UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31,June 30, 2006

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

For the transition period from __________to__________

Commission File Number: 0-15057


P.A.M. TRANSPORTATION SERVICES, INC.
(Exact name of registrant as specified in its charter)


Delaware 71-0633135
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification no.)

297 West Henri De Tonti, Tontitown, Arkansas 72770
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (479) 361-9111

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.
Yes  ý
 
No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
 
Accelerated filer ý
 
Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  o
 
No  ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class Outstanding at May 4,July 31, 2006
Common Stock, $.01 Par Value 10,293,60710,301,607





P.A.M. TRANSPORTATION SERVICES, INC.
Form 10-Q
For The Quarter Ended March 31,June 30, 2006
Table of Contents



  
  
 
  
 
  
 
  
 
  
 
  
  
  
  
  
  
  
 
 


2


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.

Condensed Consolidated Balance Sheets
(in thousands, except share data)
 
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
 
 
March 31,
 
December 31,
  
June 30,
 
December 31,
 
 
2006
 
2005
  
2006
 
2005
 
ASSETS
 (unaudited) (see note)  (unaudited) (see note) 
Current assets:          
Cash and cash equivalents $1,466 $1,129  $1,467 $1,129 
Accounts receivable-net:              
Trade  72,555  65,433   70,767  65,433 
Other  1,341  1,392   1,268  1,392 
Inventories  775  749   836  749 
Prepaid expenses and deposits  10,730  15,095   8,943  15,095 
Marketable equity securities available-for-sale  11,684  10,999   11,883  10,999 
Income taxes refundable  64  225   360  225 
Total current assets  98,615  95,022   95,524  95,022 
              
Property and equipment:              
Land  2,674  2,674   2,674  2,674 
Structures and improvements  9,319  9,319   9,355  9,319 
Revenue equipment  257,587  250,664   256,334  250,664 
Office furniture and equipment  6,743  6,692   6,719  6,692 
Total property and equipment  276,323  269,349   275,082  269,349 
Accumulated depreciation  (91,588) (87,854)  (95,241) (87,854)
Net property and equipment  184,735  181,495   179,841  181,495 
              
Other assets:              
Goodwill  15,413  15,413   15,413  15,413 
Non-compete agreements  367  417   317  417 
Other  1,094  1,094   1,091  1,094 
Total other assets  16,874  16,924   16,821  16,924 
TOTAL ASSETS
 
$
300,224
 
$
293,441
  
$
292,186
 
$
293,441
 
              
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Current liabilities:              
Accounts payable $33,163 $22,055  $25,657 $22,055 
Accrued expenses and other liabilities  13,092  10,507   12,749  10,507 
Current maturities of long-term debt  1,376  1,859   720  1,859 
Income taxes payable  2,793  - 
Deferred income taxes-current  7,482  7,134   7,646  7,134 
Total current liabilities  57,906  41,555   46,772  41,555 
              
Long-term debt-less current portion  24,386  39,693   21,919  39,693 
Deferred income taxes-less current portion  47,262  47,197   47,334  47,197 
Other  184  234   134  234 
Total liabilities  129,738  128,679   116,159  128,679 
              
SHAREHOLDERS' EQUITY
              
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued  -  -   -  - 
Common stock, $.01 par value, 40,000,000 shares authorized; 11,350,207 and       
11,344,207 shares issued; 10,291,607 and 10,285,607 shares outstanding       
at March 31, 2006 and December 31, 2005, respectively  114  113 
Common stock, $.01 par value, 40,000,000 shares authorized; 11,352,207 and       
11,344,207 shares issued; 10,293,607 and 10,285,607 shares outstanding       
at June 30, 2006 and December 31, 2005, respectively  114  113 
Additional paid-in capital  76,595  76,429   76,840  76,429 
Accumulated other comprehensive income  2,095  1,721   2,149  1,721 
Treasury stock, at cost; 1,058,600 shares  (17,869) (17,869)  (17,869) (17,869)
Retained earnings  109,551  104,368   114,793  104,368 
Total shareholders’ equity  170,486  164,762   176,027  164,762 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
300,224
 
$
293,441
  
$
292,186
 
$
293,441
 
              
Note: The balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to condensed consolidated financial statements.
Note: The consolidated balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to condensed consolidated financial statements.Note: The consolidated balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to condensed consolidated financial statements.
 
3

Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
 
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
 
     
          
 
Three Months Ended
  
Three Months Ended
 
Six Months Ended
 
 
March 31,
  
June 30,
 
June 30,
 
 
2006
 
2005
  
2006
 
2005
 
2006
 
2005
 
OPERATING REVENUES:                    
Revenue, before fuel surcharge $90,849 $80,109  $89,692 $83,321 $180,541 $163,430 
Fuel surcharge  9,676  6,083   13,673  7,706  23,349  13,789 
Total operating revenues  100,525  86,192   103,365  91,027  203,890  177,219 
                    
OPERATING EXPENSES AND COSTS:                    
Salaries, wages and benefits  33,229  31,005   31,886  31,645  65,115  62,650 
Fuel expense  22,254  17,052   25,964  19,423  48,219  36,476 
Rent and purchased transportation  11,349  9,832   11,640  9,424  22,989  19,256 
Depreciation and amortization  8,366  7,467   8,428  7,656  16,794  15,122 
Operating supplies and expenses  5,939  5,601   6,568  5,691  12,506  11,292 
Operating taxes and license  4,057  3,954   4,114  4,050  8,171  8,004 
Insurance and claims  4,196  4,099   4,092  4,532  8,288  8,631 
Communications and utilities  694  699   629  643  1,323  1,342 
Other  1,498  1,308   1,087  1,359  2,585  2,667 
(Gain) loss on disposition of equipment  (109) 17   (33) 56  (142) 74 
Total operating expenses and costs  91,473  81,034   94,375  84,479  185,848  165,514 
                    
NET OPERATING INCOME  9,052  5,158   8,990  6,548  18,042  11,705 
                    
NON-OPERATING INCOME  57  191   116  108  173  299 
INTEREST EXPENSE  (465) (445)  (353) (474) (817) (918)
                    
NET INCOME BEFORE INCOME TAXES  8,644  4,904   8,753  6,182  17,398  11,086 
                    
FEDERAL AND STATE INCOME TAXES:                    
Current  3,271  252   3,314  498  6,585  750 
Deferred  190  1,749   198  2,004  388  3,753 
Total federal and state income taxes  3,461  2,001   3,512  2,502  6,973  4,503 
                    
NET INCOME
 
$
5,183
 
$
2,903
  
$
5,241
 
$
3,680
 
$
10,425
 
$
6,583
 
                    
EARNINGS PER COMMON SHARE:
                    
Basic
 
$
0.50
 
$
0.26
  
$
0.51
 
$
0.33
 
$
1.01
 
$
0.59
 
Diluted
 
$
0.50
 
$
0.26
  
$
0.51
 
$
0.33
 
$
1.01
 
$
0.59
 
                    
AVERAGE COMMON SHARES OUTSTANDING:
                    
Basic
  
10,288
  
11,305
   
10,293
  
11,114
  
10,290
  
11,209
 
Diluted
  
10,288
  
11,327
   
10,301
  
11,130
  
10,295
  
11,227
 
                    
                    
See notes to condensed consolidated financial statements.                    


4



Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
 
      
  
Six Months Ended
 
  
June 30,
 
  
2006
 
2005
 
OPERATING ACTIVITIES:     
Net income $10,425 $6,583 
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization  16,794  15,122 
Bad debt expense  37  257 
Stock compensation  311  - 
Non-compete agreement amortization-net of payments  -  38 
Provision for deferred income taxes  388  3,753 
(Gain) loss on sale or disposal of equipment  (142) 74 
Changes in operating assets and liabilities:       
Accounts receivable  (5,247) (13,035)
Prepaid expenses, inventories, and other assets  6,067  6,499 
Income taxes payable  (134) 122 
Trade accounts payable  2,309  (6,208)
Accrued expenses  2,242  1,607 
Net cash provided by operating activities  33,050  14,812 
        
INVESTING ACTIVITIES:       
Purchases of property and equipment  (20,992) (30,436)
Proceeds from sale or disposal of equipment  7,319  7,448 
Purchase of marketable equity securities  (227) (733)
Other  -  (20)
Net cash used in investing activities  (13,900) (23,741)
        
FINANCING ACTIVITIES:       
Borrowings under line of credit  209,928  201,856 
Repayments under line of credit  (227,504) (200,644)
Repayments of long-term debt  (1,337) (1,587)
Repurchases of common stock  -  (7,460)
Exercise of stock options  101  361 
Net cash used in financing activities  (18,812) (7,474)
        
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
  
338
  
(16,403
)
        
CASH AND CASH EQUIVALENTS-Beginning of period
  
1,129
  
19,659
 
        
CASH AND CASH EQUIVALENTS-End of period
 
$
1,467
 
$
3,256
 
        
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION-       
Cash paid during the period for:       
Interest $860 $969 
Income taxes $6,742 $750 
        
        
See notes to condensed consolidated financial statements.       


Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
 
      
  
Three Months Ended
 
  
March 31,
 
  
2006
 
2005
 
OPERATING ACTIVITIES:       
Net income $5,183 $2,903 
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization  8,366  7,467 
Bad debt expense (recoveries)  123  134 
Stock compensation  100  - 
Non-compete agreement amortization-net of payments  -  38 
Provision for deferred income taxes  190  1,749 
(Gain) loss on sale or disposal of equipment  (109) 17 
Changes in operating assets and liabilities:       
Accounts receivable  (7,193) (5,575)
Prepaid expenses, inventories, and other assets  4,339  4,600 
Income taxes payable  2,955  249 
Trade accounts payable  2,605  (10,409)
Accrued expenses  2,585  1,674 
Net cash provided by operating activities  19,144  2,847 
        
INVESTING ACTIVITIES:       
Purchases of property and equipment  (6,228) (13,151)
Proceeds from sale or disposal of equipment  3,265  3,283 
Purchase of marketable equity securities  (121) (216)
Other  -  (19)
Net cash used in investing activities  (3,084) (10,103)
        
FINANCING ACTIVITIES:       
Borrowings under line of credit  99,215  102,178 
Repayments under line of credit  (114,341) (95,861)
Borrowings of long-term debt  -  - 
Repayments of long-term debt  (664) (901)
Exercise of stock options  67  67 
Net cash (used in) provided by financing activities  (15,723) 5,483 
        
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
  
337
  
(1,773
)
        
CASH AND CASH EQUIVALENTS-Beginning of period
  
1,129
  
19,659
 
        
CASH AND CASH EQUIVALENTS-End of period
 
$
1,466
 
$
17,886
 
        
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION-       
Cash paid during the period for:       
Interest $506 $508 
Income taxes $316 $23 
        
        
See notes to condensed consolidated financial statements.       




Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)
 
                
                
  
Common Stock
Shares / Amount
 Additional Paid-In Capital Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) Treasury Stock Retained Earnings Total 
                  
Balance at December 31, 2005  10,285 $113 $76,429    $1,721 $(17,869)$104,368 $164,762 
                          
Components of comprehensive income:                         
Net income          $10,425        10,425  10,425 
Other comprehensive gain:                         
Unrealized gain on hedge,                         
net of tax of $13           19  19        19 
Unrealized gain on marketable                         
securities, net of tax of $248           409  409        409 
Total comprehensive income          $10,853             
                          
Exercise of stock options-shares issued                         
including tax benefits  8  1  100              101 
                          
Share-based compensation        311              311 
                          
Balance at June 30, 2006
  
10,293
 
$
114
 
$
76,840
    
$
2,149
 
$
(17,869
)
$
114,793
 
$
176,027
 
                          
                          
See notes to condensed consolidated financial statements.


Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)
 
                
                
  
Common Stock
Shares / Amount
 Additional Paid-In Capital Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) Treasury Stock Retained Earnings Total 
                  
Balance at December 31, 2005  10,285 $113 $76,429    $1,721 $(17,869)$104,368 $164,762 
                          
Components of comprehensive income:                         
Net income          $5,183        5,183  5,183 
Other comprehensive gain:                         
Unrealized gain on hedge,                         
net of tax of $13           19  19        19 
Unrealized gain on marketable                         
securities, net of tax of $209           355  355        355 
Total comprehensive income          $5,557             
                          
Exercise of stock options-shares issued                         
including tax benefits  6  1  66              67 
                          
Share-based compensation        100              100 
                          
Balance at March 31, 2006
  
10,291
 
$
114
 
$
76,595
    
$
2,095
 
$
(17,869
)
$
109,551
 
$
170,486
 
                          
                          
See notes to condensed consolidated financial statements.




Notes to Condensed Consolidated Financial Statements (unaudited)
March 31,June 30, 2006


NOTE A: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. Operating results for the three-monthsix-month period ended March 31,June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. For further information, refer to the consolidated financial statements and the footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2005.

Reclassifications - CertainFuel expense for the three and six months ended June 30, 2005 amounts havehas been reclassified from operating supplies and expenses to conform to the 2006 presentation.

NOTE B: DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Effective February 28, 2001, the Company entered into an interest rate swap agreement on a notional amount of $15,000,000. The pay fixed rate under the swap was 5.08%, while the receive floating rate was “1-month” LIBOR. This interest rate swap agreement terminated on March 2, 2006. Effective May 31, 2001, the Company entered into an interest rate swap agreement on a notional amount of $5,000,000. The pay fixed rate under the swap is 4.83%, while the receive floating rate is “1-month” LIBOR. This interest rate swap agreement terminates on June 2, 2006.

The Company designates the remaining interest rate swap as cash flow hedge of its exposure to variability in future cash flows resulting from interest payments indexed to “1-month” LIBOR. During the term of the interest rate swap agreement changes in future cash flows from the interest rate swaps will offset changes in interest rate payments on the first $5,000,000 of the Company’s current revolving credit facility or future “1-month” LIBOR based borrowings that reset on the last London Business Day prior to the start of the next interest period. The hedge locks the interest rate at 4.83% plus the pricing spread (currently 1.15%) for the notional amount of $5,000,000.

The interest rate swap agreement met the specific hedge accounting criteria. The measurement of hedge effectiveness is based upon a comparison of the floating-rate leg of the swap and the hedged floating-rate cash flows on the underlying liability. The effective portion of the cumulative gain or loss has been reported as a component of accumulated other comprehensive income in shareholders’ equity and will be reclassified into current earnings by June 2, 2006, the latest termination date for all current swap agreements. The December 31, 2005 balance of the net after tax deferred hedging loss in accumulated other comprehensive income (“AOCI”) related to the swap agreements was approximately $19,000 and the ending balance as of March 31, 2006 was approximately $142. The change in AOCI related to these swap agreements during the current year was approximately $19,000. Ineffectiveness related to these hedges was not significant.

NOTE C: RECENT ACCOUNTING PRONOUNCEMENTS
In FebruaryJune 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition and is effective for fiscal years beginning after December 15, 2006. Management is currently evaluating the impact that FIN 48 might have on the Company’s consolidated financial statements.

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155, Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140 (“SFAS No. 155”). SFAS No. 155 permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation in accordance with the provisions of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133”). The provisions of this statement apply to all financial instruments acquired or issued by the Company after December 31, 2006 and is not expected to have a material effect on the Company’s consolidated financial statements.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS No. 154”). SFAS No. 154 requires retrospective application to prior periods’ financial statements for changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement applies to all voluntary changes in accounting principle as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS No. 154 further requires a change in depreciation, amortization or depletion method for long-lived, non-financial assets to be accounted for as a change in accounting estimate effected by a change in accounting principle. Corrections of errors in the application of accounting principles will continue to be reported by retroactively restating the affected financial statements. The provisions of this statement are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Adoption of this statement did not have a material effect on the Company’s consolidated financial statements.


In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, (“SFAS No. 123(R)”) which replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123(R) requires compensation costs relating to share-based payment transactions be recognized in financial statements. The pro forma disclosure previously permitted under SFAS No. 123 will no longer be an acceptable alternative to recognition of expenses in the financial statements. SFAS No. 123(R) was originally to be effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005, with early adoption encouraged. In April 2005, the Securities and Exchange Commission announced the adoption of a new rule that amends the effective date of SFAS No. 123(R). The Company adopted this standard on January 1, 2006 and now reports in its financial statements the share-based compensation expense for reporting periods beginning in 2006.



NOTE D:C: MARKETABLE EQUITY SECURITIES
The Company accounts for its marketable securities in accordance with Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (“SFAS No. 115”). SFAS No. 115 requires companies to classify their investments as either trading, available-for-sale or held-to-maturity. The Company’s investments in marketable securities are classified as available-for-sale and consist of equity securities. Management determines the appropriate classification of these securities at the time of purchase and re-evaluates such designation as of each balance sheet date. During the first threesix months of 2006, there were no sales or reclassifications of marketable securities. These securities are carried at fair value, with the unrealized gains and losses, net of tax, included as a component of accumulated other comprehensive income in shareholders’ equity. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in non-operating income. Realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities, if any, are included in the determination of net income as gains (losses) on the sale of securities.

As of March 31,June 30, 2006, these equity securities had a combined original cost of approximately $8,504,000$8,655,000 and a combined fair market value of approximately $11,684,000.$11,883,000. For the threesix months ended March 31,June 30, 2006, the Company had net unrealized gains in market value of approximately $355,000,$409,000, net of deferred income taxes. As of March 31,June 30, 2006, these securities had gross unrealized gains of approximately $3,571,000$3,717,000 and gross unrealized losses of approximately $76,000.$130,000. As of March 31,June 30, 2006, the total net unrealized gain, net of deferred income taxes, in accumulated other comprehensive income was approximately $2,095,000.$2,149,000.

The following table shows the investments that were in a loss position at March 31,June 30, 2006 and 2005 and their related fair value at March 31,June 30, 2006 and 2005. These investments are all classified as available-for-sale and consist of equity securities. As of March 31,June 30, 2006 and 2005 there were no investments that had been in a continuous unrealized loss position for twelve months or longer.

 2006 2005  2006 2005 
 (in thousands)  (in thousands) 
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
  
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
 
Equity securities with unrealized losses $601 $76 $935 $172  $1,255 $130 $1,073 $140 
Totals $601 $76 $935 $172  $1,255 $130 $1,073 $140 

NOTE E:D: STOCK BASED COMPENSATION
The Company maintains a stock option plan under which incentive stock options and nonqualified stock options may be granted. The plan provides for the issuance of options to directors, officers, key employees and others. The option price under these plans is the fair market value of the stock at the date the options were granted, ranging from $16.99 to $23.22$26.73 as of March 31,June 30, 2006. At March 31,June 30, 2006, approximately 264,000734,000 shares were available for granting future options.

Outstanding incentive stock options at March 31,June 30, 2006, must be exercised within six years from the date of grant and vest in increments of 20% each year. Outstanding nonqualified stock options at March 31,June 30, 2006, must be exercised within five to ten years from the date of grant. Certain nonqualified options may not be exercised within one year of the date of grant.

In August 2002, the Company granted 300,000 performance-based variable stock options for 300,000 shares to certain key executives. The exercise price for these awards was fixed at the grant date and was equal to the fair market value of the stock on that date. On the date of grant, options for 60,000 optionsshares vested immediately and vesting of the options for the remaining 240,000 optionsshares was scheduled to occur on a straight-line basis each year from March 15, 2003 through March 15, 2008 upon meeting performance criteria. In order to meet the performance criteria, net income for each fiscal year must be at least equal to 1.05 times net income for the preceding fiscal year, unless net income for the preceding fiscal year was zero or negative, in which case net income for the fiscal year must be at least 90% of net income for the most recent year with positive income. The number of shares for which options earnedvest each fiscal year will not be known until the date the performance criteria is measured and asmeasured. As of March 31,June 30, 2006, options for 140,000 optionsshares have vested under the planthis 300,000 share option grant (including those options which immediately vested upon grant) while options for 80,000 shares have been forfeited as the performance criteria were not met for the fiscal years 2003 and 2004.



Effective January 1, 2006, the Company adopted Financial Accounting Standards BoardFASB Statement No. 123(R), Share-Based Payment, (“SFAS No. 123(R)”) utilizing the “modified prospective” method as described in SFAS No. 123(R). In the “modified prospective” method, compensation cost is recognized for all share-based payments granted after the effective date and for all unvested awards granted prior to the effective date. In accordance with SFAS No. 123(R), prior period amounts were not restated.


8


At March 31,June 30, 2006, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $1.1$1.0 million which is being amortized on a straight-line basis over the remaining vesting period. As a result, the Company expects to recognize approximately $300,000$200,000 in additional compensation expense related to unvested option awards during the remainder of 2006 and to recognize approximately $400,000 of expense in each of the years 2007 and 2008. Total pre-tax stock-based compensation expense, recognized in Salaries, wages and benefits was approximately $100,000$311,000 during the first six months of 2006 and includes approximately $111,000 recognized as a result of the annual grant of 2,000 shares to each non-employee director during the second quarter of 2006. The weighted average grant date fair value of options granted during the first six months of 2006 was $6.93. The recognition of stock-based compensation expense decreased diluted and basic earnings per common share by approximately $0.01 and $0.02 during the first quarterthree and six months of 2006.2006, respectively.

Prior to the effective date, the stock-based compensation plans were accounted for based on the intrinsic value method under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, (“APB Opinion No. 25”) and related interpretations. Pro-forma information regarding the impact of total stock-based compensation on net income and income per share for prior periods is required by SFAS No. 123(R). Such pro-forma information, determined as if the Company had accounted for its employee stock options under the fair value method during the first quarterthree and six months of 2005, is illustrated in the following table:

 Three Months Ended  Three Months Ended��Six Months Ended 
 March 31,  June 30, June 30, 
 2005  2005 2005 
 
(in thousands, except
per share data)
  (in thousands, except per share data) 
        
Net income-as reported $2,903  $3,680 $6,583 
           
Total stock-based employee compensation expense           
determined under fair value based method for all           
awards, net of related tax effects  (74)  (74) (148)
           
Pro-forma net income $2,829  $3,606 $6,435 
           
Earnings per common share:           
Basic-as reported $0.26  $0.33 $0.59 
Basic-pro-forma $0.25  $0.32 $0.57 
           
Diluted-as reported $0.26  $0.33 $0.59 
Diluted-pro-forma $0.25  $0.32 $0.57 

The fair value of the Company’s employee stock options was estimated at the date of grant using a Black-Scholes-Merton (“BSM”) option-pricing model using the following assumptions:

Three Months EndedSix Months Ended
March 31,June 30,
2006 20052006 2005
Dividend yield0% 0%0% 0%
Volatility range38.54% - 38.54% 33.86% - 38.54%33.34% - 38.54% 33.86% - 38.54%
Risk-free rate range4.38% - 4.38% 4.08% - 4.38%4.38% - 5.02% 4.08% - 4.38%
Expected life5 years 5 years2.5 years - 5 years 5 years
Fair value of options$8.89 - $9.45 $6.73 - $9.45$6.93 - $9.45 $6.73 - $9.45

The Company has never paid any cash dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future. The estimated volatility is based on the historical volatility of our stock. The risk free rate for the periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected termlife of the options representsare calculated using temporary guidance provided by the Securities and Exchange Commission which allows companies to elect a “simplified method” where the expected life is the average of the vesting period of time that options granted are expected to be outstanding.and the original contractual term. This simplified method is not available for share option grants after December 31, 2007.


9



Information related to option activity for the threesix months ended March 31,June 30, 2006 is as follows:

 Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value*  Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value* 
     (in years)        (in years)   
Outstanding-beginning of year  286,500 $22.22         286,500 $22.22       
Granted  -  -         16,000  26.73       
Exercised  6,000  11.16         (8,000) 12.62       
Cancelled/forfeited/expired  -  -         -  -       
Outstanding at March 31, 2006  280,500 $22.46  5.7 $613,925 
Outstanding at June 30, 2006  294,500 $22.73  5.4 $1,814,005 
                          
Exercisable at March 31, 2006  195,500 $22.22  5.4 $475,675 
Exercisable at June 30, 2006  209,500 $22.61  5.2 $1,315,355 
___________________________                          
* The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The per share market value of our common stock, as determined by the closing price on March 31, 2006, was $24.65.
* The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The per share market value of our common stock, as determined by the closing price on June 30, 2006, was $28.89.* The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The per share market value of our common stock, as determined by the closing price on June 30, 2006, was $28.89.

The number, weighted average exercise price and weighted average remaining contractual life of options outstanding as of March 31,June 30, 2006 and the number and weighted average exercise price of options exercisable as of March 31,June 30, 2006 follow:

Exercise Price Options Outstanding Weighted Average Remaining Contractual Term Options Exercisable Options Outstanding Weighted Average Remaining Contractual Term Options Exercisable
   (in years)     (in years)  
$16.99 12,000 3.0 12,000 10,000 2.7 10,000
$18.27 14,000 4.0 14,000 14,000 3.7 14,000
$19.88 12,500 2.5 7,500 12,500 2.3 7,500
$20.79 8,000 0.9 8,000 8,000 0.7 8,000
$22.68 14,000 1.9 14,000 14,000 1.7 14,000
$23.22 220,000 6.5 140,000 220,000 6.3 140,000
$26.73 16,000 5.0 16,000
 280,500 5.7 195,500 294,500 5.4 209,500

Cash received from option exercises totaled approximately $66,980$100,960 and $67,250$344,750 during the threesix months ended March 31,June 30, 2006 and March 31,June 30, 2005, respectively. The Company issues new shares upon option exercise.

NOTE F:E: SEGMENT INFORMATION
The Company considers the guidance provided by Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS No. 131”), in its identification of operating segments. The Company has determined that it has a total of eight operating segments whose primary operations can be characterized as either Truckload Services or Brokerage and Logistics Services, however in accordance with the aggregation criteria provided by SFAS No. 131 the Company has determined that the operations of the eight operating segments can be aggregated into a single reporting segment, motor carrier operations. Truckload Services revenues and Brokerage and Logistics Services revenues, each before fuel surcharges, were as follows:
  Three Months Ended March 31, 
  2006 2005 
  Amount  % Amount  % 
  (in thousands, except percentage data) 
              
Truckload Services revenue (1) $79,705  87.7 $70,081  87.5 
Brokerage and Logistics Services revenue (1)  11,144  12.3  10,028  12.5 
Total revenues (1) $90,849  100.0 $80,109  100.0 
              
_______________________             
(1) Before fuel surcharges.             

  Three Months Ended June 30, Six Months Ended June 30, 
  2006 2005 2006 2005 
  Amount  % Amount  Amount  Amount  % 
  (in thousands, except percentage data) 
                  
Truckload Services revenue $78,276  87.3 $73,434  88.1 $157,981  87.5 $143,514  87.8 
Brokerage and Logistics
  Services revenue
  11,416  12.7  9,887  11.9  22,560  12.5  19,916  12.2 
Total revenues $89,692  100.0 $83,321  100.0 $180,541  100.0 $163,430  100.0 
                          


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NOTE G:F: TREASURY STOCK
On April 11, 2005, the Company announced that the Board of Directors had authorized the Company to repurchase up to 600,000 shares of its common stock during the six month period ending October 11, 2005. These 600,000 shares were all repurchased by September 30, 2005. On September 6, 2005, the Company announced that its Board of Directors had authorized the Company to extend the stock repurchase program until September 6, 2006 and to include up to an additional 900,000 shares of its common stock.

The Company accounts for Treasury stock using the cost method and as of March 31,June 30, 2006, 1,058,600 shares were held in the treasury at an aggregate cost of approximately $17,869,000.

NOTE H:G: COMPREHENSIVE INCOME
Comprehensive income was comprised of net income plus or minus market value adjustments related to our interest rate swap agreement and marketable securities. The components of comprehensive income were as follows:

 Three Months Ended  Three Months Ended Six Months Ended 
 March 31,  June 30, June 30, 
 2006 2005  2006 2005 2006 2005 
 (in thousands)  (in thousands) 
                
Net income $5,183 $2,903  $5,241 $3,680 $10,425 $6,583 
                    
Other comprehensive income (loss):                    
Reclassification adjustment for losses (gains) on derivative instruments                    
included in net income accounted for as hedges, net of income taxes  18  77   -  65  18  143 
Reclassification adjustment for unrealized losses (gains) on marketable                    
securities included in net income, net of income taxes  44  -   14  -  58  - 
Change in fair value of interest rate swap agreements, net of income taxes  1  46   -  (13) 1  32 
Change in fair value of marketable securities, net of income taxes  311  (128)  40  184  351  56 
Total comprehensive income $5,557 $2,898  $5,295 $3,916 $10,853 $6,814 

NOTE I:H: EARNINGS PER SHARE
Diluted earnings per share computations assume the exercise of stock options to purchase shares of common stock. The shares assumed exercised are based on the weighted average number of shares under options outstanding during the period and only include those options for which the exercise price is less than the average share price during the period. The net additional shares issuable are calculated based on the treasury stock method and are added to the weighted average number of shares outstanding during the period.

A reconciliation of the basic and diluted income per share computations for the three and six months ended March 31,June 30, 2006 and 2005, respectively, is as follows: 
 Three Months Ended  Three Months Ended Six Months Ended 
 March 31,  June 30, June 30, 
 2006 2005  2006 2005 2006 2005 
 (in thousands, except per share data)  (in thousands, except per share data) 
                
Net income $5,183 $2,903  $5,241 $3,680 $10,425 $6,583 
                    
Basic weighted average common shares outstanding  10,288  11,305   10,293  11,114  10,290  11,209 
                    
Dilutive effect of common stock equivalents  -  22   8  16  5  18 
                    
Diluted weighted average common shares outstanding  10,288  11,327   10,301  11,130  10,295  11,227 
                    
Basic earnings per share $0.50 $0.26  $0.51 $0.33 $1.01 $0.59 
                    
Diluted earnings per share $0.50 $0.26  $0.51 $0.33 $1.01 $0.59 

Options to purchase 242,000232,500 and 259,011277,782 shares of common stock were outstanding at March 31,June 30, 2006 and 2005, respectively, but were not included in the computation of diluted earnings per share because the option price was greater than the average market price of the common shares.to do so would have an anti-dilutive effect.

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

FORWARD-LOOKING INFORMATION
Certain information included in this Quarterly Report on Form 10-Q constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may relate to expected future financial and operating results or events, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, excess capacity in the trucking industry; surplus inventories; recessionary economic cycles and downturns in customers’ business cycles; increases or rapid fluctuations in fuel prices, interest rates, fuel taxes, tolls, license and registration fees; the resale value of the Company’s used equipment and the price of new equipment; increases in compensation for and difficulty in attracting and retaining qualified drivers and owner-operators; increases in insurance premiums and deductible amounts relating to accident, cargo, workers' compensation, health, and other claims; unanticipated increases in the number or amount of claims for which the Company is self insured; inability of the Company to continue to secure acceptable financing arrangements; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors including reductions in rates resulting from competitive bidding; the ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; a significant reduction in or termination of the Company's trucking service by a key customer; and other factors, including risk factors, included from time to time in filings made by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

CRITICAL ACCOUNTING POLICIES
The Company’s management makes estimates and assumptions in preparing the condensed consolidated financial statements that affect reported amounts and disclosures therein. In the opinion of management, the accounting policies that generally have the most significant impact on the financial position and results of operations of the Company include:

Accounts Receivable. We continuously monitor collections and payments from our customers, third parties and vendors and maintain a provision for estimated credit losses based upon our historical experience and any specific collection issues that we have identified. While such credit losses have historically been within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past.

Property and Equipment. Management must use its judgment in the selection of estimated useful lives and salvage values for purposes of depreciating tractors and trailers which in some cases do not have guaranteed residual values. Estimates of salvage value at the expected date of trade-in or sale are based on the expected market values of equipment at the time of disposal which, in many cases include guaranteed residual values by the manufacturers.

Self Insurance. The Company is self-insured for health and workers’ compensation benefits up to certain stop-loss limits. Such costs are accrued based on known claims and an estimate of incurred, but not reported (IBNR) claims. IBNR claims are estimated using historical lag information and other data either provided by outside claims administrators or developed internally. This estimation process is subjective, and to the extent that future actual results differ from original estimates, adjustments to recorded accruals may be necessary.

Revenue Recognition. Revenue is recognized in full upon completion of delivery to the receiver’s location. For freight in transit at the end of a reporting period, the Company recognizes revenue prorata based on relative transit miles completed as a portion of the estimated total transit miles. Expenses are recognized as incurred.

Prepaid Tires. Tires purchased with revenue equipment are capitalized as a cost of the related equipment. Replacement tires are included in prepaid expenses and deposits and are amortized over a 24-month period. Costs related to tire recapping are expensed when incurred.

Income Taxes. Significant management judgment is required to determine the provision for income taxes and to determine whether deferred income tax assets will be realized in full or in part. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When it is more likely that all or some portion of specific deferred income tax assets will not be realized, a valuation allowance must be established for the amount of deferred income tax assets that are determined not to be realizable. A valuation allowance for deferred income tax assets has not been deemed to be necessary due to the Company’s profitable operations. Accordingly, if the facts or financial circumstances were to change, thereby impacting the likelihood of realizing the deferred income tax assets, judgment would need to be applied to determine the amount of valuation allowance required in any given period.

12



Share-Based Compensation. The Company adopted Statement of Financial Accounting Standards No. 123(R), Share-Based Payments, effective January 1, 2006, utilizing the “modified prospective” method as described in the standard. Under the “modified prospective” method, compensation cost is recognized for all share-based payments granted after the effective date and for all unvested awards granted prior to the effective date. Prior to adoption, the Company accounted for share-based payments under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. The Company uses historical volatility when estimating the expected volatility of its share price. For additional information with respect to share-based compensation, see Note ED to our consolidated financial statements.

Business Segment and Concentrations of Credit Risk. The Company operates in one reporting segment, motor carrier operations. The Company provides transportation services to customers throughout the United States and portions of Canada and Mexico. The Company performs ongoing credit evaluations and generally does not require collateral from its customers. The Company maintains reserves for potential credit losses. In view of the concentration of the Company’s revenues and accounts receivable among a limited number of customers within the automobile industry, the financial health of this industry is a factor in the Company’s overall evaluation of accounts receivable.

Business Combinations and Goodwill. Upon acquisition of an entity, the cost of the acquired entity must be allocated to assets and liabilities acquired. Identification of intangible assets, if any, that meet certain recognition criteria, is necessary. This identification and subsequent valuation requires significant judgments. The carrying value of goodwill is tested annually and as of December 31, 2005 the Company determined that there was no impairment. The impairment testing requires an estimate of the value of the Company as a whole, as the Company has determined it only has one reporting unit as defined in Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

BUSINESS OVERVIEW
The Company’s administrative headquarters are in Tontitown, Arkansas. From this location we manage operations conducted through wholly owned subsidiaries based in various locations around the United States and Canada. The operations of these subsidiaries can generally be classified into either truckload services or brokerage and logistics services. Truckload services include those transportation services in which we utilize company owned tractors or owner-operator owned tractors. Brokerage and logistics services consist of services such as transportation scheduling, routing, mode selection, transloading and other value added services related to the transportation of freight which may or may not involve the usage of company owned or owner-operator owned equipment. Both our truckload operations and our brokerage/logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. All of the Company’s operations are in the motor carrier segment.

For both operations, substantially all of our revenue is generated by transporting freight for customers and is predominantly affected by the rates per mile received from our customers, equipment utilization, and our percentage of non-compensated miles. These aspects of our business are carefully managed and efforts are continuously underway to achieve favorable results. TruckloadFor the three and six month period ended June 30, 2006, truckload services revenues, excluding fuel surcharges, represented 87.7%87.3% and 87.5% of total revenues, excluding fuel surcharges, forwith remaining revenues, excluding fuel surcharges, being generated from brokerage and logistics services. For the three monthsand six month period ended March 31, 2006June 30, 2005, truckload services revenues, excluding fuel surcharges, represented 88.1% and 2005, respectively87.8% of total revenues, excluding fuel surcharges, with remaining revenues, excluding fuel surcharges, being generated from brokerage and logistics services.

The main factors that impact our profitability on the expense side are costs incurred in transporting freight for our customers. Currently our most challenging costs include fuel, driver recruitment, training, wage and benefit costs, independent broker costs (which we record as purchased transportation), insurance, and maintenance and capital equipment costs.

In discussing our results of operations we use revenue, before fuel surcharge, (and fuel expense, net of surcharge), because management believes that eliminating the impact of this sometimes volatile source of revenue allows a more consistent basis for comparing our results of operations from period to period. During the three and six months ending March 31,June 30, 2006, approximately $13.7 million and $23.3 million, respectively, of the Company’s total revenue was generated from fuel surcharges. During the three and six months ending June 30, 2005 approximately $9.7$7.7 million and $6.1$13.8 million, respectively, of the Company’s total revenue was generated from fuel surcharges. We also discuss certain changes in our expenses as a percentage of revenue, before fuel surcharge, rather than absolute dollar changes. We do this because we believe the high variable cost nature of certain expenses makes a comparison of changes in expenses as a percentage of revenue more meaningful than absolute dollar changes.

13



RESULTS OF OPERATIONS - TRUCKLOAD SERVICES
The following table sets forth, for truckload services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated. Fuel costs are shown net of fuel surcharges.

 Three Months Ended  Three Months Ended Six Months Ended 
 March 31,  June 30, June 30, 
 2006 2005  2006 2005 2006 2005 
 (percentages)  (percentages) 
                
Operating revenues, before fuel surcharge  100.0  100.0   100.0  100.0  100.0  100.0 
                    
Operating expenses:                    
Salaries, wages and benefits  41.0  43.5   40.0  42.4  40.6  42.9 
Fuel expense, net of fuel surcharge  16.2  15.9   16.0  16.3  16.1  16.1 
Rent and purchased transportation  1.3  1.1   1.7  0.8  1.5  0.9 
Depreciation and amortization  10.5  10.6   10.7  10.4  10.6  10.5 
Operating supplies and expenses  7.4  8.0   8.4  7.7  7.9  7.9 
Operating taxes and license  5.1  5.7   5.3  5.5  5.2  5.6 
Insurance and claims  5.3  5.9   5.2  6.2  5.3  6.0 
Communications and utilities  0.8  0.9   0.8  0.8  0.8  0.9 
Other  1.7  1.6   1.2  1.6  1.4  1.6 
(Gain) loss on sale or disposal of property  (0.1) 0.1   0.0  0.1  (0.1) 0.1 
Total operating expenses  89.2  93.3   89.3  91.8  89.3  92.5 
Operating income  10.8  6.7   10.7  8.2  10.7  7.5 
Non-operating income  0.1  0.3   0.1  0.1  0.1  0.2 
Interest expense  (0.6) (0.5)  (0.4) (0.6) (0.4) (0.6)
Income before income taxes  10.3  6.5   10.4  7.7  10.4  7.1 

THREE MONTHS ENDED MARCH 31,JUNE 30, 2006 VS. THREE MONTHS ENDED MARCH 31,JUNE 30, 2005

For the quarter ended March 31,June 30, 2006, truckload services revenue, before fuel surcharges, increased 13.7%6.6% to $79.7$78.3 million as compared to $70.1$73.4 million for the quarter ended March 31,June 30, 2005. The increase was primarily due to a 12.5%9.6% increase in the average rate per total mile charged to customers from $1.22approximately $1.23 during the firstsecond quarter 2005 to $1.37approximately $1.34 during the firstsecond quarter of 2006. Also contributing toPartially offsetting the increase in revenue was an increasea decrease in the total number of miles traveled from 57.559.9 million during the firstsecond quarter of 2005 to 58.258.3 million during the firstsecond quarter of 2006.

Salaries, wages and benefits decreased from 43.5%42.4% of revenues, before fuel surcharges, in the firstsecond quarter of 2005 to 41.0%40.0% of revenues, before fuel surcharges, during the firstsecond quarter of 2006. The decrease relates primarily to a decrease in driver lease expense, which is a component of salaries, wages and benefits, as the average number of owner operators under contract decreased from 7470 during the firstsecond quarter of 2005 to 5045 during the firstsecond quarter of 2006. The decrease associated with driver lease expense was partially offset by an increase in amounts paid to the corresponding company driver replacement, and in other costs normally absorbed by the owner operator such as repairs and fuel. Also contributing to the decrease was a decrease in the claims paid and estimated reserves under the Company’s self-insured group health benefits plan and the settlement of claims for amounts less than the estimated reserve under the Company’s self-insured workers’ compensation plan. Although to a lesser degree, the effect of higher revenues without a corresponding increase in those wages with fixed cost characteristics, such as general and administrative wages, also contributed to the decrease in salaries, wages and benefits as a percentage of revenues, before fuel surcharges.

Fuel expense decreased from 16.3% of revenues, before fuel surcharges, during the second quarter of 2005 to 16.0% of revenues, before fuel surcharges, during the second quarter of 2006. Fuel costs, net of fuel surcharges, increased from $11.9 million during the second quarter of 2005 to $12.6 million during the second quarter of 2006 primarily due to higher fuel prices. During periods of rising fuel prices the Company is often able to recoup at least a portion of the increase through fuel surcharges passed along to its customers. The Company collected approximately $7.5 million in fuel surcharges during the second quarter of 2005 and $13.4 million during the second quarter of 2006. Fuel costs were also affected by the replacement of owner operators with Company drivers as discussed above.

Rent and purchased transportation increased from 0.8% of revenues, before fuel surcharges, during the second quarter of 2005 to 1.7% of revenues, before fuel surcharges, during the second quarter of 2006. The increase relates to an increase in amounts paid to third party transportation companies for intermodal services.

14


Depreciation and amortization increased from 10.4% of revenues, before fuel surcharges, during the second quarter of 2005 to 10.7% of revenues, before fuel surcharges, during the second quarter of 2006. Depreciation expense increased from $7.6 million during the second quarter of 2005 to $8.4 million during the second quarter of 2006 primarily due to higher new tractor and trailer prices coupled with decreased residual trade-in values guaranteed by the manufacturer.

Operating supplies and expenses increased from 7.7% of revenues, before fuel surcharges, during the second quarter of 2005 to 8.4% of revenues, before fuel surcharges, during the second quarter of 2006. The increase relates to an increase in amounts paid to third party driver training schools and for tractor repairs expense. Tractor repairs expense increased in part as a result of the replacement of owner operators with Company drivers as discussed above.

Insurance and claims expense decreased from 6.2% of revenues, before fuel surcharges, during the second quarter of 2005 to 5.2% of revenues, before fuel surcharges, during the second quarter of 2006. The decrease was the result of renegotiations with one of the Company’s insurance providers to change the method of determining the Company’s auto liability insurance premiums. Previously, the Company’s auto liability premiums were determined using a specified rate per one hundred dollars of revenue including fuel surcharges. This method had the unintended consequence of penalizing the Company with increased insurance costs solely from passing higher fuel costs along to its customers in the form of fuel surcharges. The method of determining the Company’s auto liability premium is now based on the number of miles traveled instead of revenue generated.

Other expenses decreased from 1.6% of revenues, before fuel surcharges, during the second quarter of 2005 to 1.2% of revenues, before fuel surcharges, during the second quarter of 2006. The decrease relates primarily to an increase in the recovery of amounts previously written-off as uncollectible revenues.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, decreased from 91.8% for the second quarter 2005 to 89.3% for the second quarter of 2006.

SIX MONTHS ENDED JUNE 30, 2006 VS. SIX MONTHS ENDED JUNE 30, 2005

For the first six months ended June 30, 2006, truckload services revenue, before fuel surcharges, increased 10.1% to $158.0 million as compared to $143.5 million for the first six months ended June 30, 2005. The increase was primarily due to an 11.0% increase in the average rate per total mile charged to customers from approximately $1.22 during the first six months 2005 to approximately $1.36 during the first six months of 2006. Partially offsetting the increase in revenue was a decrease in the total number of miles traveled from 117.4 million during the first six months of 2005 to 116.5 million during the first six months of 2006.

Salaries, wages and benefits decreased from 42.9% of revenues, before fuel surcharges, in the first six months of 2005 to 40.6% of revenues, before fuel surcharges, during the first six months of 2006. The decrease relates primarily to a decrease in driver lease expense, which is a component of salaries, wages and benefits, as the average number of owner operators under contract decreased from 72 during the first six months of 2005 to 47 during the first six months of 2006. The decrease associated with driver lease expense was partially offset by an increase in amounts paid to the corresponding company driver replacement, and in other costs normally absorbed by the owner operator such as repairs and fuel. Also contributing to the decrease was a decrease in the claims paid and estimated reserves under the Company’s self-insured group health benefits plan. Although to a lesser degree, the effect of higher revenues without a corresponding increase in those wages with fixed cost characteristics, such as general and administrative wages, also contributed to the decrease in salaries, wages and benefits as a percentage of revenues, before fuel surcharges. During January 2006 the Company implemented a driver pay increase ranging from $.01$0.01 to $.03$0.03 per mile depending on individual driver qualifications and management anticipates that salaries, wages and benefits will increase to the extent the Company is unable to pass the additional costs to customers in the form of rate increases.

Fuel expense increased from 15.9%as a percentage of revenues, before fuel surcharges, remained constant at 16.1% during both the first quartersix months of 2005 to 16.2% of revenues, beforeand 2006, however, fuel surcharges, during the first quarter of 2006. Fuel costs, net of fuel surcharges, increased from $11.2$23.1 million during the first quartersix months of 2005 to $12.9$25.5 million during the first quartersix months of 2006 primarily due to higher fuel prices. During periods of rising fuel prices the Company is often able to recoup at least a portion of the increase through fuel surcharges passed along to its customers. The Company collected approximately $6.1$13.4 million in fuel surcharges during the first quartersix months of 2005 and $9.7$22.7 million during the first quartersix months of 2006. Fuel costs were also affected by the replacement of owner operators with Company drivers as discussed above.

Rent and purchased transportation increased from 0.9% of revenues, before fuel surcharges, during the first six months of 2005 to 1.5% of revenues, before fuel surcharges, during the first six months of 2006. The increase relates to an increase in amounts paid to third party transportation companies for intermodal services.

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Depreciation and amortization decreasedincreased from 10.5% of revenues, before fuel surcharges, during the first six months of 2005 to 10.6% of revenues, before fuel surcharges, during the first quarter of 2005 to 10.5% of revenues, before fuel surcharges, during the first quartersix months of 2006. Depreciation expense increased from $7.5$15.1 million during the first quartersix months of 2005 to $8.4$16.8 million during the first quartersix months of 2006 primarily due to higher new tractor and trailer prices coupled with decreased residual trade-in values guaranteed by the manufacturer, however as a percentage of revenues, before fuel surcharges, a decrease results from the interaction of increased revenues from an increased rate per mile charged to customers and the fixed cost nature of depreciation expense.

Insurance and claims expense decreased from 5.9%6.0% of revenues, before fuel surcharges, during the first quartersix months of 2005 to 5.3% of revenues, before fuel surcharges, during the first quartersix months of 2006. The decrease was the result of renegotiations with one of the Company’s insurance providers to change the method of determining the Company’s auto liability insurance premiums. Previously, the Company’s auto liability premiums were determined using a specified rate per one hundred dollars of revenue including fuel surcharges. This method had the unintended consequence of penalizing the Company with increased insurance costs solely from passing higher fuel costs along to its customers in the form of fuel surcharges. The method of determining the Company’s auto liability premium is now based on the number of miles traveled instead of revenue generated.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, decreased from 93.3%92.5% for the first quartersix months 2005 to 89.2%89.3% for the first quartersix months of 2006.

RESULTS OF OPERATIONS - LOGISTICS AND BROKERAGE SERVICES
The following table sets forth, for logistics and brokerage services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated. Brokerage service operations occur specifically in certain divisions; however, brokerage operations occur throughout the Company in similar operations having substantially similar economic characteristics. Rent and purchased transportation, which includes costs paid to third party carriers, are shown net of fuel surcharges.

 Three Months Ended  Three Months Ended Six Months Ended 
 March 31,  June 30, June 30, 
 2006 2005  2006 2005 2006 2005 
 (percentages)  (percentages) 
                
Operating revenues, before fuel surcharge  100.0  100.0   100.0  100.0  100.0  100.0 
                    
Operating expenses:                    
Salaries, wages and benefits  4.8  5.0   4.6  5.3  4.7  5.1 
Fuel expense, net of fuel surcharge  0.0  0.0   0.0  0.0  0.0  0.0 
Rent and purchased transportation  89.2  88.2   88.1  87.4  88.6  87.8 
Depreciation and amortization  0.0  0.3   0.0  0.3  0.0  0.3 
Operating supplies and expenses  0.0  0.0   0.0  0.0  0.0  0.0 
Operating taxes and licenses  0.0  0.0 
Operating taxes and license  0.0  0.0  0.0  0.0 
Insurance and claims  0.1  0.1   0.1  0.1  0.1  0.1 
Communications and utilities  0.3  0.4   0.2  0.3  0.3  0.4 
Other  1.4  1.7   1.5  1.5  1.5  1.6 
(Gain) loss on sale or disposal of property  0.0  0.0   0.0  0.0  0.0  0.0 
Total operating expenses  95.8  95.7   94.5  94.9  95.2  95.3 
Operating income  4.2  4.3   5.5  5.1  4.8  4.7 
Non-operating income  0.0  0.0   0.0  0.0  0.0  0.0 
Interest expense  (0.5) (0.6)  (0.4) (0.6) (0.4) (0.6)
Income before income taxes  3.7  3.7   5.1  4.5  4.4  4.1 

THREE MONTHS ENDED MARCH 31,JUNE 30, 2006 VS. THREE MONTHS ENDED MARCH 31,JUNE 30, 2005

For the quarter ended March 31,June 30, 2006, logistics and brokerage services revenue, before fuel surcharges, increased 11.1%15.5% to $11.1$11.4 million as compared to $10.0$9.9 million for the quarter ended March 31,June 30, 2005. The increase was primarily the result of rate increases, and to a lesser extent, an increase in the number of loads brokered.

Rent and purchased transportation increased from 88.2%87.4% of revenues, before fuel surcharges, during the firstsecond quarter of 2005 to 89.2%88.1% of revenues, before fuel surcharges during the firstsecond quarter of 2006. The increase relates to an increase in amounts charged by third party logistics and brokerage service providers primarily as a result of higher fuel costs.

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increaseddecreased from 95.7%94.9% for the firstsecond quarter 2005 to 95.8%94.5% for the firstsecond quarter of 2006.


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SIX MONTHS ENDED JUNE 30, 2006 VS. SIX MONTHS ENDED JUNE 30, 2005

For the first six months ended June 30, 2006, logistics and brokerage services revenue, before fuel surcharges, increased 13.3% to $22.6 million as compared to $19.9 million for the first six months ended June 30, 2005. The increase was primarily the result of rate increases, and to a lesser extent, an increase in the number of loads brokered.

Rent and purchased transportation increased from 87.8% of revenues, before fuel surcharges, during the first six months of 2005 to 88.6% of revenues, before fuel surcharges during the first six months of 2006. The increase relates to an increase in amounts charged by third party logistics and brokerage service providers primarily as a result of higher fuel costs.

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, decreased from 95.3% for the first six months of 2005 to 95.2% for the first six months of 2006.

RESULTS OF OPERATIONS - COMBINED SERVICES

THREE MONTHS ENDED MARCH 31,JUNE 30, 2006 VS. THREE MONTHS ENDED MARCH 31,JUNE 30, 2005

Net income for all divisions was $5.2 million, or 5.7%5.8% of revenues, before fuel surcharge for the firstsecond quarter of 2006 as compared to $2.9$3.7 million or 3.6%4.4% of revenues, before fuel surcharge for the firstsecond quarter of 2005. The increase in net income combined with the effect of treasury stock repurchases resulted in an increase in diluted earnings per share to $0.50$0.51 for the firstsecond quarter of 2006 compared to $0.26$0.33 for the second quarter of 2005.

SIX MONTHS ENDED JUNE 30, 2006 VS. SIX MONTHS ENDED JUNE 30, 2005

Net income for all divisions was $10.4 million, or 5.8% of revenues, before fuel surcharge for the first quartersix months of 2006 as compared to $6.6 million or 4.0% of revenues, before fuel surcharge for the first six months of 2005. The increase in net income combined with the effect of treasury stock repurchases resulted in an increase in diluted earnings per share to $1.01 for the first six months of 2006 compared to $0.59 for the first six months of 2005.

LIQUIDITY AND CAPITAL RESOURCES
The growth of our business has required, and will continue to require, a significant investment in new revenue equipment. Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, issuances of equity securities, and borrowings under our lines of credit.

During the first threesix months of 2006, we generated $19.1$33.0 million in cash from operating activities. Investing activities used $3.1$13.9 million in cash in the first threesix months of 2006. Financing activities used $15.7$18.8 million in cash in the first threesix months of 2006.

Our primary use of funds is for the purchase of revenue equipment. We typically use our existing lines of credit on an interim basis, proceeds from the sale or trade of equipment, and cash flows from operations, to finance capital expenditures and repay long-term debt. During the first threesix months of 2006, we utilized cash on hand and our lines of credit to finance revenue equipment purchases of approximately $6.1$20.7 million.

Occasionally we finance the acquisition of revenue equipment through installment notes with fixed interest rates and terms ranging from 36 to 48 months, however as of March 31,June 30, 2006, we had no outstanding indebtedness under such installment notes.

In order to maintain our tractor and trailer fleet count it is often necessary to purchase replacement units and place them in service before trade units are removed from service. The timing difference created during this process often requires the Company to pay for new units without any reduction in price for trade units. In this situation, the Company later receives payment for the trade units as they are delivered to the equipment vendor and have passed vendor inspection. During the threesix months ended March 31,June 30, 2006, the Company received approximately $2.5$5.8 million for tractors delivered for trade and expects to receive approximately $13.6$7.8 million during the remainder of the year.


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During the remainder of the year, we expect to purchase approximately 411235 new tractors and approximately 450 trailers while continuing to sell or trade older equipment, which we expect to result in net capital expenditures of approximately $31.4$22.1 million. Management believes we will be able to finance our near term needs for working capital over the next twelve months, as well as acquisitions of revenue equipment during such period, with cash balances, cash flows from operations, and borrowings believed to be available from financing sources. We will continue to have significant capital requirements over the long-term, which may require us to incur debt or seek additional equity capital. The availability of additional capital will depend upon prevailing market conditions, the market price of our common stock and several other factors over which we have limited control, as well as our financial condition and results of operations. Nevertheless, based on our recent operating results, current cash position, anticipated future cash flows, and sources of financing that we expect will be available to us, we do not expect that we will experience any significant liquidity constraints in the foreseeable future.

We maintain a $20.0 million revolving line of credit and a $30.0 million revolving line of credit (Line A and Line B, respectively) with separate financial institutions. Amounts outstanding under Line A bear interest at LIBOR (determined as of the first day of each month) plus 1.40%, (6.03% (6.51% at March 31,June 30, 2006), are secured by our accounts receivable and mature on May 31, 2007.2007, however the Company has the intent and ability to extend the terms of this line of credit for an additional one year period until May 31, 2008. At March 31,June 30, 2006 outstanding advances on line A were approximately $9.9$7.4 million, including $310,000 in letters of credit, with availability to borrow $10.1$12.6 million. Amounts outstanding under Line B bear interest at LIBOR (determined on the last day of the previous month) plus 1.15%, (5.81% (6.29% at March 31,June 30, 2006), are secured by revenue equipment and mature on June 30, 2007.2007, however the Company has the intent and ability to extend the terms of this line of credit for an additional one year period until June 30, 2008. At March 31,June 30, 2006, $18.1 million, including $5.6 million in letters of credit were outstanding under Line B with availability to borrow $11.9 million. In an effort to reduce interest rate risk associated with these floating rate facilities, we have entered into an interest rate swap agreement in an aggregate notional amount of $5.0 million. For additional information regarding the interest rate swap agreement, see Note B to the condensed consolidated financial statements.

Trade accounts receivable at March 31,June 30, 2006 increased approximately $7.1$5.3 million as compared to December 31, 2005. Approximately $3.8 million of theThe increase relates to the timing of paymentsresulted from a customer which is normally received by the end of the quarter but was not received until after March 31, 2006. The remaining increase was related to a general increase in revenues which flow through our accounts receivable account.


Prepaid expenses and deposits at March 31,June 30, 2006 decreased approximately $4.4$6.2 million as compared to December 31, 2005. The decrease reflects the amortization of prepaid tractor and trailer license fees and auto liability insurance premiums. In December 2005 approximately $2.8 million of the 2006 license fees and approximately $3.0 million of the 2006 auto liability insurance premiums were paid in advance. These prepaid expenses will be amortized to expense through the remainder of the year.

Accounts payable at March 31,June 30, 2006 increased approximately $11.1$3.6 million as compared to December 31, 2005. Approximately $8.5$1.3 million of the increase is related to an increase in amounts payable to vendors for tractors received by the Company before the end of the period for which payment was not due until the next period. The net increase also reflects thean increase of approximately $2.5$1.0 million in amounts accrued for fuel purchases.third party commissions and approximately $1.4 million in amounts accrued under employee bonus plans.

Accrued expenses and other liabilities at March 31,June 30, 2006 increased approximately $2.6$2.2 million as compared to December 31, 2005. The increase is primarily related to an increase in amounts accrued at the end of the period for employee wages and benefits which can vary significantly throughout the year depending on many factors, including the timing of actual date employees are paid in relation to the last day of the reporting period.

Income taxes payable at March 31, 2006 increased approximately $2.8 million as compared to December 31, 2005. This amount is primarily composed of federal and state income taxes that are payable for the current period with a payment due date after March 31, 2006.

Long-term debt at March 31,June 30, 2006 decreased approximately $15.3$17.8 million as compared to December 31, 2005. The decrease is primarily related to a decrease in the balance due on the Company’s lines of credit at March 31,June 30, 2006 as compared to December 31, 2005. During the first threesix months of 2006 the Company repaid approximately $15.1$17.6 million more than it borrowed under its lines of credit using idle cash and cash generated from operating activities.

NEW ACCOUNTING PRONOUNCEMENTS
See Note CB to the condensed consolidated financial statements for a description of the most recent accounting pronouncements and their impact, if any, on the Company.


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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our primary market risk exposures include equity price risk, interest rate risk, and commodity price risk (the price paid to obtain diesel fuel for our tractors). The potential adverse impact of these risks and the general strategies we employ to manage such risks are discussed below.

The following sensitivity analyses do not consider the effects that an adverse change may have on the overall economy nor do they consider additional actions we may take to mitigate our exposure to such changes. Actual results of changes in prices or rates may differ materially from the hypothetical results described below.

Equity Price Risk
We hold certain actively traded marketable equity securities which subjects the Company to fluctuations in the fair market value of its investment portfolio based on current market price. The recorded value of marketable equity securities increased to $11.7$11.9 million at March 31,June 30, 2006 from $11.0 million at December 31, 2005. The increase reflects additional purchases of approximately $121,000$227,000 during the first threesix months of 2006 and an increase in the fair market value of approximately $564,000$657,000 during the first threesix months of 2006. A 10% decrease in the market price of our marketable equity securities would cause a corresponding 10% decrease in the carrying amounts of these securities, or approximately $1.2 million. For additional information with respect to the marketable equity securities, see Note DC to our consolidated financial statements.

Interest Rate Risk
Our two lines of credit each bear interest at a floating rate equal to LIBOR plus a fixed percentage. Accordingly, changes in LIBOR, which are effected by changes in interest rates, will affect the interest rate on, and therefore our costs under, the lines of credit. In an effort to manage the risks associated with changing interest rates, we entered into interest rate swap agreements effective February 28, 2001 and May 31, 2001, on notional amounts of $15,000,000 and $5,000,000, respectively. The “pay fixed rates” under the $15,000,000 and $5,000,000 swap agreements are 5.08% and 4.83%, respectively. The “receive floating rate” for both swap agreements iswas “1-month” LIBOR. The interest rate swap agreement on the notional amount of $15,000,000 terminated on March 2, 2006 while the interest rate swap agreement on the notional amount of $5,000,000 will terminateterminated on June 2, 2006. Assuming $20.0 million of variable rate debt was outstanding under Line “A” and not covered by a hedge agreement for a full fiscal year, a hypothetical 100 basis point increase in LIBOR would result in approximately $200,000 of additional interest expense. For additional information with respect to the interest rate swap agreements, see Note B to our condensed consolidated financial statements.

expense

Commodity Price Risk
Prices and availability of all petroleum products are subject to political, economic and market factors that are generally outside of our control. Accordingly, the price and availability of diesel fuel, as well as other petroleum products, can be unpredictable. Because our operations are dependent upon diesel fuel, significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition. Based upon our 2005 fuel consumption, a 10% increase in the average annual price per gallon of diesel fuel would increase our annual fuel expenses by $8.1 million.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures. In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), the Company's management evaluated, with the participation of the Company's President and Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31,June 30, 2006. Based upon that evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures were effective as of March 31,June 30, 2006 so that material information relating to the Company, including its consolidated subsidiaries, was made known to them by others within those entities, particularly during the period in which this quarterly report on Form 10-Q was being prepared.

Changes in internal controls over financial reporting. There was no change in the Company's internal control over financial reporting that occurred during the quarter ended March 31,June 30, 2006 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.



PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The nature of our business routinely results in litigation, primarily involving claims for personal injuries and property damage incurred in the transportation of freight. We believe that all such routine litigation is adequately covered by insurance and that adverse results in one or more of those cases would not have a material adverse effect on our financial condition.

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

Our annual meeting of stockholders was held on May 24, 2006. The matters voted on at the meeting and the votes cast with respect to each matter were as follows:
   Votes Votes Broker
   FOR WITHHELD NON-VOTES
       
(1)Proposal to increase the size of the Board of Directors from eight members to nine members9,886,188 117,512 0
        
(2)Proposal to elect nine directors:
  Frederick P. Calderone9,176,533 827,167 0
  Frank L. Conner9,933,683 70,017 0
  Thomas H. Cooke9,888,632 115,068 0
  Manual J. Moroun9,158,770 844,930 0
  Matthew T. Moroun9,103,122 900,578 0
  Daniel C. Sullivan9,886,768 116,932 0
  Robert W. Weaver9,149,130 854,570 0
  Charles F. Wilkins9,933,483 70,217 0
  Christopher L. Ellis9,798,785 204,915 0
        
(3)Proposal to amend the Bylaws to authorize the Board of Directors, in addition to the stockholders, to establish the number of directors that constitute the full Board of Directors8,193,253 1,810,447 0
        
(4)Proposal to approve the 2006 Stock Option Plan8,932,454 165,876 905,370

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K:
3.1Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Company's Form 10-Q filed on May 15, 2002.)2002)
3.2Amended and Restated By-Laws of the Registrant
10.12006 Stock Option Plan (incorporated by reference to Appendix B of the Company’s proxy statement for its May 24, 2006 annual meeting of stockholders that was filed with the Securities and Exchange Commission on April 19, 2006)
10.2Executive Incentive Plan
10.3Non-Qualified Stock Option Agreement for Non-Employee Director stock options that are granted under the 2006 Stock Option Plan (incorporated by reference to Exhibit 3.210.2 of the Company's Form 10-Q8-K filed on May 15, 2002.)31, 2006)
10.4Employment Agreement dated July 10, 2006 between the Registrant and Robert W. Weaver (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on July 28, 2006)
10.5Employment Agreement dated June 1, 2006 between the Registrant and W. Clif Lawson (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on July 28, 2006)
10.6Employment Agreement dated June 1, 2006 between the Registrant and Larry J. Goddard (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on July 28, 2006)
31.1Rule 13a-14(a) Certification of Principal Executive Officer
31.2Rule 13a-14(a) Certification of Principal Financial Officer
32.1Section 1350 Certification of Chief Executive Officer
32.2Section 1350 Certification of Chief Financial Officer



SIGNATURES



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


 P.A.M. TRANSPORTATION SERVICES, INC.
  
  
Dated: May 5,August 3, 2006
By: /s/ Robert W. Weaver
 Robert W. Weaver
 President and Chief Executive Officer
 (principal executive officer)
  
Dated: May 5,August 3, 2006
By: /s/ Larry J. Goddard
 Larry J. Goddard
 Vice President-Finance, Chief Financial
 Officer, Secretary and Treasurer
 (principal accounting and financial officer)
  




P.A.M. TRANSPORTATION SERVICES, INCINC..
Index to Exhibits to Form 10-Q



Exhibit NumberExhibit Description
   
3.1 Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Company's Form 10-Q filed on May 15, 2002.)
 
10.12006 Stock Option Plan (incorporated by reference to Appendix B of the Company’s proxy statement for its May 24, 2006 annual meeting of stockholders that was filed with the Securities and Exchange Commission on April 19, 2006)
10.3Non-Qualified Stock Option Agreement for Non-Employee Director stock options that are granted under the 2006 Stock Option Plan (incorporated by reference to Exhibit 3.210.2 of the Company's Form 10-Q8-K filed on May 15, 2002.)31, 2006)
10.4Employment Agreement dated July 10, 2006 between the Registrant and Robert W. Weaver (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on July 28, 2006)
10.5Employment Agreement dated June 1, 2006 between the Registrant and W. Clif Lawson (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on July 28, 2006)
10.6Employment Agreement dated June 1, 2006 between the Registrant and Larry J. Goddard (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on July 28, 2006)
 
 
 
 


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