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Allied Holdings Reports Improved Third Quarter Results

DECATUR, Ga., Oct. 29, 2003 -- Allied Holdings, Inc. (AMEX:AHI) today reported improved results for the third quarter ended September 30, 2003. The Company reported revenues of $197.1 million in the third quarter of 2003, versus revenues of $213.0 million in the third quarter last year, a decline of $15.9 million or 7.5 percent. The Company experienced a net loss of $2.0 million in the third quarter of 2003, versus a net loss of $6.5 million in the third quarter of 2002, an improvement of $4.5 million, or 69.2 percent.

Adjusted EBITDA(1) for the third quarter of 2003 was $14.3 million compared to $12.1 million of Adjusted EBITDA reported during the third quarter last year, an improvement of $2.2 million, or 18.2 percent. Adjusted EBITDA improved in the third quarter of 2003 compared to the same period last year despite a drop in revenues. The revenue decline was the result of lower vehicle deliveries primarily due to lower new vehicle production in the third quarter this year compared to the third quarter last year. However, the impact from lower revenues and vehicle deliveries was offset by the economic benefit of the Company's internal initiatives. During the quarter, the Company successfully reduced the number of worker injuries and cargo claims compared to the prior year. In addition, during the third quarter, the Company took steps to offset the impact of lower revenues by reengineering terminal, linehaul, and dispatch operations to improve operating efficiency for deliveries of product in high-density zones.

Adjusted EBITDA is presented because management believes it provides useful information to investors regarding the Company's ability to generate cash flows that can be used to service debt and provide for capital expenditures. Adjusted EBITDA is also a component of certain financial covenants in Allied's debt agreements. A reconciliation of Adjusted EBITDA to Net Loss is provided in the financial schedules attached to this press release.

Commenting on the results, Hugh E. Sawyer, Allied's President and Chief Executive Officer, said, "I am pleased that improved execution yielded operational improvements during the quarter. Initiatives by management to improve quality and safety led to a $2.6 million, or 18 percent decrease in the amount expensed for cargo damage and worker injuries in the third quarter of 2003 compared to the prior year." Mr. Sawyer added, "The third quarter is seasonally challenging to our operations due to our customer's plant vacation downtime, model changeovers and product launches. Historically this has been our weakest quarter; however, we were able to adapt and adjust our operations to generate improvements in our business system."

"I am also pleased to report that this quarter we renewed our vehicle delivery agreement with American Honda Motor Company. The agreement will run through March 2004 and will renew annually thereafter," commented Mr. Sawyer. Mr. Sawyer added, "During the third quarter, we ceased delivering General Motors vehicles from our Jessup, Maryland terminal and we will cease delivering a portion of the traffic we currently transport from GM's Saturn Spring Hill, Tennessee vehicle manufacturing plant during the fourth quarter. Both pieces of traffic were non-performing, having aggregate annual revenues of $16.6 million and each generating an operating loss."

Revenues for the nine months ended September 30, 2003 were $640.8 million versus $665.2 million for the same nine-month period in 2002, a decline of 3.7 percent. Adjusted EBITDA for the first nine months of 2003 was $44.3 million compared to Adjusted EBITDA of $52.0 million during the first nine months of 2002, a decline of 14.8 percent.

Allied experienced a net loss of $4.3 million in the first nine months of 2003, versus a net loss of $9.6 million for the same period in 2002, a 55.2 percent reduction in the Company's net loss for the nine month period. Results for the first nine months of 2003 include a $2.0 million pre-tax gain from the settlement of litigation with Ryder System recorded during the third quarter of 2003. Results for the first nine months of 2002 include a $2.8 million pre-tax gain on the early extinguishment of the Company's subordinated notes and a $4.1 million after-tax charge ($5.2 million pre-tax) related to the impairment of goodwill at the Company's Axis Group subsidiary.

During the third quarter of 2003, the Company amended its Senior Credit Facility to extend the maturity, increase liquidity and adjust financial covenants. In connection with the debt amendment, the Company paid approximately $3.0 million in fees and other expenses. During the third quarter of 2003, the Company borrowed $3.0 million of long-term debt and capital expenditures were $3.1 million. For the first nine months of 2003, the Company had net borrowings of $5.8 million and capital expenditures were $11.5 million. That compares to debt repayments of $28.0 million and capital expenditures of $13.3 million during the first nine months of 2002. Long-term debt has increased in 2003 due to reduced Adjusted EBITDA, lower cash proceeds from asset sales, and increased funding of the Company's captive insurance company because of a change in primary insurance carriers. During the first nine months of 2002, the Company received $5.7 million of proceeds from the sale of assets and joint ventures. The Company anticipates capital expenditures of approximately $15-20 million in fiscal 2003 driven primarily by Allied's fleet remanufacturing program.

"We have achieved several important milestones in 2003 despite difficult external conditions. We have successfully negotiated a five-year agreement with the Teamsters in the United States, renewed our Honda contract, and amended our senior credit facility to provide more favorable financial covenants, increase availability and extend the maturity date of the facility. Moreover, effective execution of key initiatives relating to reducing worker injuries and cargo damage and improving load efficiency and driver productivity generated improved operating performance despite challenging market conditions," commented Mr. Sawyer. "Calendar 2003 promises to be an important transition year for Allied as we have not yet reached our goal of sustained positive net earnings. Nevertheless, there are signs of progress in our turnaround and we will strive to position Allied to benefit from any potential improvement in market or competitive conditions, as we remain focused on our core value drivers."

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 statements regarding improvement of the Company's operating performance, the ability of the Company to execute key initiatives, and the amount of capital expenditures for 2003, 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: www.companyboardroom.com or www.alliedholdings.com beginning at 10:30 a.m. EST.

  (1) Adjusted EBITDA represents earnings before interest, taxes,
      depreciation and amortization, gains and losses on disposal of assets,
      gain on early extinguishment of debt, foreign exchange gains and
      losses, investment income and losses, cumulative effect of accounting
      changes and other income.

                   ALLIED HOLDINGS, INC. AND SUBSIDIARIES
                     2003 THIRD QUARTER EARNINGS RELEASE
                    (In Thousands, Except Per Share Data)
                                 (Unaudited)

                                               For the Three Months Ended
                                                      September 30,
                                                  2003              2002

  Revenues                                      $197,089          $212,985

  Net loss                                       ($1,975)          ($6,482)

  Net loss per share - Basic and
   Diluted                                        ($0.23)           ($0.78)

  Weighted average common shares
   outstanding                                     8,507             8,324

                                                For the Nine Months Ended
                                                      September 30,
                                                  2003              2002

  Revenues                                      $640,759          $665,228

  Loss before cumulative effect of
   change in
   accounting principle                          ($4,267)          ($5,529)

  Net loss                                       ($4,267)          ($9,621)

  Loss per share before cumulative
   effect of change
   in accounting principle - Basic and
   Diluted                                        ($0.50)           ($0.67)

  Net loss per share - Basic and
   Diluted                                        ($0.50)           ($1.16)

  Weighted average common shares
   outstanding                                     8,459             8,282

                   ALLIED HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                               (In Thousands)

                                             September 30,      December 31,
                                                 2003               2002
                                              (Unaudited)
              ASSETS

  CURRENT ASSETS:
        Cash and cash equivalents               $83,349            $10,253
        Short-term investments                      -               60,732
        Receivables, net of allowance
         for doubtful accounts of
             $3,389 and $5,587
              respectively                       58,078             58,512
        Inventories                               4,874              5,071
        Deferred tax assets                      24,034             39,826
        Prepayments and other current
         assets                                  27,118             28,685
               Total current assets             197,453            203,079

  PROPERTY AND EQUIPMENT, NET                   158,539            176,663

  GOODWILL, NET                                  88,998             85,241

  OTHER                                          19,359             20,525
               Total assets                    $464,349           $485,508

   LIABILITIES AND STOCKHOLDERS'
              EQUITY

  CURRENT LIABILITIES:
        Current maturities of long-
         term debt                              $13,500            $10,785
        Trade accounts payable                   27,817             36,585
        Accrued liabilities                      95,677             92,881
               Total current
                liabilities                     136,994            140,251

  LONG-TERM DEBT, less current
   maturities                                   240,730            237,690

  POSTRETIREMENT BENEFITS OTHER THAN
   PENSIONS                                       6,530              7,467

  DEFERRED INCOME TAXES                          11,364             27,746

  OTHER LONG-TERM LIABILITIES                    57,397             62,040

  STOCKHOLDERS' EQUITY:
        Preferred stock, no par
         value; 5,000 shares
         authorized, none
         outstanding                                -                  -
        Common stock, no par value;
         20,000 shares authorized,
         8,722 and 8,421 shares
         outstanding at September 30,
         2003 and December 31, 2002,
         respectively                               -                  -
        Additional paid-in capital               47,373             46,801
        Treasury stock at cost, 139
         shares at September 30, 2003
         and December 31, 2002                     (707)              (707)
        Accumulated deficit                     (30,687)           (26,420)
        Accumulated other
         comprehensive loss, net of
         tax                                     (4,645)            (9,360)
               Total stockholders'
                equity                           11,334             10,314
               Total liabilities and
                stockholders' equity           $464,349           $485,508

                    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               Ended
                                        September 30,       September 30,
                                       2003      2002      2003      2002

  REVENUES                           $197,089  $212,985  $640,759  $665,228

  OPERATING EXPENSES:
       Salaries, wages and fringe
        benefits                      107,369   117,804   348,446   363,853
       Operating supplies and
        expenses                       29,960    33,257   103,108   100,068
       Purchased transportation        24,082    25,331    74,632    72,438
       Insurance and claims             8,260    10,844    29,094    34,344
       Operating taxes and licenses     6,992     7,638    22,989    24,731
       Depreciation and amortization   11,011    13,142    34,688    40,087
       Rents                            1,579     1,685     4,819     4,895
       Communications and utilities     1,745     1,425     5,213     5,290
       Other operating expenses         2,791     2,859     8,175     7,607
       Loss (gain) on disposal of
        operating assets, net             153       367       612      (347)
                 Total operating
                  expenses            193,942   214,352   631,776   652,966
                 Operating income
                  (loss)                3,147    (1,367)    8,983    12,262

  OTHER INCOME (EXPENSE):
       Interest expense                (7,366)   (7,611)  (22,120)  (23,343)
       Investment income (losses)        (398)      203     2,935     1,090
       Gain on early extinguishment
        of debt                           -         -         -       2,750
       Foreign exchange gains
        (losses), net                     (62)      124     2,386       157
       Other, net                       1,976       (57)    1,976      (264)
                                       (5,850)   (7,341)  (14,823)  (19,610)

  LOSS BEFORE INCOME TAXES AND
   CUMULATIVE
  EFFECT OF CHANGE IN ACCOUNTING
   PRINCIPLE                           (2,703)   (8,708)   (5,840)   (7,348)

  INCOME TAX BENEFIT                      728     2,226     1,573     1,819

  LOSS BEFORE CUMULATIVE EFFECT OF
   CHANGE IN ACCOUNTING PRINCIPLE      (1,975)   (6,482)   (4,267)   (5,529)

  CUMULATIVE EFFECT OF CHANGE IN
   ACCOUNTING PRINCIPLE, NET OF TAX       -         -         -      (4,092)

  NET LOSS                            ($1,975)  ($6,482)  ($4,267)  ($9,621)

  BASIC AND DILUTED LOSS PER COMMON
   SHARE:

  LOSS BEFORE CUMULATIVE EFFECT OF
   CHANGE IN ACCOUNTING PRINCIPLE      ($0.23)   ($0.78)   ($0.50)   ($0.67)

  CUMULATIVE EFFECT OF CHANGE IN
   ACCOUNTING PRINCIPLE, NET OF TAX       -         -         -      ($0.49)

  NET LOSS                             ($0.23)   ($0.78)   ($0.50)   ($1.16)

  WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING                          8,507     8,324     8,459     8,282

                    ALLIED HOLDINGS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In Thousands)
                                 (Unaudited)

                                                  For the Nine Months Ended
                                                        September 30,
                                                   2003              2002

  CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                    ($4,267)          ($9,621)
      Reconciliation of net loss to net
       cash provided by operating activities:
          Gain on early extinguishment
           of debt                                    -              (2,750)
          Interest expense paid in kind             1,065               746
          Amortization of deferred
           financing costs                          3,007             3,013
          Depreciation and amortization            34,688            40,087
          Loss (gain) on disposal of
           assets and other, net                      612               (83)
          Foreign exchange gains, net              (2,386)             (157)
          Cumulative effect of change in
           accounting principle                       -               4,092
          Deferred income taxes                    (3,402)           (2,569)
          Compensation expense related
           to stock options and grants                290              (210)
          Amortization of Teamsters
           Union contract costs                     1,000             1,800
          Change in operating assets and
           liabilities:
               Receivables, net of
                allowance for doubtful
                accounts                            1,840            12,276
               Inventories                            336                55
               Prepayments and other
                current assets                      1,913             1,556
               Short-term investments              60,732             2,367
               Trade accounts payable              (9,676)           (4,057)
               Accrued liabilities                 (4,150)            8,533
          Net change in operating assets
           and liabilities                         50,995            20,730
                  Net cash provided by
                   operating activities            81,602            55,078

  CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and
       equipment                                  (11,547)          (13,313)
      Proceeds from sale of property and
       equipment                                      287             3,005
      Proceeds from sale of equity
       investment in joint venture                    -               2,700
      Decrease in the cash surrender
       value of life insurance                          2             1,341
                  Net cash used in
                   investing activities           (11,258)           (6,267)

  CASH FLOWS FROM FINANCING ACTIVITIES:
      Additions to (repayments of)
       revolving credit facilities, net           (20,280)          (62,384)
      Additions to long-term debt                  99,875            82,750
      Repayment of long-term debt                 (74,905)          (46,360)
      Payment of deferred financing
       costs                                       (3,031)           (9,262)
      Proceeds from issuance of common
       stock                                          282               262
      Other, net                                       65               549
                  Net cash provided by
                   (used in) financing
                   activities                       2,006           (34,445)

  EFFECT OF EXCHANGE RATE CHANGES ON
   CASH AND CASH EQUIVALENTS                          746                16

  NET INCREASE IN CASH AND CASH
   EQUIVALENTS                                     73,096            14,382

  CASH AND CASH EQUIVALENTS AT BEGINNING
   OF PERIOD                                       10,253            10,543

  CASH AND CASH EQUIVALENTS AT END OF
   PERIOD                                         $83,349           $24,925

                    ALLIED HOLDINGS, INC. AND SUBSIDIARIES
                     2003 THIRD QUARTER EARNINGS RELEASE
                                OPERATING DATA
                                 (Unaudited)

                         THREE MONTHS ENDED          NINE MONTHS ENDED
                           SEPTEMBER 30,               SEPTEMBER 30,
                         2003          2002          2003          2002
  ALLIED HOLDINGS,
   EXCLUDING AAG - CANADA & AXIS:

  REVENUES           $160,121,000  $171,849,000  $504,508,000  $529,668,000

  OPERATING INCOME
   (LOSS)              $2,733,000   ($3,853,000)     $382,000   ($1,990,000)

  OPERATING RATIO          98.29%       102.24%        99.92%       100.38%

  VEHICLES DELIVERED    1,546,444     1,751,320     5,011,161     5,306,665

  LOADS DELIVERED         198,272       220,012       645,093       660,921

  VEHICLES PER LOAD          7.80          7.96          7.77          8.03

  REVENUE PER
   VEHICLE                $103.54        $98.13       $100.68        $99.81

  PERCENT DAMAGE
   FREE DELIVERY            99.7%         99.5%         99.7%         99.6%

  NUMBER OF
     AVERAGE ACTIVE RIGS    2,685         2,982         2,926         3,042
     AVERAGE EMPLOYEES
        DRIVERS             2,840         3,112         3,035         3,193
        OTHERS              1,551         1,642         1,582         1,806

  ALLIED AUTOMOTIVE GROUP - CANADA:

  REVENUES            $30,411,000   $33,830,000  $115,324,000  $114,101,000

  OPERATING INCOME
   (LOSS)               ($472,000)   $1,115,000    $6,051,000   $11,287,000

  OPERATING RATIO         101.55%        96.70%        94.75%        90.11%

  VEHICLES DELIVERED      411,998       510,357     1,591,507     1,735,319

  LOADS DELIVERED          55,269        66,765       212,768       224,142

  VEHICLES PER LOAD          7.45          7.64          7.48          7.74

  REVENUE PER
   VEHICLE                 $73.81        $66.29        $72.46        $65.75

  PERCENT DAMAGE
   FREE DELIVERY            99.7%         99.6%         99.7%         99.7%

  NUMBER OF
     AVERAGE ACTIVE RIGS      691           747           796           741
     AVERAGE EMPLOYEES
        DRIVERS               886           959           995           957
        OTHERS                403           462           404           490

  AXIS GROUP:

  REVENUES             $6,557,000    $7,306,000   $20,927,000   $21,459,000

  OPERATING INCOME       $886,000    $1,371,000    $2,550,000    $2,965,000

  CERTAIN PRIOR YEAR AMOUNTS IN THE INFORMATION PRESENTED ABOVE HAVE BEEN
  RECLASSIFIED TO CONFORM TO THE CURRENT YEAR PRESENTATION.

                    ALLIED HOLDINGS, INC. AND SUBSIDIARIES
                     2003 THIRD QUARTER EARNINGS RELEASE
                        NON-GAAP FINANCIAL INFORMATION
                                 (Unaudited)

                            THREE MONTHS ENDED        NINE MONTHS ENDED
                              SEPTEMBER 30,             SEPTEMBER 30,
                            2003         2002         2003         2002
  RECONCILIATION OF NET
   LOSS TO ADJUSTED
   EBITDA:

  NET LOSS               ($1,975,000) ($6,482,000) ($4,267,000) ($9,621,000)

  INCOME TAX BENEFIT        (728,000)  (2,226,000)  (1,573,000)  (1,819,000)

  INTEREST EXPENSE         7,366,000    7,611,000   22,120,000   23,343,000

  INVESTMENT LOSSES
   (INCOME)                  398,000     (203,000)  (2,935,000)  (1,090,000)

  GAIN ON EARLY
   EXTINGUISHMENT OF
   DEBT                          -            -            -     (2,750,000)

  FOREIGN EXCHANGE
   LOSSES (GAINS), NET        62,000     (124,000)  (2,386,000)    (157,000)

  OTHER, NET              (1,976,000)      57,000   (1,976,000)     264,000

  CUMULATIVE EFFECT OF
   CHANGE IN ACCOUNTING
   PRINCIPLE, NET OF TAX         -            -            -      4,092,000

  LOSS (GAIN) ON
   DISPOSAL OF OPERATING
   ASSETS                    153,000      367,000      612,000     (347,000)

  DEPRECIATION AND
   AMORTIZATION           11,011,000   13,142,000   34,688,000   40,087,000

  ADJUSTED EBITDA        $14,311,000  $12,142,000  $44,283,000  $52,002,000

  Adjusted EBITDA represents earnings before interest, taxes, depreciation
  and amortization, gains and losses on disposal of assets, gain on early
  extinguishment of debt, foreign exchange gains and losses, investment
  income and losses, cumulative effect of accounting changes and other
  income.  The Company's net loss is the closest financial measure in the
  Company's financial statements prepared in accordance with Generally
  Accepted Accounting Principles, ("GAAP"), in terms of comparability to
  Adjusted EBITDA.  As such, a reconciliation of Adjusted EBITDA to the net
  loss for the quarters and nine months ended September 30, 2003 and 2002
  are provided above.  Because Adjusted EBITDA is not a measurement
  determined in accordance with GAAP and is thus susceptible to varying
  calculations, Adjusted EBITDA as presented above may not be comparable to
  other similarly titled measures of other companies.