Allied Holdings Reports Financial Results
DECATUR, Ga., Oct. 29, 2002 Allied Holdings, Inc. today reported results for the third quarter
ended September 30, 2002. Revenues for the third quarter of 2002 were $213.0
million compared to revenues of $204.0 million for the third quarter of 2001,
an increase of 4.4 percent. The third quarter of 2002 was the first time
Allied has posted a year-over-year increase in revenues since the second
quarter of 2000. The Company reported a net loss of $6.5 million, or $0.78
per share, during the third quarter of 2002, versus a net loss of $12.6
million, or $1.56 per share, during the third quarter last year.
Earnings before interest, taxes, depreciation and amortization, and gains
and losses on disposal of assets (EBITDA) for the third quarter of 2002 were
$12.1 million, more than triple the $3.6 million of EBITDA reported during the
third quarter last year. The significant improvement in EBITDA and reduction
in the Company's net loss was due to factors which include the ongoing
execution of Allied's turnaround initiatives related to revenue, costs and
risk management performance. The increase in revenues was primarily due to
higher OEM production in the third quarter of 2002 and organic growth from new
business obtained in 2002.
Revenues for the nine months ended September 30, 2002 were $665.2 million
versus $672.4 million for the same nine-month period in 2001, a decline of 1.1
percent. EBITDA for the first nine months of 2002 were $52.0 million, more
than seven times the $7.0 million of EBITDA reported in the same period last
year. Allied experienced a net loss of $9.6 million in the first nine months
of 2002, compared to a net loss of $37.2 million for the same period in 2001,
a 74 percent reduction in the net loss. Results for the first nine months of
2002 include a $1.7 million after-tax gain on the early extinguishment of the
Company's subordinated notes and a $4.1 million after-tax charge related to
the impairment of goodwill at the Company's Axis Group subsidiary. Results
for the first nine months of 2001 included after-tax charges of $4.6 million
for severance and workforce reduction expenses as well as an after-tax gain of
$1.5 million on the disposition of excess real estate and other assets in
Canada.
Commenting on the results, Hugh E. Sawyer, Allied's President and Chief
Executive Officer, said, "I am pleased to report that we met our objective and
narrowed our net loss for the third quarter. In fact, we reduced our net loss
by nearly half from the third quarter last year; an improvement of more than
$6 million. The third quarter is seasonally challenging to our operations due
to new vehicle manufacturing plant vacation downtime and model changeovers.
However, this year we substantially reduced the quarterly loss by remaining
focused on our turnaround initiatives during a period of increased revenue
levels while at the same time upgrading the quality and consistency of service
Allied is providing its customers. Further, our Axis subsidiary significantly
improved its performance with operating income more than doubling to $1.3
million in the third quarter this year from $0.5 million last year."
Total debt as of September 30, 2002 was $261.5 million versus total debt
of $348.5 million as of September 30, 2001, a debt reduction of 25 percent.
During the third quarter of 2002, the Company repaid $3.8 million of long-term
debt, net of borrowings. Net debt repayments for the first nine months of
2002 were $28.0 million, compared to borrowings of $23.5 million during the
first nine months of 2001. Capital expenditures were $13.3 million during the
first nine months of 2002, versus $18.3 million during the same period last
year. The Company anticipates capital expenditures of approximately $25
million in fiscal year 2002 driven primarily by Allied's new fleet
remanufacturing program.
Mr. Sawyer added, "We recently increased our EBITDA guidance for calendar
2002 to between $65-75 million, compared to $19.9 million of EBITDA in
calendar 2001, as the fundamentals of our business continue to improve and our
turnaround plan gains further traction. We expect to post a net loss of
between $8-16 million for calendar 2002, versus a net loss of $39.5 million in
calendar 2001. Although we expect to substantially reduce our net loss in
2002, Allied Holdings remains a challenging turnaround and we have much more
to accomplish. We will continue to focus the time, energy and talent of the
team at Allied around a core of key operating initiatives. Allied will remain
vigilant in its pursuit of a stable operating platform."
About Allied Holdings
Allied Holdings, Inc. is the parent company of several subsidiaries
engaged in providing distribution and transportation services of new and used
vehicles to the automotive industry. The services of Allied's subsidiaries
span the finished vehicle distribution continuum, and include car-hauling,
intramodal transport, inspection, accessorization, and dealer prep. Allied,
through its subsidiaries, is the leading company in North America specializing
in the delivery of new and used vehicles.
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, including the revised guidance as to 2002
EBITDA, the range of expected net loss for calendar 2002, and the amount of
capital expenditures for 2002, 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 extended or more
severe downturns in new vehicle production or sales, the highly competitive
nature of the automotive distribution industry, the ability of the Company to
comply with the terms of its current debt agreements, the ability of the
Company to obtain financing in the future and the Company's highly leveraged
financial position. 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.companyboardroom.com or http://www.alliedholdings.com beginning at
10:30 a.m. EST.
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2002 THIRD QUARTER EARNINGS RELEASE
(In Thousands, Except Per Share Data)
(Unaudited)
For the Three Months Ended
September 30,
2002 2001
Revenues $212,985 $204,010
Net loss ($6,482) ($12,646)
Loss per share - Basic and diluted ($0.78) ($1.56)
Weighted average common shares
outstanding 8,324 8,114
For the Nine Months Ended
September 30,
2002 2001
Revenues $665,228 $672,384
Loss before cumulative effect of
change in accounting principle ($5,529) ($37,224)
Loss per share before cumulative
effect of change in accounting principle
- Basic and diluted ($0.67) ($4.60)
Net loss ($9,621) ($37,224)
Loss per share - Basic and diluted ($1.16) ($4.60)
Weighted average common shares
outstanding 8,282 8,096
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, December 31,
2002 2001
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $24,925 $10,543
Short-term investments 62,427 64,794
Receivables, net of allowance
for doubtful accounts of
$5,538 and $11,058, respectively 60,112 72,292
Inventories 5,301 5,349
Deferred tax assets 38,344 32,403
Prepayments and other current
assets 17,384 18,921
Total current assets 208,493 204,302
PROPERTY AND EQUIPMENT, NET 185,212 214,641
OTHER ASSETS:
Goodwill, net 85,212 90,230
Other 23,650 24,219
Total other assets 108,862 114,449
Total assets $502,567 $533,392
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $3,500 $2,625
Trade accounts payable 36,212 40,232
Accrued liabilities 89,435 82,963
Total current liabilities 129,147 125,820
LONG-TERM DEBT, less current maturities 257,660 286,533
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 9,024 9,363
DEFERRED INCOME TAXES 23,743 21,383
OTHER LONG-TERM LIABILITIES 74,378 72,296
STOCKHOLDERS' EQUITY:
Common stock, no par value;
20,000 shares authorized,
8,385 and 8,274 shares
outstanding at September 30, 2002
and December 31, 2001, respectively --- ---
Additional paid-in capital 46,572 46,520
Treasury stock at cost, 139
shares at September 30, 2002
and December 31, 2001 (707) (707)
Retained deficit (28,515) (18,894)
Accumulated other comprehensive
loss, net of tax (8,735) (8,922)
Total stockholders' equity 8,615 17,997
Total liabilities and
stockholders' equity $502,567 $533,392
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
REVENUES $212,985 $204,010 $665,228 $672,384
OPERATING EXPENSES:
Salaries, wages and fringe
benefits 117,804 118,700 363,853 391,006
Operating supplies and
expenses 33,257 33,810 100,068 115,147
Purchased transportation 25,331 23,228 72,438 75,190
Insurance and claims 10,844 10,531 34,344 37,588
Operating taxes and licenses 7,638 7,857 24,731 24,990
Depreciation and amortization 13,142 15,145 40,087 45,450
Rents 1,685 1,691 4,895 5,353
Communications and utilities 1,425 1,300 5,290 5,252
Other operating expenses 2,892 3,295 7,607 10,908
Loss (gain) on disposal of
operating assets, net 367 24 (347) (2,719)
Total operating
expenses 214,385 215,581 652,966 708,165
Operating (loss)
income (1,400) (11,571) 12,262 (35,781)
OTHER INCOME (EXPENSE):
Equity in earnings of UK and
Brazil joint ventures, net
of tax --- 1,054 --- 3,593
Interest expense (7,611) (9,141) (23,343) (26,994)
Interest income 203 424 1,090 2,014
Gain on early extinguishment
of debt --- --- 2,750 ---
Other, net 100 --- (107) ---
(7,308) (7,663) (19,610) (21,387)
LOSS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (8,708) (19,234) (7,348) (57,168)
INCOME TAX BENEFIT 2,226 6,588 1,819 19,944
LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (6,482) (12,646) (5,529) (37,224)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX --- --- (4,092) ---
NET LOSS ($6,482) ($12,646) ($9,621) ($37,224)
BASIC & DILUTED LOSS PER COMMON
SHARE:
LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE
- BASIC AND DILUTED ($0.78) ($1.56) ($0.67) ($4.60)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX
- BASIC AND DILUTED --- --- ($0.49) ---
PER COMMON SHARE - BASIC AND
DILUTED ($0.78) ($1.56) ($1.16) ($4.60)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 8,324 8,114 8,282 8,096
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
For the Nine Months Ended
September 30,
2002 2001
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($9,621) ($37,224)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Gain on early extinguishment
of debt (2,750) ---
Interest expense paid in kind 746 ---
Amortization of deferred
financing costs 3,013 2,906
Depreciation and amortization 40,087 45,450
Gain on disposal of assets and
other, net (240) (2,719)
Cumulative effect of change in
accounting principle 5,194 ---
Deferred income taxes (3,671) (19,377)
Compensation expense related
to stock options and grants (210) 207
Equity in earnings of joint
ventures --- (3,593)
Amortization of Teamsters
Union contract costs 1,800 1,802
Change in operating assets and
liabilities:
Receivables, net of allowance
for doubtful accounts 12,276 18,190
Inventories 55 720
Prepayments and other
current assets 1,556 (822)
Trade accounts payable (4,057) (7,021)
Accrued liabilities 8,533 6,028
Total adjustments 62,332 41,771
Net cash provided by
operating activities 52,711 4,547
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (13,313) (18,274)
Proceeds from sale of property and
equipment 3,005 4,832
Investment in joint ventures --- (464)
Cash received from joint ventures --- 3,578
Proceeds from sale of equity
investment in joint venture 2,700 ---
Decrease (increase) in short-term
investments 2,367 (4,864)
Decrease (increase) in the cash
surrender value of life insurance 1,341 (360)
Net cash used in
investing activities (3,900) (15,552)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) additions to
revolving credit facilities, net (62,384) 23,587
Additions to long-term debt 82,750 ---
Repayment of long-term debt (46,360) (107)
Payment of deferred financing
costs (9,262) (2,663)
Proceeds from issuance of common
stock 262 303
Repurchase of common stock ---
Other, net 549 (307)
Net cash (used in)
provided by financing
activities (34,445) 20,813
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 16 68
NET INCREASE IN CASH AND CASH
EQUIVALENTS 14,382 9,876
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 10,543 2,373
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $24,925 $12,249
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2002 THIRD QUARTER EARNINGS RELEASE
OPERATING DATA
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30 SEPT 30
2002 2001 2002 2001
ALLIED HOLDINGS,
EXCLUDING AAG -
CANADA & AXIS:
REVENUES $171,849,000 $163,380,000 $529,668,000 $535,087,000
OPERATING LOSS ($3,843,000) ($10,998,000) ($1,988,000) ($39,298,000)
OPERATING RATIO 102.24% 106.73% 100.38% 107.34%
VEHICLES
DELIVERED 1,751,320 1,679,775 5,306,665 5,532,531
LOADS DELIVERED 220,012 204,464 660,921 676,815
VEHICLES PER LOAD 7.96 8.22 8.03 8.17
REVENUE PER
VEHICLE $98.13 $97.26 $99.81 $96.72
PERCENT DAMAGE
FREE DELIVERY 99.5% 99.5% 99.6% 99.5%
NUMBER OF
AVERAGE ACTIVE
RIGS 2,982 3,282 3,042 3,372
AVERAGE EMPLOYEES
DRIVERS 3,112 3,321 3,193 3,435
OTHERS 1,642 1,995 1,806 2,112
ALLIED AUTOMOTIVE
GROUP - CANADA:
REVENUES $33,830,000 $33,788,000 $114,101,000 $116,895,000
OPERATING INCOME
(LOSS) $1,123,000 ($1,075,000) $11,287,000 $2,418,000
OPERATING RATIO 96.68% 103.18% 90.11% 97.93%
VEHICLES
DELIVERED 477,325 485,498 1,667,841 1,732,844
LOADS DELIVERED 62,314 63,326 215,483 226,318
VEHICLES PER LOAD 7.66 7.67 7.74 7.66
REVENUE PER
VEHICLE $70.87 $69.59 $68.41 $67.46
PERCENT DAMAGE
FREE DELIVERY 99.6% 99.6% 99.7% 99.7%
NUMBER OF
AVERAGE ACTIVE
RIGS 747 801 741 829
AVERAGE EMPLOYEES
DRIVERS 1,108 1,109 1,106 1,196
OTHERS 462 535 490 532
AXIS GROUP:
REVENUES $7,306,000 $6,842,000 $21,459,000 $20,402,000
OPERATING INCOME $1,320,000 $502,000 $2,963,000 $1,099,000
RECONCILIATION OF
OPERATING INCOME
TO EBITDA:
CONSOLIDATED
OPERATING (LOSS)
INCOME ($1,400,000) ($11,571,000) $12,262,000 ($35,781,000)
LOSS (GAIN) ON
DISPOSAL OF
OPERATING ASSETS 367,000 24,000 (347,000) (2,719,000)
DEPRECIATION AND
AMORTIZATION 13,142,000 15,145,000 40,087,000 45,450,000
CONSOLIDATED
EBITDA $12,109,000 $3,598,000 $52,002,000 $6,950,000
