruptions  of
operations or other limitations of system functionality or that the Company will
not incur significant costs to avoid such interruptions or limitations.

                                                        12

<PAGE>



         The following  table sets forth the percentage  relationship of expense
items to revenues for the years indicated.

<TABLE>
<CAPTION>

                                                                     Percentage of Revenues
                                                                   ---------------------------
                                                                     Year Ended December 31,
                                                                    1997      1996       1995
                                                                   ------    -------    ------
<S>                                                                  <C>        <C>       <C> 
Revenues:                                                           100.0%     100.0%    100.0%
Costs and expenses:
  Salaries, wages and benefits.....................................  30.9       29.7      27.4
  Purchased transportation.........................................  17.8       22.0      25.0
  Fuel and fuel taxes..............................................  15.7       13.9      12.9
  Revenue equipment lease expense..................................   5.3        5.4       7.4
  Maintenance......................................................   6.0        5.1       5.4
  Insurance and claims.............................................   7.9        8.1       5.7
  General supplies and expenses....................................   4.1        4.0       3.6
  Taxes and licenses...............................................   1.9        2.2       2.1
  Communications and utilities.....................................   1.9        2.3       2.2
  (Gain) loss on sale of equipment.................................     *       (1.1)     (0.1)
  Depreciation and amortization....................................   8.3        8.9       5.3
  Amortization of goodwill.........................................   0.2        0.2       0.2
          Total operating costs and expenses....................... 100.0      100.7      97.1
  Operating income (loss)..........................................   0.0       (0.7)      2.9
Other income (expense):
  Interest expense.................................................  (3.0)      (3.2)     (2.6)
  Other, net.......................................................     *       (0.1)      0.1
Income (loss) before income taxes and extraordinary gain...........  (3.0)%     (4.0)%     0.4%
</TABLE>


----------------------

*    Less than 0.1%.

         Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

         Revenues decreased by 2.5% in 1997 to $143.7 million compared to $147.4
million in 1996.  Revenues decreased primarily as a result of a 7.4% decrease in
revenue equipment as the average number of tractors  decreased to 1,145 compared
to 1,237 in 1996.  The  decrease  in  revenue  equipment  was  offset  by a 3.7%
increase in equipment utilization (as measured by average miles per tractor) and
a 1.1%  increase  in average  revenue per total mile.  Management  believes  the
increased  utilization is a result of a greater demand for the freight  services
created by a decrease in equipment  overcapacity in the transportation  industry
in 1997 and the Company's  ability to better manage  revenue  equipment with new
communication  systems.  Management  expects the demand for freight  services to
increase   modestly  in  1998  and  plans  to  increase  fleet  size  by  up  to
approximately 10% with additional independent contractors, depending on economic
conditions  and  operating  results,  while  continuing  to emphasize  increased
productivity and utilization of equipment.

         Operating  costs and expenses  were 100.0% of revenues in 1997 compared
to 100.7% in 1996. Operating costs and expenses,  as a percent of revenue,  were
positively  affected  primarily  by  increased  utilization,  and a reduction in
communication  and  utilities  expense  as a  result  of  discontinued  use of a
cellular  mobile  communications  system.  Operating  costs and  expenses,  as a
percent of revenue were adversely  affected primarily by increased fuel and fuel
tax  expenses,  increased  maintenance  expenses  related  to an older  fleet of
equipment,  and a reduction  in gain  realized  from the sale of  equipment,  as
further described later in this report.  While a smaller  percentage of revenues


                                       13

<PAGE>



in 1997 as compared to 1996, adverse  developments in insurance claims continued
to have a negative affect on operating costs and expenses in 1997.

         Salaries,  wages and  benefits  increased  to 30.9% of revenues in 1997
compared to 29.7% in 1996,  and purchased  transportation  decreased to 17.8% of
revenues in 1997 compared to 22.0% of revenues in 1996  primarily as a result of
a 20% reduction in  independent  contractor  tractors in 1997 and a pay increase
given to Company drivers in August 1997. The Company also  implemented a mileage
incentive  program for Company  drivers in October  1997,  the cost of which was
more than offset by increased  utilization of equipment  realized as a result of
this program.  Independent  contractors  are under contract with the Company and
are responsible for their own salaries,  wages and benefits,  fuel,  maintenance
and  depreciation.  Independent  contractor  costs are  classified  as purchased
transportation expenses.

         Fuel and fuel taxes  increased  to 15.7% of revenues for the year ended
December 31, 1997, compared to 13.9% of revenues for the year ended December 31,
1996, as a result of a higher  percentage of miles driven with Company tractors,
higher fuel  prices,  and the Company  having no fuel secured  under  guaranteed
price  contracts  during  the last six  months of 1997.  In order to reduce  the
vulnerability  of the  Company  to rapid  increases  in the  price of fuel,  the
Company has  historically  entered into purchase  contracts  with fuel suppliers
from time to time for a portion of its estimated fuel requirements at guaranteed
prices.  During  1996,  future  fuel  prices  were at  levels  too  high to make
guaranteed  price  contracts for 1997 fuel viable.  As of December 31, 1997, the
Company had entered  into  various  agreements  with fuel  suppliers to purchase
approximately  18% of its estimated  fuel needs  through  December 31, 1998 at a
guaranteed  price.  The Company has also  implemented fuel surcharges to many of
its   customers.   Although   this   arrangement   helps  reduce  the  Company's
vulnerability  to rapid  increases  in the price of fuel,  the Company  will not
benefit from a decrease in the price of fuel to the extent of its  commitment to
purchase fuel under these contracts.

         Depreciation  and  amortization  decreased  to 8.3% of  revenue in 1997
compared to 8.9% in 1996,  revenue  equipment lease expense decreased to 5.3% of
revenues in 1997  compared to 5.4% in 1996,  and interest  expense  decreased to
3.0% of  revenue  in 1997  compared  to 3.2% in 1996 as a result of the  Company
refinancing  tractors  at the end of their  initial  lease  term onto  financing
contracts that reduce the monthly  financing cost of a tractor by  approximately
$600.

         In 1997, maintenance expense increased to 6.0% of revenues, compared to
5.1% of revenues in 1996 as a result of increased  maintenance  costs associated
with an older fleet  (tractor age 2.7 years at December 31, 1997 compared to 1.8
years at  December  31,  1996)  and the  expiration  of  certain  manufacturer's
warrantees.

         Insurance  and claims  expense  decreased  to 7.9% of  revenues in 1997
compared to 8.1% of revenues in 1996.  Insurance and claims expense continues to
be  higher  than  industry  standards  due to  adverse  developments  in 1997 in
insurance  claims  incurred when the Company  carried  deductibles  ranging from
$300,000 to $500,000. A significant number of these older claims were settled in
1997. The Company  implemented  several changes to its insurance program in 1997
that  management  believes will reduce overall  insurance  costs.  These changes
include  significantly lower deductibles on liability and workers'  compensation
coverage, and low deductible physical damage coverage on Company-owned tractors.
While the premiums on these  insurance  policies are increased,  based on recent
claims  experience,  managements  expects that the overall cost of insurance and
claims should decrease.

         Communications  and  utilities  decreased  to 1.9% of  revenues in 1997
compared to 2.3% of  revenues  in 1996 as a result of the Company  discontinuing
use of a cellular-based on-board communications system in June 1997. The Company
installed  the QUALCOMM  on-board  communications  system on all of its tractors
during the fourth  quarter of 1997.  This system assists the Company in tracking
loads,  servicing customers,  and communicating with drivers.  QUALCOMM utilizes
satellite  technology  service to link the Company's  drivers to its  operations
center.  Management  believes  that the QUALCOMM  system will not  significantly
increase expenses in 1998.

         (Gain)  loss on sale of  equipment  decreased  to 0.0% of revenue  from
(1.1)% as a result of the  Company's  decision  to dispose of fewer of its older
trailers in 1997 than in 1996.

         During 1997,  the  Company's  effective  tax rate was 0% because of its
pre-tax  losses that  exceeded any available  carrybacks  and an increase in the
valuation for the net operating loss generated in 1997.


                                       14

<PAGE>



         As  a  consequence   of  the  items   discussed   above,   loss  before
extraordinary gain in 1997 was $4,316,000 compared to $5,860,000 in 1996.


         Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

         Revenues  decreased by 11% in 1996 to $147.4 million compared to $164.8
million in 1995. This revenue  reduction  resulted  primarily from a decrease in
revenue  equipment as the average number of tractors  decreased to 1,237 in 1996
compared to 1,341 in 1995. Revenues in 1996 were also adversely affected by a 1%
decrease in the average  revenue per total mile.  This decrease  resulted from a
combination  of an increase in empty miles  percentage and a decrease in revenue
per loaded mile.  In  addition,  equipment  utilization  (as measured by average
miles per tractor) decreased 2% between the two periods. Management believes the
decrease  in average  revenue  per total mile and  equipment  utilization  was a
result of slower than  anticipated  economic  conditions and overcapacity in the
trucking industry in 1996.

         Operating  costs and expenses  were 100.7% of revenues in 1996 compared
to 97.1% in 1995.  Operating costs and expenses,  as a percent of revenue,  were
adversely affected primarily by a 1% reduction in average revenue per total mile
as well as a 2%  decrease  in  utilization  between  the two  periods,  an acute
shortage  of drivers in the first half of 1996,  and adverse  developments  in a
number of insurance claims.

         Salaries,  wages and  benefits  increased  to 29.7% of revenues in 1996
compared to 27.4% in 1995.  This  increase  resulted  primarily  from driver pay
increases  in October,  1995 and  January  1996,  and a decrease in  independent
contractor  tractors in 1996. In addition,  non-driver  payroll increased .5% of
revenue as a result of an increase in other  support  and  marketing  personnel,
which was partially  offset by a reduction in maintenance  personnel.  Purchased
transportation  decreased to 22.0% of revenue in 1996 compared to 25.0% in 1995.
This  decrease  was a result of a  reduction  in the mileage  incentive  pay for
independent  contractors and a 25% reduction in independent  contractor tractors
in 1996 from 1995.

         Fuel and fuel taxes  increased to 13.9% of revenue in 1996  compared to
12.9% in 1995.  Diesel fuel prices at the pump increased by approximately  12.8%
from  December 31, 1995, to December 31, 1996  (according  to the  Department of
Energy),  while the Company's fuel expense increased by approximately 7.8%. This
smaller  increase was because of the Company's  utilization of guaranteed  price
purchase contracts with fuel suppliers, in addition to surcharges to customers.

         Depreciation  and  amortization  increased  to 8.9% of  revenue in 1996
compared to 5.3% in 1995, and revenue  equipment lease expense decreased to 5.4%
of revenues in 1996  compared to 7.4% in 1995,  as a result of the Company's new
revenue  equipment being financed  through  capitalized  leases versus operating
leases.  Also, interest expense increased to 3.2% of revenue in 1996 compared to
2.6% in 1995 as a result of the majority of the Company's new revenue  equipment
being financed through capitalized leases and notes payable.

         In 1996, maintenance expense decreased to 5.1% of revenues, compared to
5.4% of revenues  in 1995 as a result of reduced  maintenance  costs  associated
with a newer fleet.

         Insurance and claims  increased to 8.1% of revenues in 1996 compared to
5.7% in 1995 as a result of an increase in  insurance  claims and losses in 1996
mainly involving new, less experienced drivers and increases in insurance claims
reserves of  approximately  $2.2 million  following  adverse  developments  in a
number of claims.

         During 1996,  the  Company's  effective  tax rate was 0% because of its
pre-tax  losses that  exceeded any available  carrybacks  and an increase in the
valuation for the net operating loss generated in 1996.

         As a consequence  of the items  discussed  above,  income (loss) before
extraordinary gain in 1996 was $(5,861,000) compared to $384,000 in 1995.

         Liquidity and Capital Resources


                                       15

<PAGE>



         The  Company's  sources  of  liquidity  have  been  funds  provided  by
operations,  leases on  revenue  equipment,  a  revolving  line of credit and an
accounts receivable financing facility.

         Net cash provided by operating  activities  totaled  approximately $8.0
million  for the  twelve  months  ended  December  31,  1997.  Net cash  used in
investing  activities  (primarily  acquisition  of  equipment)  amounted to $2.2
million in 1997.  The Company made cash payments on debt and  capitalized  lease
obligations of $8.7 million in 1997.

         Working capital (deficit)  increased from $(9,156,777) to $(23,431,608)
primarily  because of the  maturity of several  capitalized  lease  contracts in
1998,  aggregating  approximately  $7 million at  maturity,  and the purchase of
equipment  out of working  capital  aggregating  approximately  $6 million.  The
capitalized  lease  contracts are secured by revenue  equipment which the vendor
has agreed to accept in full  payment of the leases upon  maturity.  In February
1998, the Company  secured  long-term  financing for $3 million of the equipment
purchased out of working capital.

         As  a  result  of  the  Company  making   contractual   debt  payments,
capitalized lease and long-term obligations have decreased from $55.0 million at
December 31, 1996, to $41.4 million at December 31, 1997.

         The Company has a $11.5  million  working  capital  line of credit with
Congress  Financial  Corporation  (Northwest)  which  expires  August 1999.  The
Company anticipates that use of the line will be primarily for insurance related
letters of credit as well as providing any short term cash  requirements.  As of
December 31, 1997 the Company has utilized $10.4 million of this line of credit,
$5.6 million for insurance related letters of credit,  and $4.8 million of short
term cash borrowings.  The Congress Agreement restricts the payment of dividends
and is secured by accounts receivable.

         The Company  also has a credit  facility  with the Bank of New York for
issuance of letters of credit up to $4.8 million  which expires May 15, 1998. As
of December  31, 1997,  the Company had used $4.8  million of this  facility for
letters of credit in favor of the Company's  insurance  carrier.  As outstanding
letters of credit issued under this credit facility are not renewed, the maximum
commitment available under this credit facility will be reduced by the amount of
the expiring  letters of credit.  This credit  facility had loan covenants which
obligated  the Company to maintain a required  level of  profitability  and cash
flow.  On March 21,  1997,  the Company and The Bank of New York entered into an
amendment to this credit  facility to delete certain  financial  covenants,  add
covenants requiring certain levels of tangible net worth for periods through and
including  December  31,  1997,  and shorten the  expiration  date of the credit
facility  from  December 31, 1998 to December 31, 1997.  On March 31, 1998,  the
Agreement was extended effective December 31, 1997, to May 15, 1998. The Company
may be required to seek additional  amendments of the revolving  credit facility
with The Bank of New York in the  future  based  on  actual  operating  results.
Management  believes that following the  expiration of the credit  facility with
The Bank of New  York,  the  Company  will be able to  satisfy  its  anticipated
insurance related letter of credit  requirements  under its working capital line
of  credit  with  Congress  Financial  Corporation  (Northwest)  or  new  credit
facilities.  There can be no  assurance,  however,  that the Congress  Financial
Corporation  (Northwest)  credit  facility  will be  sufficient  to satisfy  the
Company's  insurance  related letter of credit  requirements or that the Company
will be able to obtain additional or new credit facilities on terms favorable to
the Company, if at all.

     The Company's net accounts  receivable  balance  increased by approximately
$2.5  million  between  December  31,  1996 and 1997,  as a result of  increased
business levels in the fourth quarter of 1997.

     The Company expects capital  expenditures to be approximately $2 million in
1998 primarily for additions to the Company's  communications  system.  In 1997,
the Company acquired 76 new tractors and no new trailers.  The Company purchased
approximately  $7.5 million of formerly  leased revenue  equipment  during 1997.
Management  anticipates that future expansion of the fleet or the replacement of
retired company-owned  tractors will be accomplished with additional independent
contractors as future economic conditions dictate.

         Management  believes  that  commitments  available  under the Company's
lines of credit will be sufficient to meet the  Company's  capital  requirements
through  1998 However , the  Company's  business is capital  intensive  and will
require the  Company to seek  additional  debt and  possibly  equity  capital to
enable the Company to maintain a modern fleet.  The Company's  ability to obtain
such  financing  could be  affected by its  operating  results to the extent the
Company  continues to operate at a loss.  In addition,  the  Company's  need for
additional  equity  or debt  financing  to meet its  operational  needs  will be
accelerated if the Company continues to operate at a loss.  Whether such capital
will be available on favorable  terms,  or at all,  will depend on the Company's


                                       16

<PAGE>



future operating results,  prevailing economic and industry conditions and other
factors over which the Company has little or no control.

         Fuel is one of the Company's most substantial  operating  expenses.  In
order to reduce the Company's  vulnerability  to rapid increases in the price of
fuel, the Company  enters into purchase  contracts with fuel suppliers from time
to time for a portion of its estimated fuel  requirements at guaranteed  prices.
As of December 31, 1997,  the Company had entered into various  agreements  with
fuel suppliers to purchase approximately 18% of its estimated fuel needs through
December 31, 1998 at a guaranteed price.  Although this arrangement helps reduce
the Company's vulnerability to rapid increases in the price of fuel, the Company
will not  benefit  from a  decrease  in the  price of fuel to the  extent of its
commitment to purchase fuel under these contracts.

         Seasonality

         In the trucking industry, revenues generally show a seasonal pattern as
customers  reduce  shipments  during and after the winter holiday season and its
attendant weather  variations.  Operating expenses also tend to be higher during
the cold weather  months,  primarily  due to poorer fuel  economy and  increased
maintenance costs.

         Inflation

         Inflation   can  be  expected  to  have  an  impact  on  the  Company's
operations. The effect of inflation has been minimal over the past three years.

         Factors Affecting Future Results

         These   statements   are  subject  to  known  and  unknown   risks  and
uncertainties,  including decreased demand for freight,  slower than anticipated
economic conditions, shortages of drivers and such other risks as are identified
and  discussed  herein and in the  Company's  filings  with the  Securities  and
Exchange Commission. These known and unknown risks and uncertainties could cause
the Company's  actual results in future periods to be materially  different from
any future performance suggested herein.

Item 8.  Financial Statements and Supplementary Data.

         The  Company's  financial  statements  and notes are included  herewith
beginning on page F-1. The  supplementary  data is included  herein  immediately
following the signature page of this report on Form 10-K.


Item 9.  Changes and Disagreements with Accountants on Accounting and Financial 
         Disclosure.

         There has been no Form 8-K filed  reporting a change of  accountants or
reporting  disagreements  on  any  matter  of  accounting  principle,  practice,
financial statement disclosure or auditing scope or procedure.


                                       17

<PAGE>



                                    PART III


Item 10, 11, 12 and 13.

         These items are  incorporated by reference to the Company's  definitive
Proxy Statement in the future.




                                       18

<PAGE>



                                     PART IV


Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.

           (a)    Documents Filed as Part of this Report:

                  (1) Financial  Statements.  The following financial statements
         are filed hereunder as provided in Item 8 of this report:

                  --       Report of Independent Public Accountants

                  --       Balance Sheets as of December 31, 1997 and 1996

                  --       Statements of Operations for the Years Ended December
                           31, 1997, 1996 and 1995

                  --       Statements of Stockholders'  Equity (Deficit) for the
                           Years Ended December 31, 1997, 1996 and 1995

                  --       Statements of Cash Flows for the Years Ended December
                           31, 1997, 1996 and 1995

                  --       Notes to Financial Statements

                  (2) Financial  Statement  Schedule.  The  following  financial
         statement schedule for the years ended December 31, 1997, 1996 and 1995
         is included  herein  immediately  following the signature  page to this
         report:

                  --       Schedule II -- Valuation and Qualifying Accounts

           All  other  schedules  have  been  omitted  because  the  information
required therein is not present in amounts  sufficient to require  submission of
the schedule or because the  information  required is included in the  financial
statements or notes thereto.

           (b)    Reports on Form 8-K:

                  None.

           (c)    Exhibits:

           The following  exhibits  required by Item 601 of  Regulation  S-K are
filed  herewith or have been filed  previously  with the Commission as indicated
below:

<TABLE>
<CAPTION>

 Regulation
     S-K                                                                                          Sequential
 Exhibit No.                                    Description                                        Page No.
--------------------------------------------------------------------------------------------------------------
<S>         <C>                                                                                 <C>
            2.1 First Amended Plan of Reorganization of the Company as confirmed                [Exhibit 2.1]
                by the Bankruptcy Court on February 22, 1994.*
            2.2 Agreement and Plan of Reorganization of Norton Enterprises, 
                Inc., a Delaware corporation, Great Western Leasing, Inc., a 
                Utah corporation, and the Company dated March 7, 1994.*                         [Exhibit 2.2]
            3.1 Revised Articles of Incorporation of the Company.*                              [Exhibit 3.1]
            3.2 Amended and Restated Bylaws of the Company.*                                    [Exhibit 3.2]
            4.1 Revised Articles of Incorporation of the Company.*                              [Exhibit 3.1]
            4.2 Amended and Restated Bylaws of the Company.*                                    [Exhibit 3.2]
            4.3 Specimen Certificate.*                                                          [Exhibit 4.3]
</TABLE>


                                       19

<PAGE>



<TABLE>
<CAPTION>
 Regulation
     S-K                                                                                          Sequential
 Exhibit No.                                    Description                                        Page No.
--------------------------------------------------------------------------------------------------------------
<S>        <C>                                                                                  <C>  
           10.1 $9,500,000 Revolving Loan Agreement with Letter of Credit Facility              [Exhibit 10.1]
                between The Bank of New York and the Company dated March 7, 1994, as
                amended.*
           10.2 Fifth Amendment to $9,500,000 Revolving Loan Agreement with Letter of           [Exhibit 10.1]
                Credit Facility.***
           10.3 Sixth through Ninth Amendments to $9,500,000 Revolving Loan Agreement.          [Exhibit 10.1]
           10.4 Employment Term Sheet -- Robert Hill.**                                         [Exhibit 10.3]
           10.5 PST Vans, Inc. Stock Incentive Plan dated December 6, 1994.*                    [Exhibit 10.2]
           10.6 Amendments No. 1 and No. 2 to PST Vans, Inc. Stock Incentive Plan.**            [Exhibit 10.2]
           10.7 Executive Incentive Program for Kenneth R. Norton and Robert D. Hill.*          [Exhibit 10.3]
           10.8 Registration Rights Agreement dated as of March 7, 1994 between the             [Exhibit 10.5]
                Company, The Bank of New York and Kenneth R. Norton.*
           10.9 Loan and Security Agreement with Congress Financial Corporation                 [Exhibit 10.1]
                (Northwest).****
           10.10First Amendment to Congress Financial Corp. (Northwest) Credit                  [Exhibit 10.1]
                Facility.*****
           10.11Amendment No.3 to PST Vans, Inc. Stock Incentive Plan.***                       [Exhibit 10.2]
           10.12Tenth Amendment to $9,500,000 Revolving Loan Agreement.                         Filed herewith
           10.13Agreement for Outsourcing Services between The Sabre Group and the              Filed herewith
                Company
           23.1 Consent of Arthur Andersen LLP, independent public accountants.                 Filed herewith
</TABLE>

----------------------

*        Incorporated  by  reference  to the  indicated  exhibits in the Company
         Registration Statement on Form S-1 (File No. 33-87212)
**       Incorporated  by reference to the  indicated  exhibits in the Company's
         Annual Report on Form 10-K for the year ended December 31, 1995.
***      Incorporated  by reference to the  Company's  Quarterly  Report on Form
         10-Q for the quarterly period ended March 31, 1996.
****     Incorporated  by reference to the  indicated  exhibits in the Company's
         quarterly  report on Form 10-Q for the quarterly period ended September
         30, 1996.
*****    Incorporated  by reference to the  indicated  exhibits in the Company's
         quarterly  report on Form 10-Q for the quarterly period ended March 31,
         1997.

         (d)      Financial Statement Schedules:
                  See Item 14(a)(2) of this report.


                                       20

<PAGE>



                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) 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, on March 28, 1996.

                              PST VANS, INC.



                              By:
                              Kenneth R. Norton
                              Chairman of the Board and Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on March 28, 1996.


   Signature                             Capacity in Which Signed               
                                                                               
------------------------      Chairman of the Board and Chief Executive Officer
Kenneth R. Norton             (principal executive officer)                    
                                                                               
                                                                               
------------------------      President, Chief Operating Officer and Director  
Robert D. Hill                                                                 
                                                                               
                                                                               
------------------------      Chief Financial Officer and Secretary/Treasurer  
Neil R. Vos                   (principal financial and accounting officer)     
                                                                               
                                                                               
------------------------      Director                                         
James F. Redfern                                                               
                                                                               
                                                                               
------------------------      Director                                         
Charles A. Lynch                                                               
                                                                               
                                                                               
------------------------      Director                                         
James E. Otto                 







                                       21

<PAGE>


                                  EXHIBIT INDEX



<TABLE>
<CAPTION>
 Regulation
     S-K                                                                                          Sequential
 Exhibit No.                                    Description                                        Page No.
 -----------                                    -----------                                        --------

<S>         <C>                                                                                 <C>
            2.1 First Amended Plan of Reorganization of the Company as confirmed                [Exhibit 2.1]
                by the Bankruptcy Court on February 22, 1994.*
            2.2 Agreement and Plan of Reorganization of Norton Enterprises, Inc., a             [Exhibit 2.2]
                Delaware corporation, Great Western Leasing, Inc., a Utah corporation, and
                the Company dated March 7, 1994.*
            3.1 Revised Articles of Incorporation of the Company.*                              [Exhibit 3.1]
            3.2 Amended and Restated Bylaws of the Company.*                                    [Exhibit 3.2]
            4.1 Revised Articles of Incorporation of the Company.*                              [Exhibit 3.1]
            4.2 Amended and Restated Bylaws of the Company.*                                    [Exhibit 3.2]
            4.3 Specimen Certificate.*                                                          [Exhibit 4.3]
           10.1 $9,500,000 Revolving Loan Agreement with Letter of Credit Facility              [Exhibit 10.1]
                between The Bank of New York and the Company dated March 7, 1994, as
                amended.*
           10.2 Fifth Amendment to $9,500,000 Revolving Loan Agreement with Letter of           [Exhibit 10.1]
                Credit Facility.***
           10.3 Sixth through Ninth Amendments to $9,500,000 Revolving Loan Agreement.          [Exhibit 10.1]
           10.4 Employment Term Sheet -- Robert Hill.**                                         [Exhibit 10.3]
           10.5 PST Vans, Inc. Stock Incentive Plan dated December 6, 1994.*                    [Exhibit 10.2]
           10.6 Amendments No. 1 and No. 2 to PST Vans, Inc. Stock Incentive Plan.**            [Exhibit 10.2]
           10.7 Executive Incentive Program for Kenneth R. Norton and Robert D. Hill.*          [Exhibit 10.3]
           10.8 Registration Rights Agreement dated as of March 7, 1994 between the             [Exhibit 10.5]
                Company, The Bank of New York and Kenneth R. Norton.*
           10.9 Loan and Security Agreement with Congress Financial Corporation                 [Exhibit 10.1]
                (Northwest).****
           10.10First Amendment to Congress Financial Corp. (Northwest) Credit                  [Exhibit 10.1]
                Facility.*****
           10.11Amendment No.3 to PST Vans, Inc. Stock Incentive Plan.***                       [Exhibit 10.2]
           10.12Agreement for Outsourcing Services between The Sabre Group and the              Filed herewith
                Company
           10.13Tenth Amendment to $9,500,000 Revolving Loan Agreement.                         Filed herewith
           23.1 Consent of Arthur Andersen LLP, independent public accountants.                 Filed herewith
</TABLE>


----------------------

*        Incorporated  by  reference  to the  indicated  exhibits in the Company
         Registration Statement on Form S-1 (File No. 33-87212)
**       Incorporated  by reference to the  indicated  exhibits in the Company's
         Annual Report on Form 10-K for the year ended December 31, 1995.
***      Incorporated  by reference to the  Company's  Quarterly  Report on Form
         10-Q for the quarterly period ended March 31, 1996.
****     Incorporated  by reference to the  indicated  exhibits in the Company's
         quarterly  report on Form 10-Q for the quarterly period ended September
         30, 1996.
*****    Incorporated  by reference to the  indicated  exhibits in the Company's
         quarterly  report on Form 10-Q for the quarterly period ended March 31,
         1997.

                                       22

<PAGE>



<TABLE>

                          INDEX TO FINANCIAL STATEMENTS

<CAPTION>
                                                                                                              Page
                                                                                                              ----

<S>                                                                                                              <C>
Report of Independent Public Accountants.......................................................................F-2

Balance Sheets at December 31, 1997 and 1996...................................................................F-3

Statements of Operations for the Years Ended December 31, 1997, 1996 and 1995..................................F-4

Statements of Stockholders' Equity (Deficit) for the Years Ended December 31, 1997, 1996 and 1995..............F-5

Statements of Cash Flows for the Years Ended December 31, 1997, 1996 and 1995..................................F-6

Notes to Financial Statements..................................................................................F-7
</TABLE>


                                       F-1

<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To PST Vans, Inc.:

         We have audited the  accompanying  balance sheets of PST Vans, Inc., (a
Utah  corporation) as of December 31, 1997 and 1996, and the related  statements
of operations,  stockholders'  equity and cash flows for each of the three years
in the period ended  December  31,  1997.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the financial position of PST Vans, Inc. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended  December 31, 1997 in conformity
with generally accepted accounting principles.



ARTHUR ANDERSEN LLP

Salt Lake City, Utah
     February 11, 1998 (except with respect 
     to matters  discussed in the first
     paragraph of Note 4 as to which the 
     date is March 31, 1998.)

                                       F-2

<PAGE>



<TABLE>
<CAPTION>
                                 PST VANS, INC.
                                 BALANCE SHEETS

                                     ASSETS
                                                                                   December 31,
                                                                      ------------------------------------
                                                                            1997              1996
                                                                      --------------        --------------
<S>                                                                   <C>                   <C>           
CURRENT ASSETS:
     Cash.............................................................$    1,282,255        $    4,098,361
     Receivables, net of allowance for doubtful
         accounts of $908,000 and $806,000, respectively...............   17,087,038            14,607,292
     Deposits..........................................................      343,867               353,437
     Prepaid expenses and other........................................    3,097,538             3,258,669
     Inventories and operating supplies...............................       726,853               689,875
         Total current assets.........................................    22,537,551            23,007,634
                                                                      ---------------       --------------

PROPERTY AND EQUIPMENT, at cost, net of
     accumulated depreciation and amortization of
     $26,399,259 and $23,282,064, respectively........................    48,265,324            58,116,763
                                                                      ---------------       --------------

GOODWILL, net of accumulated amortization
     of $3,568,297 and $3,296,334, respectively.......................     8,340,187             8,612,150
                                                                      ---------------      ---------------

OTHER ASSETS, net....................................................        332,632               523,539
         ............................................................   $ 79,475,694          $ 90,260,086

                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:...................................................
     Revolving Line of Credit   ......................................$    4,762,493          $      ---
     Current portion of long-term obligations   .......................    3,037,018             1,388,581
     Current portion of capitalized lease obligations..................   23,599,973            18,708,614
     Accounts payable..................................................    7,306,459             4,140,985
     Current portion of accrued claims payable.........................    3,990,958             5,456,316
     Accrued liabilities..............................................     3,271,718             2,469,915

         Total current liabilities.....................................   45,968,619            32,164,411
                                                                       --------------        -------------

LONG-TERM ACCRUED CLAIMS PAYABLE,
     net of current portion..........................................      1,257,429             1,429,227
                                                                     ----------------       --------------

LONG-TERM OBLIGATIONS, net of current portion........................      3,985,909             1,986,214
                                                                     ----------------       --------------

CAPITALIZED LEASE OBLIGATIONS, net of
     current portion..................................................    10,752,721            32,907,995
                                                                      ---------------       --------------

COMMITMENTS AND CONTINGENCIES (Notes 1 and 7)

STOCKHOLDERS' EQUITY:
     Preferred stock, no par value, 5,000,000 shares
         authorized, none issued.....................................           ---                  ---
     Common stock, $.001 par value, 20,000,000 shares
         authorized, 4,239,945 and 4,217,157 shares issued,
         respectively................................................          4,240                 4,217
     Additional paid-in capital...........................................49,812,539            49,759,238
     Accumulated deficit...............................................  (32,305,763)          (27,991,216)
         Total stockholders' equity...................................    17,511,016            21,772,239
         ...............................................................$ 79,475,694          $ 90,260,086
</TABLE>

      The accompanying notes are an integral part of these balance sheets.

                                       F-3

<PAGE>





<TABLE>
                                                  PST VANS, INC.
                                             STATEMENTS OF OPERATIONS
<CAPTION>

                                                                           For the Years Ended December 31,
                                                                 -------------------------------------------------
                                                                      1997               1996              1995
                                                                 ------------       ------------      ------------
<S>                                                              <C>                <C>               <C>         
REVENUES.........................................................$143,737,430       $147,418,904      $164,794,366
                                                                 ------------       ------------      ------------
COSTS AND EXPENSES:
     Salaries, wages and benefits..................................44,360,224         43,847,942        45,208,090
     Purchased transportation......................................25,578,176         32,393,331        41,280,895
     Fuel and fuel taxes...........................................22,532,582         20,555,431        21,245,011
     Revenue equipment lease expense................................7,576,456          8,021,676        12,224,340
     Maintenance....................................................8,662,947          7,491,155         8,822,454
     Insurance and claims..........................................11,384,315         11,942,008         9,315,173
     General supplies and expenses..................................5,930,058          5,558,052         5,995,821
     Taxes and licenses.............................................2,775,614          3,309,478         3,445,040
     Communications and utilities...................................2,801,757          3,429,699         3,561,698
     Depreciation and amortization.................................11,910,563         13,174,606         8,803,585
     (Gain) loss on sale of equipment..................................12,875         (1,613,842)         (150,940)
     Amortization of goodwill..................................       271,963            271,963           271,963
         .........................................................143,797,530        148,381,499       160,023,130
OPERATING INCOME (LOSS).........................................     ( 60,100)          (962,595)        4,771,236

OTHER INCOME (EXPENSE):
     Interest expense..............................................(4,359,888)        (5,080,202)       (4,283,463)
     Other, net................................................       105,441            182,032           147,408
         ........................................................  (4,254,447)        (4,898,170)       (4,136,055)
                                                                 -------------     --------------   --------------
     Income (loss) before provision for
         income taxes..............................................(4,314,547)        (5,860,765)          635,181
PROVISION FOR INCOME TAXES................................                ---              ---             251,532

NET INCOME (LOSS)...............................................$  (4,314,547)     $  (5,860,765)  $       383,649
                                                                ==============     ==============  ===============

NET INCOME (LOSS) PER
   COMMON SHARE - BASIC AND DILUTED.........................$           (1.02)    $        (1.39)  $          0.10
                                                            ==================    ===============  ===============

WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING-BASIC...........................................     4,233,467          4,212,211         3,887,528
                                                               ===============     ==============   ==============

WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING-DILUTED.......................................     4,233,467          4,212,211         3,949,526
                                                               ==============     ==============    ==============

</TABLE>










   The accompanying notes are an integral part of these financial statements.

                                       F-4

<PAGE>





<TABLE>
                                 PST VANS, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<CAPTION>

                                              Additional                        Total
                                 Common        Paid-In       Accumulated     Stockholders'
                                  Stock        Capital         Deficit          Equity
                                  -----        -------         -------          ------


<S>                           <C>            <C>            <C>             <C>         
BALANCE,
   December 31, 1994          $      2,600   $ 27,984,629   $(22,514,100)   $  5,473,129
Sale of 1,600,000 shares
   of common stock in
   connection with initial
   public offering, net              1,600     21,633,753           --        21,635,353
Issuance of 9,409 shares of
   common stock as satis-
   faction of $112,903
   general unsecured claims              9        112,894           --           112,903
Net income                            --             --          383,649         383,649
                              ------------   ------------   ------------    ------------
BALANCE,
   December 31, 1995                 4,209     49,731,276    (22,130,451)     27,605,034
Sale of 7,748 shares
   of common stock to
   employees                             8         27,962           --            27,970
Net loss                              --             --       (5,860,765)     (5,860,765)
                              ------------   ------------   ------------    ------------
BALANCE,
   December 31, 1996                 4,217     49,759,238    (27,991,216)     21,772,239
Sale of common stock
   to employees                         23         53,301           --            53,324
Net loss                              --             --       (4,314,547)     (4,314,547)
                              ------------   ------------   ------------    ------------
BALANCE,
   December 31, 1997          $      4,240   $ 49,812,539   $(32,305,763)   $ 17,511,016
                              ============   ============   ============    ============
</TABLE>














   The accompanying notes are an integral part of these financial statements.

                                       F-5

<PAGE>



  



<TABLE>
<CAPTION>
                                                              PST VANS, INC.
                                                         STATEMENTS OF CASH FLOWS

                                                                        For the Years Ended December 31,
                                                                               1997           1996          1995
     CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                       <C>            <C>            <C>         
     Net (loss) income                                                    $  (4,314,547) $  (5,860,765) $    383,649
                                                                          -------------- --------------  ------------
     Adjustments to reconcile net (loss) income to net
       cash provided by operating activities -                   
       Depreciation and amortization                                         11,910,563     13,174,605      8,803,585
       Provision for losses on accounts receivable                              936,697      1,280,634      1,097,890
       Amortization of goodwill                                                 271,963        271,963        271,963
       (Gain) loss on sale of equipment                                          12,875     (1,613,842)      (150,940)
       (Increase) decrease in receivables                                    (3,416,443)       347,648     (1,722,103)
       Decrease in deposits                                                       9,570        632,515      2,876,942
       (Increase) decrease in prepaid expenses and other                        161,132        830,326     (1,361,156)
       Increase in inventories and operating supplies                           (36,978)       (47,145)       (77,773)
       Decrease in other assets, net                                            190,907         17,823      2,265,931
       Increase (decrease) in accounts payable                                3,165,474      ( 368,849)      (285,119)
       Increase (decrease) in accrued claims payable                         (1,637,156)     1,148,468        717,283
       Increase (decrease) in accrued liabilities                               801,808       (786,981)    (1,525,566)
                                                                       
            Total adjustments                                                12,370,412     14,887,165     10,910,937
                                                                           -------------  ------------- -------------

            Net cash flows provided by operating activities                   8,055,865      9,026,400     11,294,586
                                                                           -------------  ------------- -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of equipment                                         3,194,556      4,323,495       1,163,436
     Acquisition of property and equipment                                  (5,349,216)      (988,590)     (9,480,079)
                                                                           -------------  ------------- -------------

          Net cash flows provided by (used in) investing activities         (2,154,660)     3,334,905      (8,316,643)
                                                                           -------------  ------------- -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from revolving line of credit, net                             4,762,493            ---             ---
     Principal payments on capitalized lease obligations                   (11,568,432)   (10,774,663)     (6,478,232)
     Principal payments on long-term obligations                            (2,039,296)    (1,766,232)     (2,234,107)
     Proceeds from sale of common stock to employees                            53,324         27,970             ---
     Proceeds from sale of common stock, net                                       ---            ---      21,635,353
     Purchase of accounts receivable from factor                                   ---            ---      (9,063,711)
     Decrease in advances from factor                                              ---            ---      (5,336,289)
     Proceeds from long-term obligations                                        74,600            ---       1,983,824
                                                                           -------------  ------------- -------------

      Net cash flows (used in) provided by financing activities             (8,717,311)   (12,512,925)        506,838
                                                                           -------------  ------------- -------------

NET INCREASE (DECREASE) IN CASH                                             (2,816,106)      (151,620)      3,484,781
CASH AT BEGINNING OF YEAR                                                    4,098,361      4,249,981         765,200
                                                                           -------------  ------------- -------------

CASH AT END OF YEAR                                                         $1,282,255  $   4,098,361    $  4,249,981
                                                                           ============= ==============  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION:
     Cash paid for -
       Interest                                                             $4,438,378     $5,115,442      $4,106,793
       Income taxes                                                             31,040         90,659       1,691,615
SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:
     Equipment acquired through capitalized lease obligations                      ---            ---      51,475,706

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       F-7

<PAGE>



                                 PST VANS, INC.

                          NOTES TO FINANCIAL STATEMENTS



(1)    Nature of Business

PST Vans,  Inc.  ("PST") is a  nationwide  common motor  carrier  with  48-state
general  commodity  and  contract  operating  authorities.  PST provides dry van
truckload  services  focused on  serving  three  markets  in the United  States;
transcontinental, intrawest and midwest-southeast. PST transports a wide variety
of freight,  much of which is time sensitive,  including paper products,  retail
products, non-perishable food products, tires and electronic equipment.

Reorganization Under Chapter 11

On June 2, 1993, PST filed a voluntary  petition in the United States Bankruptcy
Court for the  District  of Utah to  reorganize  under  Chapter 11 of the United
States  Bankruptcy  Code.  During the period from June 2, 1993 to March 7, 1994,
the Company  operated as a  debtor-in-possession  under the  supervision  of the
Bankruptcy Court. As of December 31, 1997 and 1996,  approximately $ 198,000 and
$ 334,000,  respectively,  of the  estimated  liabilities  subject to compromise
remain outstanding and are included in long-term obligations.  All other amounts
subject to compromise have been converted to equity, paid or forgiven.

The  Plan  of  Reorganization  (the"  Plan")  required  the  Company  to pay any
remaining  portion of general unsecured claims in the event of an initial public
offering  (IPO) within the five year period  subsequent to January 1, 1994.  The
Plan allowed for each  unsecured  creditor to elect to: 1) receive cash equal to
the amount of the unpaid balance of its unsecured claim from the proceeds of the
IPO, or 2) use the unpaid  balance of its unsecured  claim to subscribe to stock
to be issued  pursuant to the IPO,  which stock was to be issued at a 20 percent
discount  from the initial  offering  price.  In  connection  with the IPO,  the
Company paid approximately  $1,150,000 to general unsecured creditors and issued
9,409  shares of common  stock to its Chief  Executive  Officer and  significant
stockholder.

(2) Summary of Significant Accounting Policies

Revenue Recognition

Revenue is recognized as services are performed.  The Company  allocates revenue
between  reporting  periods  based on relative  transit  time in each  reporting
period and recognizes direct expenses as incurred.

Receivables and Advances from Factor

Prior to the IPO of the  Company's  common  stock in  March  1995,  PST sold and
factored a significant  portion of its trade accounts  receivable with a finance
company.  The terms of the factoring  agreement allowed for the sale of accounts
both with and without  recourse  depending  upon the  customer.  Until March 31,
1995,  substantially  all of the Company's  receivables were sold to the finance
company.  The finance  company  also  provided  advances to the Company  against
freight bills for which  documentation  was incomplete.  As the Company supplied
all required  documentation to the finance company,  the completed freight bills
were sold.

                                       F-8

<PAGE>



Deposits and Other Assets, net

PST is  required  to keep  certain  amounts on deposit  with  various  companies
related to insurance, fuel purchases and certain leasing agreements. The Company
had approximately  $344,000 and $303,000 in deposits with insurance  carriers at
December  31,  1997 and 1996,  respectively  and $50,000  with  lessors and fuel
vendors at December 31, 1996.

Inventories and Operating Supplies

Inventories  consist  primarily of tires, fuel and maintenance parts for revenue
equipment.  Inventories  are stated at the lower of first-in,  first-out  (FIFO)
cost or market value.

Property and Equipment

Property and equipment are recorded at cost and  depreciated or amortized  based
on the straight-line  method over their estimated useful economic lives,  taking
into consideration salvage values for purchased property and residual values for
equipment held under capital leases.  Leasehold  improvements are amortized over
the terms of the respective leases or the estimated economic useful lives of the
assets, whichever is shorter.

Expenditures  for routine  maintenance  and  repairs  are  charged to  operating
expense as  incurred.  Major  overhauls  and  betterments  are  capitalized  and
depreciated over their estimated  economic useful lives. Tires purchased as part
of revenue  equipment are capitalized as a cost of equipment.  Replacement tires
are  expensed  when  placed  in  service.  Upon the  disposal  of  property  and
equipment,  the cost and accumulated  depreciation are removed from the accounts
and any gain or loss is included in the determination of income or loss.

Property and equipment consists of the following:
<TABLE>
<CAPTION>
                                                  Est. Useful
                                                Lives (Years)         1997              1996
                                                -------------         ----              ----
<S>                                                <C>           <C>                <C>         
Land                                                             $  1,182,421       $  1,182,421
Revenue equipment                                  2-10            66,443,716         73,453,974
Buildings and improvements                         5-30             3,546,529          3,477,645
Furniture and fixtures                             5-10             2,160,823          1,953,389
Other equipment                                    3-5              1,331,094          1,331,398
                                                                   74,664,583         81,398,827
                                                                   ----------         ----------
Less Accumulated depreciation and amortization                    (26,399,259)       (23,282,064)
                                                                  -----------        ----------- 
                                                                  $48,265,324        $58,116,763
                                                                  ============       ===========
</TABLE>
Goodwill

Goodwill  is being  amortized  on a straight  line basis over forty  years.  The
Company  continually  evaluates whether events and  circumstances  have occurred
that  indicate  the  remaining  balance  may not be  recoverable.  When  factors
indicate goodwill should be evaluated for possible impairment,  the Company uses
an estimate of the  discounted  future cash flows over the life of the  goodwill
and  comparable   market   information  in  measuring   whether  the  amount  is
recoverable.

Income Taxes

The Company recognizes a liability or asset for the deferred tax consequences of
all temporary  differences  between the tax bases of assets or  liabilities  and
their reported amounts in the financial statements.  These temporary differences
will result in taxable or  deductible  amounts in future years when the reported
amounts of the assets or liabilities are recovered or settled.  The deferred tax
assets are reviewed for recoverability and valuation  allowances are provided as
necessary.


                                       F-9

<PAGE>



Insurance Coverage and Accrued Claims Payable

The Company maintains insurance for losses related to public liability, property
damage,  cargo  and  worker's   compensation  claims  in  amounts  it  considers
sufficient. Nevertheless, the Company could be adversely affected if it incurred
a  liability  as a  result  of  claims  in  excess  of its  policy  limits  or a
significant  volume of claims below its deductible limits. The Company maintains
loss prevention programs in an effort to minimize this risk.

The  Company  estimates  and  accrues  a  liability  for its  share of  ultimate
settlements  using all available  information  including the services of a third
party  insurance risk claims  administrator  to assist in  establishing  reserve
levels  for  each  occurrence  based  on  the  facts  and  circumstances  of the
occurrence  coupled with the Company's past history of such claims.  The Company
accrues for worker's  compensation  and  automobile  liabilities  when reported,
typically the same day as the occurrence.  Additionally,  the Company accrues an
estimated  liability for incurred but not reported claims.  Expense depends upon
actual loss  experience and changes in estimates of settlement  amounts for open
claims which have not been fully resolved. The Company provides for adverse loss
developments  in the period when new  information  so dictates.  The amounts the
Company will  ultimately  pay on its claims  outstanding as of December 31, 1997
could  differ   materially  in  the  near  term  from  amounts  accrued  in  the
accompanying December 31, 1997 balance sheet.

Based upon historical and projected trends in claims  payments,  the Company has
classified  the  claims  payable  in  current  and long term  components  in the
accompanying balance sheet.

Net Income (Loss) Per Common Share

Basic net income (loss) per common share ("Basic EPS") excludes  dilution and is
computed by dividing net income (loss) by the weighted  average number of common
shares  outstanding  during the year. Diluted net income (loss) per common share
("Diluted  EPS")  reflects  the  potential  dilution  that could  occur if stock
options or other common stock equivalent were exercised or converted into common
stock.  The computation of Diluted EPS does not assume exercise or conversion of
securities  that would  have an  anti-dilutive  effect on net income  (loss) per
common share.  In periods where losses are  recorded,  common stock  equivalents
would decrease the net loss per common share and are therefore not considered in
the calculation of weighted  average common shares  outstanding for Diluted EPS.
Net income (loss) per common share amounts and share data have been restated for
all years presented in the  accompanying  financial  statements to reflect Basic
and Diluted EPS.

The following is a reconciliation  of the numerator and denominator of Basic EPS
to the numerator and  denominator of Diluted EPS for all years  presented in the
accompanying financial statements
<TABLE>
<CAPTION>

                                      Net Income (Loss)              Shares            Per Share
                                          (Numerator)             (Denominator)          Amount
                                          -----------             -------------          ------
<S>                                       <C>                        <C>        <C>             
Year Ended December 31, 1997
     Basic EPS                            $ (4,314,547)              4,233,467  $         (1.02)
         Effect of Stock Options                    --                      --               --
                                          -----------             -------------          ------
     Diluted EPS                          $ (4,314,547)              4,233,467  $         (1.02)
                                          =============         ==============  ================

Year Ended December 31, 1996
     Basic EPS                            $ (5,860,765               4,212,211  $         (1.39)
         Effect of Stock Options                    --                      --               --
                                          -----------             -------------          ------
     Diluted EPS                          $ (5,860,765)              4,212,211  $         (1.39)
                                          =============         ==============  ================

Year Ended December 31, 1995
     Balance EPS                         $     383,649               3,887,528  $           .10
         Effect of Stock Options                    --                  61,998               --
                                          -----------             ------------           ------
     Diluted EPS                         $     383,649               3,949,526  $           .10
                                         =============            =============  ===============
</TABLE>

                                                       F-10

<PAGE>



As of December 31,  1997,  1996,  and 1995,  there were  outstanding  options to
purchase 340,000, 111,000, and 99,002 shares of common stock, respectively, that
were not  included  in the  computation  of Diluted  EPS  because  the  options'
exercise  prices were greater than the average market price of the common shares
or because their inclusion would have been anti-dilutive.

Pervasiveness of Estimates

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

Recent Accounting Pronouncement

In June 1997,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No. 131,  "Disclosures  About  Segments for an
Enterprise and Related  Information".  This statement  establishes new standards
for public companies to report  information about operating  segments,  products
and services,  geographic areas and major customers. This statement is effective
for periods beginning after December 15, 1997.


(4) Revolving Loan Agreements

The Bank of New York

On March 7, 1994, the Company signed a $9,500,000  Revolving Loan Agreement (the
"Agreement")  with The Bank of New  York.  The  Agreement  contains  a letter of
credit facility.  The maximum principal amount of outstanding advances under the
Agreement  cannot exceed the lesser of (1) $9,500,000 less the aggregate  amount
outstanding with respect to letters of credit (whether drawn or undrawn), or (2)
$1,000,000.  On March 21,  1997,  the  Agreement  was amended  such that certain
financial  covenants  were  deleted.  Additionally,  the  amendment  changed the
expiration date to December 31, 1997, and required that all remaining letters of
credit be terminated according to a stipulated  schedule,  but no later than the
expiration  of the  Agreement.  On March 31, 1998,  the  agreement  was extended
effective  December 31, 1997, to May 15, 1998. As of December 31, 1997,  letters
of  credit  totaling  $4,830,000  were  outstanding  under  the  Agreement.   As
outstanding  letters of credit  issued under this credit  facility  expire,  the
maximum  commitment  available under this credit facility will be reduced by the
amount of the expiring  letters of credit.  The amended  Agreement  requires the
Company  to  maintain  specified  levels  of  tangible  net  worth  through  the
expiration of the Agreement.

Congress Financial Corporation (Northwest)

The  Company has an  $11,500,000  Loan and  Security  Agreement  (the  "Congress
Agreement")  with  Congress  Financial  Corporation  (Northwest).  The  Congress
Agreement  contains a letter of credit facility  supporting letters of credit up
to $7,000,000 and a revolving loan facility that is secured by eligible accounts
receivable.  The letter of credit  facility  requires  the Company to maintain a
pledged  certificate of deposit of $1,000,000 for letters of credit  outstanding
up to $3,500,000,  unless the Company allows its cash receipts to flow through a
bank account  designated  by the  Congress  Agreement.  The  Congress  Agreement
expires  August 6, 1999. As of December 31, 1997,  the balance under the line of
credit  was  $  4,762,493  and  letters  of  credit  totaling   $5,616,000  were
outstanding, leaving a balance available to the Company of $ 1,121,507 under the
Congress Agreement.  Additionally,  the Congress Agreement restricts the payment
of dividends.




                                      F-11

<PAGE>



(5) Long-Term Obligations

Long-term obligations consisted of the following:
<TABLE>
<CAPTION>
                                                                                       December 31,
                                                                                  -----------------------
                                                                                    1997          1996
                                                                                  ---------   -----------
<S>                                                                               <C>          <C>        
Notes payable to finance companies,  interest at the "1- month"
commercial paper rate plus 3.8 percent (9.29 percent
at December 31, 1997), payable in monthly installments of $134,220
through November 1999, secured by revenue equipment                               $     ---    $ 2,899,950
     

Notes payable to a finance company,  interest at 9.5 percent
payable in monthly installments of $249,849 through
January 2000, secured by revenue equipment                                        2,250,781            ---

Notes  payable to  finance  companies,  interest  rates
ranging  from 8 to 8.05 percent,  payable in monthly 
installments ranging fro $10,285 to $51,218 through
December 2003, secured by revenue equipment                                       1,357,767      1,844,230

Payables to tax creditors, interest at applicable statutory
rates, due in monthly principle installments of $11,576
through 2000                                                                        197,916        258,910

Notes payable to a bank, interest at 9 percent,
payable in monthly installments of $3,473 through March 2000,
secured by revenue equipment                                                         42,296            ---

Mortgage payable to a bank, paid in full in January 1997                            829,073            ---
     

Other                                                                               274,217        442,582
                                                                                    -------        -------
                                                                                  7,022,927      3,374,795
                                                                                  ---------      ---------
Less Current portion                                                             (3,037,018)    (1,388,581)
                                                                                $ 3,985,909    $ 1,986,214
                                                                                ===========    ===========
</TABLE>


As of December 31, 1997, maturities of long-term obligations are as follows:

Year Ending December 31:
------------------------
1998                                    3,037,018
1999                                    2,793,133
2000                                      217,594
2001                                      202,303
2002                                      219,204
Thereafter                                553,675
                                          -------
                                       $7,022,927
                                       ==========

                                      F-12

<PAGE>



(6) Income Taxes

The components of deferred taxes are as follows:
                                                                     <TABLE>
<CAPTION>
  December 31,
                                                              --------------------------------
                                                                   1997               1996
                                                              --------------    --------------
<S>                                                           <C>              <C>            
Deferred tax assets:
Allowance for doubtful accounts                               $       412,279  $       319,359
Accrued claims payable                                              1,828,806        1,889,956
General business credit carry forward                                 574,147          574,147
Workers compensation accrual                                          290,153          204,359
Alternative minimum tax credit carry forward                          456,984          456,984
Depreciation and leases                                                  ---           422,001
Net operating loss carry forward                                    3,385,750          654,967
Other                                                                 256,999          291,808
                                                                      -------          -------
Total deferred tax assets                                           7,205,118        4,813,581
Valuation allowance                                                (6,218,822)      (4,689,624)
                                                                   ----------       ---------- 
Deferred assets, net of  
   Valuation allowance                                                986,296          123,957
Deferred taxability:
                   
   Depreciation and leases                                           (862,339)             ---
                                                             ----------------  ---------------
Net deferred tax assets                                      $        123,957  $       123,957
                                                            =================  ===============
</TABLE>

Management  believes  that,  based  upon the lack of  cumulative  profits in the
previous three years,  sufficient uncertainty exists regarding the realizability
of the deferred  tax asset such that a valuation  allowance  has been  recorded.
Accordingly,  the  deferred  tax assets  have been  reduced by an  approximately
$6,219,000  valuation  allowance at December 31,  1997.  Realization  of the net
deferred tax asset is  dependent  on  generating  sufficient  taxable  income in
future  years to support  the  ability  to use these  deductions.  Although  the
realization of the net deferred tax assets are not assured,  management believes
that it is more likely than not that all of the net  deferred tax assets will be
realized.  The  amount of the net  deferred  tax assets  considered  realizable,
however, could be reduced in the near term based upon changing conditions.

The provision  (benefit) for income taxes for the years ended December 31, 1997,
1996, and 1995 consisted of the following:
<TABLE>
<CAPTION>
                                                                1997          1996           1995
                                                           ------------ --------------   ------------
<S>                                                                       <C>             <C>        
Current:
         Federal                                                 ---      $  (590,588)    $   379,203
         State                                                 (16,021)       (86,582)        110,182
                                                           ------------ --------------   ------------
                                                               (16,021)      (677,170)        489,385
                                                           ------------  -------------   -----------
Deferred:
         Federal                                            (1,319,704)    (1,292,515)        (43,609)
         State                                                (193,473)      (189,487)        (12,671)
         Change in valuation allowance                       1,529,198      2,159,172        (181,573)
                                                             ---------      ---------        -------- 
                                                          $     16,021    $   677,170      $ (237,853)
                                                          ------------    -----------      ---------- 
                                                          $        ---    $       ---      $  251,532
                                                          ============    ===========      ==========
</TABLE>

The Company's  effective  income tax rate for the years ended December 31, 1997,
1996, and 1995 was different from the statutory  federal income tax rate for the
following reasons:
<TABLE>
<CAPTION>
                                                             1997           1996             1995
                                                             ----           ----             ----
<S>                                                          <C>            <C>               <C>  
Statutory federal income tax rate                            (35.0) %       (35.0)%           35.0%
State income taxes, net of federal benefit                    (4.6)          (4.6)             4.6
Nondeductible items:
    Amortization of goodwill                                   2.5            1.8             17.0
    Other                                                      1.7            0.9             11.6
Change in valuation allowance                                 35.4           36.8            (28.6)
                                                            --------       -------         ------- 
Effective income tax rate                                      --- %         ---- %           39.6%
                                                            ========       ---====         ---==== 
</TABLE>


                                      F-13

<PAGE>



The Company has general business credit and alternative minimum tax credit carry
forwards at December  31,  1997,  of $574,147 and  $456,984,  respectively.  For
income tax purposes,  the Company had approximately  $3,385,750 of net operating
loss carry forward at December 31, 1997.  The net  operating  loss carry forward
expires in 2012. (7) Commitments and Contingencies

Capitalized Lease Obligation

Certain  revenue  equipment  is  leased  under  capital  lease  agreements.  The
following is a summary of assets held under capital lease agreements:
<TABLE>
<CAPTION>
                                                                 December 31,
                                                          ---------------------------
                                                              1997              1996
                                                          ---------------------------
<S>                                                       <C>            <C>         
Revenue equipment.........................................$ 53,015,303   $ 67,438,725
Other    ................................................    1,325,504      1,325,504
                                                             ---------      ---------
         ...................................................54,340,807     68,764,229
Less Accumulated amortization............................  (21,486,148)   (18,910,825)
                                                           -----------    ----------- 
         .................................................$ 32,854,659   $ 49,853,404
                                                          ============   ============
</TABLE>

The following is a schedule by year of future  minimum lease  payments under the
capital  leases  together  with the value of the net minimum  lease  payments at
December 31, 1997:

Year Ending December 31:
------------------------

1998     .................................................$ 25,488,538
1999     ....................................................2,823,867
2000     ....................................................2,638,099
2001     ....................................................2,638,099
2002     .............................................       4,827,606
----                                                         ---------
Total net minimum lease payments............................38,416,209
Less Amount representing interest.........................  (4,063,515)
                                                            ---------- 
Present value of net premium lease payments.................34,352,694
Less Current portion.....................................  (23,599,973)
                                                           ----------- 
         .................................................$ 10,752,721
                                                          ============

Operating Leases

The Company is committed under noncancellable operating leases involving revenue
equipment  and   facilities.   Rent  expense  for  all   operating   leases  was
approximately  $7,548,000,  $  8,022,000  and  $12,224,000  for the years  ended
December 31, 1997, 1996, and 1995, respectively.  The following is a schedule of
future lease commitments under  noncancellable  operating leases at December 31,
1997:

Year Ending December 31:
------------------------
1998     ..................................................$ 4,208,548
1999     ....................................................2,883,724
2000     ....................................................1,779,521
2001     ..............................................        992,944
                                                          ------------
         ..................................................$ 9,864,737
                                                           ===========

The Company's operating lease payments are made in arrears. At December 31, 1997
and 1996, the Company classified  approximately $436,000 and $461,000 of accrued
operating lease payments in "Accrued  Liabilities" in the  accompanying  balance
sheets.

Letters of Credit


                                      F-14

<PAGE>



The Company had outstanding  letters of credit related to insurance coverage and
certain lease  agreements  totaling  approximately  $10,446,000  at December 31,
1997. These letters of credit mature at various times through June 30, 1998.

                                      F-15

<PAGE>



Fuel Purchase Commitments

As of December  31, 1997,  the Company had entered  into  various fuel  purchase
contracts totaling approximately  $3,600,000.  These contracts expire at various
times  through  December 31, 1998.  This  arrangement  is intended to reduce the
Company's  vulnerability  to rapid  increases in the price of fuel. In the event
fuel prices  decline,  the Company will not benefit from such reduced pricing to
the extent of its  commitment  to purchase fuel under these  contracts.  If fuel
prices decline  materially below contracted prices, the Company records the loss
in the period of decline.  As of December 31, 1997,  contracted fuel prices were
lower than market fuel prices.

Registration Rights

Pursuant  to  a  Registration  Rights  Agreement,   the  Company's  two  largest
stockholders  each have the right,  subject to certain terms and conditions,  to
require the Company to register  their shares under the  Securities  Act of 1933
for offer to sell to the public (including by way of an underwritten  offering).
These  stockholders  each  also have the  right to join in any  registration  of
securities  of the  Company  (subject  to certain  exceptions).  The  Company is
obligated  to  pay  all  expenses  (except  the   stockholders   legal  counsel,
underwriting  discounts,  commissions,  and transfer  taxes,  if any) related to
successful offerings requested by a stockholder under this agreement.

Other

The Company is the subject of various legal  actions which it considers  routine
to its transportation business activities. Management believes, after discussion
with legal  counsel,  that the  ultimate  liability  of the Company  under these
actions will not materially affect the accompanying financial statements.

The  Company  is subject to  various  restrictive  covenants  related to certain
outstanding debt and lease  agreements.  Certain lenders have reserved the right
to demand payment if, for any reason, they deem themselves insecure.  Management
does not  believe  that  these  obligations  will be called in  advance of their
scheduled maturities.  If they were to be called, management believes that these
amounts could be refinanced  with other  commercial  lenders  without  adversely
impacting the Company's results of operations or liquidity.


(8) Stockholders' Equity

Initial Public Offering of Common Stock

In  connection  with its initial  public  offering,  the Company sold  1,600,000
shares  of  common  stock.  The  proceeds  received  from the  offering,  net of
underwriting commissions and offering costs, totaled approximately $21,635,000.

Employee Stock Purchase Plan

During  December 1995,  the Company  implemented an Employee Stock Purchase Plan
("ESPP")  entitling  eligible employees of the Company to purchase 80,000 shares
of the  Company's  common stock through  payroll  deductions in an amount not to
exceed 15 percent of an  employee's  base pay. The purchase  price of the common
stock is the lesser of 85 percent of the market value of the common stock at the
beginning  or end of  each of the  one  year  offering  periods.  Employees  can
terminate their participation in an offering under the ESPP at any time prior to
the end of the  offering  period.  The ESPP  allows  for up to 26,666  shares of
common  stock (plus  unissued  shares from prior years) to be offered in each of
the years  ending  December  31,  1996,  1997 and 1998.  During  the year  ended
December 31, 1997 and December 31, 1996,  employees  purchased  22,788 and 7,748
shares, respectively, of common stock under the ESPP.





                                      F-16

<PAGE>



Stock Incentive Plan

During  December 1994, the Company adopted the PST Vans,  Inc.,  Stock Incentive
Plan  ("SIP")  with  170,000  shares  of  common  stock  reserved  for  issuance
thereunder.  The  number of  shares  reserved  under  the plan was  subsequently
revised to 370,000  during  1996.  The  Compensation  Committee  of the Board of
Directors  administers the SIP and has the discretion to determine the employees
and officers who receive awards  (incentive stock options,  non-qualified  stock
options,  stock  appreciation  rights or phantom stock awards) to be granted and
the term, vesting and exercise prices.

The Company  accounts  for this plan under APB  Opinion  No. 25,  under which no
compensation  cost has been recognized.  Had compensation  cost for the SIP been
determined  consistent with FASB Statement No. 123,  however,  the Company's net
income and earnings per share would have been reduced to the following pro forma
amounts:
         
<TABLE>
<CAPTION>
                                             1997               1996          1995
                                             ----               ----          ----
                 
<S>                                    <C>                <C>            <C>         
Net Income          As reported        $  (4,314,547)     $(5,860,765)   $    383,649
                       Pro forma          (4,519,433)      (6,009,888)       (286,372)

Basic EPS            As reported       $       (1.02)     $     (1.39)   $       0.10
                       Pro forma               (1.07)           (1.43)          (0.07)

Diluted  EPS        As reported        $       (1.02)     $     (1.39)   $       0.10
                       Pro forma               (1.07)           (1.43)          (0.07)
</TABLE>


A summary of the Company's  SIP at December 31, 1997,  1996 and 1995 and changes
during the years then ended is presented in the table and narrative below.

<TABLE>
<CAPTION>
                                               1997                     1996                        1995
                                      ----------------------   ----------------------      ----------------------
                                                    Wtd.Avg                  Wtd.Avg.                    Wtd.Avg.
                                                    Exercise                 Exercise                    Exercise
                                       Shares        Price       Shares       Price         Shares        Price
                                      --------     ---------   ---------    ---------      --------     ---------

<S>                                    <C>           <C>         <C>          <C>         <C>            <C>    
Outstanding at beginning of year       111,000       $5.89       161,000      $6.19           ---        $   ---
Granted                                233,000        3.50        14,000       3.63       161,000           6.19
Forfeited                               (4,000)       6.19       (64,000)      6.16           ---           ---
                                       -------                   -------                  -------
Outstanding at end of year             340,000        4.25       111,000       5.89       161,000           6.19
                                       =======                   =======                  =======
Exercisable at end of year              40,000        6.03        33,950       6.06        21,783           6.08
                                       =======                   =======                  =======

Weighted average fair value
  of options granted                      $2.59                               $4.43                        $4.69
</TABLE>

The 340,000  outstanding  shares at the end of 1997 have exercise prices ranging
between $3.38 and $7.38 per share,  with a weighted  average  exercise  price of
$4.25.  The grants  have a prorata  vesting  period of five years from the grant
date and an expiration  date of ten years from grant date. At December 31, 1997,
40,000 options are exercisable at a weighted average exercise price of $6.03.

The fair value of each option  granted is  estimated  on the date of grant using
the  Black-Scholes  option  pricing  model with the  following  weighted-average
assumptions  used for  grants  in 1997,  1996 and 1995  respectively:  risk-free
interest rates of 6.18%, 6.82% and 6.53%; 0% expected dividend yields;  expected
lives of 8.5 years for1997, 1996 and 1995; expected volatility of 65.00%, 56.02%
and 55.70%.



                                      F-17

<PAGE>



(9) Related Party Transactions

In March 1995, the Company  issued 8,473 shares of common stock in  satisfaction
of  outstanding  indebtedness  in the amount of $101,680 to its Chief  Executive
Officer and significant  stockholder.  This individual was an unsecured creditor
under the Plan and  elected  to take  shares of common  stock as payment of such
indebtedness as provided for under the Plan.

(10) Profit Sharing Plan

The Company  adopted a Profit  Sharing Plan (the "PSP") for the benefit of their
employees.  Under the PSP, all employees who have reached the age 20 1/2 and who
have  completed  at least six months of service with the Company are eligible to
participate.  The PSP allows  participants to make contributions to the PSP from
their   compensation.   The  Company,   at  its  option,   may  make  additional
contributions  to the  PSP  on  behalf  of  the  participants.  Under  the  PSP,
participants are fully vested in their own  contributions.  Participants  become
100 percent vested in any contributions made by the Company after seven years of
service  or upon  reaching  age 65.  The  Company  did not  make or  accrue  any
contributions to the PSP during 1997, 1996, and 1995.













                                      F-18

<PAGE>



Signatures

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

PST Vans, Inc.

Date:    March __, 1998

         By:    /s/  Kenneth R. Norton
               -----------------------------
               Kenneth R. Norton
               Chief Executive Officer

Date:    March __, 1998

         By:   /s/ Neil R. Vos
               -----------------------------
               Neil R. Vos
               Chief Financial Officer



















<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To PST Vans, Inc.:


         We  have  audited  in  accordance  with  generally   accepted  auditing
standards,  the financial  statements  for each of the three years in the period
ended December 31, 1997 of PST Vans, Inc. (a Utah corporation)  included in this
Annual Report on Form 10-K,  and have issued our report  thereon dated  February
11, 1998  (except with  respect to matters  discussed in the first  paragraph of
Note 4 as to which  the date is March  31,  1998).  Our  audit  was made for the
purpose  of forming an  opinion  on the basic  financial  statements  taken as a
whole.  Schedule II is the  responsibility  of the Company's  management  and is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and is not part of the  basic  financial  statements.  This
schedule has been subjected to the auditing  procedures  applied in the audit of
the  basic  financial  statements  and,  in our  opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.



ARTHUR ANDERSEN LLP

Salt Lake City, Utah
     February 11, 1998

                                                            S-1

<PAGE>


<TABLE>

                                                      PST VANS, INC.

                                      SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS
                                   FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                                      (in thousands)
<CAPTION>

                                                                   Additions
                                                          -----------------------------
                                         Balance at       Charged to        Charged                            Balance
                                         Beginning        Costs and         to other                            At End
         Description                     of Period         Expenses         Accounts(1)    Deductions(2)     Of Period
         -----------                     ---------         --------         -----------    -------------     ---------

For the year ended December 31, 1997:
<S>                                   <C>               <C>                <C>            <C>              <C>        
    Allowance for doubtful accounts   $           806   $         937      $      ---     $      ( 835)    $       908
                                      ===============   =============      ==========     ============     ===========

For the year ended December 31, 1996:
    Allowance for doubtful accounts   $           784    $      1,427      $      ---     $    (1,405)     $        806
                                      ===============   =============      ==========     ============     ===========

For the year ended December 31, 1995:
    Allowance for doubtful accounts    $        1,579    $      1,098      $      ---     $     (1,893)    $        784
                                      ===============   =============      ==========     ============     ===========
</TABLE>





(1) Recoveries on accounts written off.

(2) Accounts written off.





                                       S-2