Allied Holdings Reports Fourth Quarter and
Full Year 2000 Unaudited Results
DECATUR, Ga., Feb. 13 Allied Holdings, Inc.
today reported a net loss of $7.5 million, or $0.94 per share, for the fourth
quarter ending December 31, 2000, compared with net income of $5.3 million, or
$0.67 per share, for the fourth quarter of 1999.
These results were negatively impacted by deteriorating market conditions
in the automotive industry and a non-recurring charge. Allied Holdings, whose
Allied Automotive Group subsidiary is the largest company in North America
specializing in the delivery of new and used vehicles, warned in December that
market conditions in the automotive industry would dramatically impact the
Company's fourth quarter and year-end results.
For the fourth quarter, revenues were $254 million, versus revenues of
$293 million reported during the same period last year, a decrease of
13 percent. Despite the revenue decline, the company repaid approximately
$6 million of debt during the period, net of borrowings, with free cash flow.
Fourth quarter results also included a $1.5 million charge, or $0.19 per
share, relating to workforce reduction expenses. Excluding this item, Allied
Holdings recorded a net loss of $6 million, or $0.75 per share, for the fourth
quarter 2000.
Allied Automotive Group's vehicle deliveries declined 18.5 percent, or
approximately 603,000 units, for the fourth quarter. This lost revenue was
partially offset by an increase in the revenue generated per vehicle,
primarily through fuel surcharges. Allied Holdings estimates that 80 percent
of the reduction in its vehicle delivery volume for the fourth quarter, or
about 490,000 units, was due to the production decrease caused by the
deterioration in market conditions, which at an average margin per unit would
reduce net earnings by $9.5 million. The remaining volume decline was due
primarily to the elimination of unprofitable business.
The Company noted that at the start of the fourth quarter reporting
period, industry analysts were forecasting that North American automobile
production would decline just 1 percent for the quarter. However, vehicle
manufacturing in the United States and Canada actually declined approximately
11 percent during the period. Production cuts at the Big Three automakers --
all major customers of Allied Automotive Group -- declined by approximately
5 percent in October, 15 percent in November and 25 percent in December.
"The economic slowdown across the United States, higher inventory levels
at automotive manufacturers and dealers, weather-related problems in the
Northeast and Midwest, and the rapid decline in automobile production and
shipments created a scenario in the fourth quarter that was unprecedented in
the vehicle transportation business," said Robert J. Rutland, Chairman and CEO
of Allied Holdings, Inc. "While we reacted to these factors by adjusting our
workforce, idling equipment, and reducing costs, we could not overcome the
burden of the dramatic decrease in units shipped during such a short time
period."
Full Year Results
For the full year 2000, Allied Holdings revenues were $1.07 billion,
versus revenues of $1.08 billion in 1999. The Company recorded a net loss of
$6.3 million, or $0.79 per share, compared with net income of $1.5 million, or
$0.20 per share, a year ago. These results include the previously mentioned
charge. The Company generated sufficient free cash flow during 2000 to
finance an acquisition for $8 million, and repay approximately $5 million of
debt, net of borrowings.
"Full year results were severely impacted by our disappointing fourth
quarter earnings which is usually a period with solid revenue expectations,"
Rutland said. "While we recorded positive earnings during the first
three quarters, we did not have enough of a margin to absorb the economic
softening that occurred during the fourth quarter."
The Company noted fourth quarter and year 2000 results are unaudited, and
subject to change based on completion of an audit by the Company's independent
public accountants.
2001 Outlook
The Company expects to continue being impacted by the ongoing weakness in
the automotive marketplace, primarily during the first six months of the year,
and particularly in light of the production cutbacks in North American vehicle
production announced by the Big Three manufacturers. Industry analysts expect
North American automobile production to be in the range of 15.3 million to
16.3 million units for 2001.
As a result, Allied Holdings said its Automotive Group expects vehicle
deliveries to decrease by approximately 900,000 to 1.5 million units, reducing
revenues by $85 to $145 million. Based on these estimates, the Company is
expecting in 2001 to post a net loss of $5 to $15 million for the full year,
excluding an anticipated charge of approximately $4 million in the first
quarter for costs related to executive severance and workforce reduction
expenses. The loss may be further offset by the successful implementation and
completion of several Company initiatives aimed at reducing expenses,
eliminating costs and increasing revenues.
In addition, in 2001 Allied Holdings will also limit its anticipated
annual capital expenditures to a range of between $30-$40 million. This plan
would enable the Company to generate positive cash flow of between $5 to
$15 million, in order to pay down debt. It will also provide appropriate
capital for investing in equipment and technology necessary to maintain and
re-equip its fleet to increase productivity, performance and service.
"Looking forward in 2001, we expect market conditions to be depressed for
at least the first half of the year, and we are focused on ensuring our
businesses operate in a manner that minimizes the impact of our reduced
volumes until more favorable economic conditions occur," said Rutland.
"January 2001 sales for the Big Three automakers declined when compared to
last year, and we are particularly concerned that a prolonged falloff in
automobile production would adversely impact operations and our ability to
generate revenue.
"Allied Automotive Group will continue to pursue a strategy that
establishes the company as the premier service provider in the industry, and
will work with its customers to ensure it has the proper equipment utilization
and workforce plan in place to meet their needs," said Rutland.
"Axis Group is expected to continue to develop new business opportunities
and to integrate its recent acquisitions into its existing operations to
expand its logistics and automotive supply chain services with customers both
domestically and internationally," Rutland said. "It remains our goal to
steadily increase the annual earnings that Axis Group contributes to Allied
Holdings."
Debt Compliance
The expected results as discussed above would cause the Company to be out
of technical compliance with certain financial covenants of its credit
agreements. The Company is working with its lenders to amend these covenants,
and anticipates completing this process by the end of the first quarter.
2001 Initiatives
Allied Holdings also outlined several 2001 initiatives and cost-reduction
targets designed to improve profitability, create more stable earnings, and
strengthen the company. The Company said it has already started or planned to
take the following actions:
* Overhead Reduction: Allied Holdings and its subsidiaries have
implemented a program to achieve a $25 million reduction in overhead
expenses. Targeted in the plan are workforce reductions and additional
efforts to decrease spending and eliminate discretionary costs. During
the past quarter and into the first quarter, approximately 20 percent of
its corporate staff have been eliminated, and the company will continue
to evaluate its employee base on an ongoing basis to ensure it is at the
appropriate level required to support its existing business.
* On-Going Field Operations Review: Allied Automotive Group has a long-
term strategy to meet the demands in its markets by continuing to
implement manpower and equipment utilization plans that respond to
market conditions on a weekly basis. As volume declined during the past
quarter, the Automotive Group reacted to the economic conditions by
reducing its field workforce by approximately 25 percent. As part of
this initiative, the company is putting in place systems and plans
designed to reduce costs, improve worker productivity, and create more
focused and efficient company operations.
* Margin Growth Analysis: Allied Automotive Group will review and evaluate
its current business to develop and implement alternatives that include
methods to improve margin growth and enhance revenues. As part of this
process, the company's ability to meet market demands and requirements
in the areas of speed, reliability, performance and service will be cost
analyzed.
* Strategic Operational Review: Allied Automotive Group will apply
stringent financial and strategic criteria as it analyzes its current
vehicle distribution network, to ensure the company is achieving maximum
optimization of its operations. Non-core business will be evaluated and
could be exited or divested.
* Axis Group Contribution: Axis will continue to pursue value-added
logistics functions in both the primary and secondary markets of North
America. In addition, the company will focus on expanding its European
partnership and the integration of its most recent acquisition in
Brazil. These initiatives are all part of the company's efforts to
complete the global supply chain vision of the Axis Group.
About Allied Holdings, Inc.
Allied Holdings, Inc. is the parent company of several subsidiaries
engaged in providing logistics, distribution and transportation services to
the automotive industry. The services of Allied's subsidiaries span the
entire finished vehicle distribution continuum, and include logistics,
car-hauling, intramodal transport, inspection, accessorization, and dealer
prep. Allied, through its subsidiaries, is the largest company in North
America specializing in the delivery of new and used vehicles in the global
marketplace.
Allied Automotive Group operates more than 4,600 tractor-trailers out of
121 terminal locations that crisscross the United States and Canada. The
Company partners with all major manufacturers, domestic and import, to deliver
over 11 million vehicles a year. This includes transporting vehicles to
dealers from plants, rail ramps, ports, and auctions, and providing vehicle
rail-car loading and unloading services.
Axis Group is the global management arm of Allied Holdings. With its
international service capabilities, Axis currently has operations in the
United States, Canada, Mexico, Brazil, South Africa, Europe, and the United
Kingdom. Axis Group provides logistics solutions and services to the
automotive industry, with a primary focus on outbound finished vehicle
distribution and related activities.
Statements in this press release that are not strictly historical are
"forward-looking" statements. Such statements include, without limitations,
any statements containing the words "believe," "anticipate," "estimate,"
"expect," "intend," "plan," seek," and similar expressions. Investors are
cautioned that such statements are subject to certain risks and uncertainties
that could cause actual results to differ materially. Without limitation,
these risks and uncertainties include economic recessions or downturns in new
vehicle production or sales, the highly competitive nature of the automotive
distribution industry, the possibility that the Company's lenders will not
agree to amend the covenants in its credit agreements, dependence on the
automotive industry, labor disputes involving the Company or its significant
customers, the dependence on key personnel who have been hired or retained by
the Company, the availability of strategic acquisitions or joint venture
partners, changes in regulatory requirements which are applicable to the
Company's business, risks associated with conducting business in foreign
countries, and changes in vehicle sizes and weights which may impact vehicle
deliveries per load. Investors are urged to carefully review and consider the
various disclosures made by the Company in this press release and in the
Company's reports filed with the Securities and Exchange Commission.
Note: The information in this press release will be discussed by
management today on a conference call that can be accessed at the following
links: http://www.streetevents.com or http://www.alliedholdings.com beginning at 10:30 a.m.
EST.
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2000 FOURTH QUARTER EARNINGS RELEASE
(In Thousands, Except Per Share Data)
For the Three Months Ended
December 31
2000 1999
Revenues $254,026 $293,018
Net (loss) income ($7,545) $5,245
(Loss) income per share - Basic and diluted ($0.94) $0.67
Weighted average common shares outstanding
Basic 7,988 7,842
Diluted 7,988 7,859
For the Twelve Months Ended
December 31
2000 1999
Revenues $1,069,154 $1,081,309
Net (loss) income ($6,301) $1,549
(Loss) income per share - Basic and diluted ($0.79) $0.20
Weighted average common shares outstanding
Basic 7,946 7,810
Diluted 7,946 7,851
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
December 31 December 31
2000 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $2,373 $13,984
Short-term investments 59,892 44,325
Receivables, net of allowance
for doubtful accounts 114,266 121,058
Inventories 7,415 7,949
Deferred tax assets 10,191 16,119
Prepayments and other current assets 19,355 22,182
Total current assets 213,492 225,617
PROPERTY AND EQUIPMENT, NET 259,362 287,838
OTHER ASSETS:
Goodwill, net 95,159 93,104
Other 42,526 43,361
Total other assets 137,685 136,465
Total assets $610,539 $649,920
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $109 $185
Trade accounts payable 45,975 42,931
Accrued liabilities 79,487 85,655
Total current liabilities 125,571 128,771
LONG-TERM DEBT, less current maturities 324,876 330,101
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 9,943 11,973
DEFERRED INCOME TAXES 21,414 37,409
OTHER LONG-TERM LIABILITIES 69,594 74,752
STOCKHOLDERS' EQUITY:
Common stock, no par value;
20,000 shares authorized, 8,187
and 7,997 shares outstanding at
December 31, 2000 and
December 31, 1999, respectively 0 0
Additional paid-in capital 45,990 44,437
Retained earnings 20,602 26,903
Cumulative other comprehensive
income, net of tax (6,744) (4,240)
Common stock in treasury, at
cost, 139 and 29 shares at
December 31, 2000 and
December 31, 1999, respectively (707) (186)
Total stockholders' equity 59,141 66,914
Total liabilities and
stockholders' equity $610,539 $649,920
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
2000 1999 2000 1999
(Unaudited)(Unaudited)(Unaudited)
REVENUES $254,026 $293,018 $1,069,154 $1,081,309
OPERATING EXPENSES:
Salaries, wages and
fringe benefits 142,710 156,409 584,527 585,380
Operating supplies and
expenses 48,299 49,714 189,136 185,541
Purchased transportation 24,578 26,572 104,545 103,967
Insurance and claims 11,367 10,680 47,736 48,252
Operating taxes and licenses 7,898 10,733 39,389 41,288
Depreciation and
amortization 16,538 15,405 62,224 58,647
Rents 1,957 2,352 8,570 8,974
Communications and utilities 1,783 2,571 7,333 9,060
Other operating expenses 5,292 2,736 13,826 10,317
Total operating expenses 260,422 277,172 1,057,286 1,051,426
Operating (loss) income (6,396) 15,846 11,868 29,883
OTHER INCOME (EXPENSE):
Equity in earnings of joint
ventures, net of tax 865 352 5,066 1,733
Interest expense (8,743) (8,705) (33,813) (32,001)
Interest income 1,856 776 5,509 2,112
(6,022) (7,577) (23,238) (28,156)
(LOSS) INCOME BEFORE INCOME
TAXES (12,418) 8,269 (11,370) 1,727
INCOME TAX BENEFIT (PROVISION) 4,873 (3,024) 5,069 (178)
NET (LOSS) INCOME ($7,545) $5,245 ($6,301) $1,549
PER COMMON SHARE:
BASIC ($0.94) $0.67 ($0.79) $0.20
DILUTED ($0.94) $0.67 ($0.79) $0.20
COMMON SHARES OUTSTANDING:
BASIC 7,988 7,842 7,946 7,810
DILUTED 7,988 7,859 7,946 7,851
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
For the Twelve Months Ended
December 31
2000 1999
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income (6,301) 1,549
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization 62,224 58,647
Deferred income taxes (8,419) 718
Compensation expense related
to stock options and grants 803 33
Equity in earnings of joint ventures (5,066) (1,733)
Amortization (payment) of
Teamsters Union signing bonus 2,490 (8,298)
Change in operating assets and liabilities:
Receivables, net of allowance
for doubtful accounts 8,196 (16,123)
Inventories 497 (1,090)
Prepayments and other current assets 2,716 (3,102)
Trade accounts payable 2,056 359
Accrued liabilities (12,658) (10,839)
Total adjustments 52,839 18,572
Net cash provided by
operating activities 46,538 20,121
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (32,532) (45,027)
Proceeds from sale of property and
equipment 1,234 2,749
Purchase of business, net of cash acquired (8,352) (1,879)
Investment in joint ventures (616) (306)
Cash received from joint ventures 1,509 0
Increase in short-term investments (15,567) (21,002)
Increase in the cash surrender
value of life insurance (541) (773)
Net cash used in investing activities (54,865) (66,238)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) proceeds from
issuance of long-term debt, net (5,301) 36,444
Proceeds from issuance of common stock 750 415
Repurchase of common stock (521) (186)
Proceeds from exercise of stock options 0 27
Other, net 2,477 971
Net cash (used in) provided by
financing activities (2,595) 37,671
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (689) 453
NET DECREASE IN CASH AND CASH EQUIVALENTS (11,611) (7,993)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 13,984 21,977
CASH AND CASH EQUIVALENTS AT END OF YEAR $2,373 $13,984
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2000 FOURTH QUARTER EARNINGS RELEASE
OPERATING DATA
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
2000 1999 2000 1999
ALLIED HOLDINGS,
EXCLUDING AAG -
CANADA:
REVENUES $209,612,000 $244,335,000 $882,009,000 $902,364,000
OPERATING INCOME ($9,828,000) $8,693,000 ($4,716,000) $16,015,000
OPERATING RATIO 104.69% 96.44% 100.53% 98.23%
VEHICLES DELIVERED 2,069,672 2,610,908 8,997,201 9,966,120
LOADS DELIVERED 252,920 320,620 1,108,162 1,233,014
VEHICLES PER LOAD 8.18 8.14 8.12 8.08
REVENUE PER
VEHICLE $101.28 $93.58 $98.03 $90.54
PERCENT DAMAGE
FREE DELIVERY 99.5% 99.5% 99.5% 99.5%
NUMBER OF
AVERAGE ACTIVE RIGS 3,740 4,251 3,976 4,329
AVERAGE EMPLOYEES
DRIVERS 4,633 5,020 4,931 4,937
OTHERS 2,271 2,498 2,353 2,434
ALLIED AUTOMOTIVE
GROUP - CANADA:
REVENUES $44,414,000 $48,683,000 $187,145,000 $178,945,000
OPERATING INCOME $3,432,000 $7,153,000 $16,584,000 $13,868,000
OPERATING RATIO 92.27% 85.31% 91.14% 92.25%
VEHICLES DELIVERED 587,049 649,169 2,617,093 2,516,512
LOADS DELIVERED 76,540 82,741 335,407 323,366
VEHICLES PER LOAD 7.67 7.85 7.80 7.78
REVENUE PER VEHICLE $75.66 $74.99 $71.51 $71.11
PERCENT DAMAGE
FREE DELIVERY 99.7% 99.7% 99.6% 99.6%
NUMBER OF
AVERAGE ACTIVE RIGS 861 843 834 858
AVERAGE EMPLOYEES
DRIVERS 1,276 1,214 1,248 1,193
OTHERS 533 584 559 581
