Allied Holdings Reports First Quarter Results
DECATUR, Ga., May 4, 2004 -- Allied Holdings, Inc. (AMEX:AHI) today reported results for the first quarter ended March 31, 2004. The Company reported revenues of $212.2 million in the first quarter of 2004, versus revenues of $213.6 million in the first quarter of 2003. The Company experienced a net loss of $9.0 million in the first quarter of 2004, versus a net loss of $5.7 million in the first quarter of 2003.
The increase in the Company's net loss in first quarter of 2004 versus the first quarter of 2003 was caused by a decrease in the Company's Adjusted EBITDA, foreign exchange losses and the Company no longer recording tax benefits related to net losses. These items were partially offset by lower depreciation expense and gains on the sale of property during the quarter.
Earnings before interest, taxes, depreciation and amortization, and gains and losses on disposal of assets (Adjusted EBITDA) for the first quarter of 2004 were $7.8 million compared to $10.6 million of Adjusted EBITDA reported during the first quarter last year. Adjusted EBITDA 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. A reconciliation of Adjusted EBITDA to net loss is provided in the financial schedules attached to this press release.
The decline in Adjusted EBITDA in the first quarter of 2004 was caused in part by a 1.7% reduction in quarterly vehicle deliveries caused primarily by lower OEM shipment levels in the month of January. The Company experienced a 15.4% decline in vehicle deliveries in January 2004 versus January 2003 and a 12.3% drop in January 2004 revenues versus the prior year January period. During the quarter the Company also experienced higher risk management expenses related to costs for worker injuries, increased costs for benefit and pension contributions related to its U. S. Teamster contract, and certain operating inefficiencies caused by adverse weather conditions and unexpected OEM production variability. The Company also recorded severance costs related to ongoing efforts to eliminate non-strategic positions. In addition, Adjusted EBITDA declined in the first quarter as a result of the financial impact of the terms of the previously disclosed General Motors' contract renewal. These increased costs were partially offset by lower operating expenses including general and administrative costs, lower cargo claims expense and organic growth in both the new car and used car sectors.
Hugh E. Sawyer, Allied's President and Chief Executive Officer, said, "Although revenues and vehicle deliveries were down slightly in the first quarter, our financial performance was also adversely impacted by other significant external events during the first quarter. Volumes in the month of January were unexpectedly soft and OEM production levels were sporadic and difficult to forecast with a high degree of accuracy. Inclement weather conditions also adversely affected terminal productivity. While lost time days and lost time injuries improved slightly compared to the first quarter of 2003, medical and benefit costs relating to workers' injuries increased $2.2 million in the first quarter of 2004 compared to 2003 due to inflationary trends in medical costs and an increase in the costs required to settle certain prior year claims. This combination of factors made the first quarter particularly challenging although our operations did ultimately improve as volumes increased during the quarter."
During the first quarter of 2004, the Company borrowed $11.7 million under its revolving credit facility, compared to borrowings of $6.6 million in the first quarter of 2003. The increase in borrowings resulted in part from lower Adjusted EBITDA compared to the first quarter last year and increased working capital requirements, which were partially offset by lower capital spending in 2004 related to the Company's fleet remanufacturing program. Capital expenditures were $4.8 million in the first quarter of 2004 compared to $5.9 million in the first quarter last year.
Mr. Sawyer added, "Although we are not satisfied with the results of our first quarter, the Company is financially stable and there are signs of progress in the underlying business. We are hopeful that external conditions will be more favorable in 2004. Our aspiration is to build upon the good work that has already been done."
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," "hopeful," "potentially," and similar expressions. Investors are cautioned that such statements, including statements regarding improvement in the company's underlying business or the impact of external events on the Company's financial performance. 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, increases in light truck and sport utility vehicles delivered, increases in medical and benefit costs, operating inefficiencies, OEM production variability and 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. EDT.
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2004 FIRST QUARTER EARNINGS RELEASE
(In Thousands, Except Per Share Data)
(Unaudited)
For the Three Months Ended
March 31,
2004 2003
Revenues $212,244 $213,592
Net (loss) ($9,048) ($5,664)
(Loss) per share:
Basic ($1.03) ($0.67)
Diluted ($1.03) ($0.67)
Weighted average common shares outstanding:
Basic 8,789 8,409
Diluted 8,789 8,409
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, December 31,
2004 2003
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $8,441 $2,148
Restricted cash and cash equivalents 28,902 $26,267
Receivables, net of allowance for
doubtful accounts of $2,228 and
$3,575 respectively 63,570 55,110
Inventories 5,046 4,983
Deferred income taxes 19,460 20,213
Prepayments and other current assets 18,284 12,644
Total current assets 143,703 121,365
PROPERTY AND EQUIPMENT, NET 148,944 155,573
GOODWILL, NET 89,922 90,203
OTHER ASSETS:
Restricted cash and cash equivalents 61,416 55,817
Other non-current assets 33,513 32,777
Total other assets 94,929 88,594
Total assets $477,498 $455,735
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $16,374 $16,374
Borrowings under revolving credit facility 16,870 --
Trade accounts payable 46,478 34,272
Accrued liabilities 89,493 80,937
Total current liabilities 169,215 131,583
LONG-TERM DEBT, less current maturities 224,959 230,126
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 5,232 5,302
DEFERRED INCOME TAXES 19,460 20,213
OTHER LONG-TERM LIABILITIES 58,771 59,697
STOCKHOLDERS' EQUITY:
Preferred stock, no par value; 5,000
shares authorized, none outstanding -- --
Common stock, no par value; 20,000
shares authorized, 8,848 and 8,764
shares outstanding at March 31, 2004
and December 31, 2003, respectively -- --
Additional paid-in capital 48,009 47,511
Treasury stock at cost, 139 shares
at March 31, 2004 and December 31, 2003,
respectively (707) (707)
Accumulated deficit (44,072) (35,024)
Accumulated other comprehensive loss,
net of tax (3,369) (2,966)
Total stockholders' equity (139) 8,814
Total liabilities and stockholders' equity $477,498 $455,735
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
For the Three Months Ended
March 31,
2004 2003
REVENUES $212,244 $213,592
OPERATING EXPENSES:
Salaries, wages and fringe benefits 119,947 117,575
Operating supplies and expenses 37,046 37,180
Purchased transportation 25,906 24,713
Insurance and claims 9,163 9,357
Operating taxes and licenses 6,559 7,838
Depreciation and amortization 10,386 12,024
Rents 1,716 1,620
Communications and utilities 1,954 1,888
Other operating expenses 2,186 2,849
(Gain) loss on disposal of
operating assets, net (1,137) 264
Total operating expenses 213,726 215,308
Operating loss (1,482) (1,716)
OTHER INCOME (EXPENSE):
Interest expense (7,368) (7,381)
Investment income 57 326
Foreign exchange (loss) gain, net (155) 1,018
Other, net (100) --
(7,566) (6,037)
LOSS BEFORE INCOME TAXES (9,048) (7,753)
INCOME TAX BENEFIT -- 2,089
NET LOSS ($9,048) ($5,664)
BASIC AND DILUTED LOSS PER COMMON SHARE:
BASIC ($1.03) ($0.67)
DILUTED ($1.03) ($0.67)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC 8,789 8,409
DILUTED 8,789 8,409
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
For the Three Months
Ending March 31,
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($9,048) ($5,664)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Interest expense paid in kind -- 369
Amortization of deferred financing costs 704 1,012
Depreciation and amortization 10,386 12,024
(Gain)/loss on disposal of operating
assets, net (1,137) 264
Foreign exchange loss (gain), net 155 (1,018)
Deferred income taxes -- (4,401)
Compensation expense related
to stock options and grants 195 60
Amortization of Teamsters
Union contract costs -- 600
Change in operating assets and liabilities:
Receivables, net of allowance
for doubtful accounts (8,541) 2,810
Inventories (74) (226)
Prepayments and other current assets (7,117) (2,039)
Trade accounts payable 12,250 (3,810)
Accrued liabilities 7,637 (2,146)
Net cash (used in)
provided by operating activities 5,410 (2,165)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (4,847) (5,878)
Increase in Restricted cash
and cash equivalents (8,234) (2,686)
Increase in Restricted investments -- (2,442)
Proceeds from sale of property
and equipment 1,826 11
Decrease in the cash surrender value
of life insurance -- 1
Net cash used in investing activities (11,255) (10,994)
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to revolving credit
facilities, net 16,870 8,471
Repayment of long-term debt (5,167) (2,226)
Payment of deferred financing costs -- (407)
Proceeds from issuance of common stock 303 57
Other, net -- (12)
Net cash provided by financing activities 12,006 5,883
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 132 85
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 6,293 (7,191)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 2,148 9,448
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $8,441 $2,257
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2004 FIRST QUARTER EARNINGS RELEASE
OPERATING DATA
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
2004 2003
AAG, Including Allied Holdings
REVENUES $205,667,000 $206,202,000
OPERATING INCOME ($2,138,000) ($2,387,000)
OPERATING RATIO 101.04% 101.16%
VEHICLES DELIVERED 2,176,748 2,213,276
LOADS DELIVERED 283,064 289,081
VEHICLES PER LOAD 7.69 7.66
REVENUE PER VEHICLE $94.48 $93.17
PERCENT DAMAGE FREE DELIVERY 99.7% 99.7%
NUMBER OF
AVERAGE ACTIVE RIGS 3,692 3,803
AVERAGE EMPLOYEES
DRIVERS 3,761 4,235
OTHERS 1,877 2,013
AXIS GROUP:
REVENUES $6,577,000 $7,390,000
OPERATING INCOME $656,000 $671,000
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
2004 FIRST QUARTER EARNINGS RELEASE
NON-GAAP FINANCIAL INFORMATION
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
2004 2003
RECONCILIATION OF NET (LOSS)
TO ADJUSTED EBITDA:
NET (LOSS) ($9,048) ($5,664)
INCOME TAX (BENEFIT) -- (2,089)
INTEREST EXPENSE 7,368 7,381
INVESTMENT INCOME (57) (326)
FOREIGN EXCHANGE LOSSES (GAINS), NET 155 (1,018)
OTHER, NET 100 --
LOSS ON DISPOSAL OF OPERATING ASSETS (1,137) 264
DEPRECIATION AND AMORTIZATION 10,386 12,024
ADJUSTED EBITDA $7,767 $10,572
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. The Company's net income is the closest measure in
the Company's financial statements prepared in accordance with Generally
Accepted Accounting Principles ("GAAP"), in terms of comparability to
Adjusted EBITDA. Because Adjusted EBITDA is not a measure determined in
accordance with GAAP and is thus susceptible to varying calculations,
Adjusted EBITDA as presented may not be comparable to other similarly
titled measures used by other companies.