Allied Holdings Reports Fourth Quarter and Year-End Results
10 February 1999
Allied Holdings Reports Fourth Quarter and Year-End Results
DECATUR, Ga., Feb. 10 -- Allied Holdings, Inc.
today reported results for the fourth quarter and year ended December 31,
1998. Revenues for the fourth quarter of 1998 were $275.3 million, compared
with revenues of $281.2 million for the fourth quarter last year. Revenues
declined primarily because of lower Canadian dollar exchange rates. Net
income was $5.1 million during the fourth quarter of 1998, versus $4.4 million
during the fourth quarter of 1997. Basic and diluted earnings for the fourth
quarter of 1998 were $0.65 per share, versus basic and diluted earnings of
$0.56 per share in the fourth quarter of 1997, an increase of 16 percent.
The Company previously announced the adoption of a voluntary early
retirement program (VERP). During the fourth quarter of 1998, the Company
expensed approximately $2.0 million, or $0.15 per share, for the VERP.
Approximately 40 employees have elected early retirement and they will retire
on June 30, 1999. The Company expects annual operating cost savings as a
result of the program to be approximately $1.5 million. Excluding the VERP
costs, earnings for the fourth quarter of 1998 would have been $0.80 per
share.
Commenting on the results, Robert J. Rutland, Allied's chairman and chief
executive officer, said, "During the fourth quarter, we completed the
integration of Ryder's Automotive Carrier Group. All terminals are now
operating on one computer system, all duplicate terminals have been closed,
and all administrative processing has been centralized in Decatur. Excluding
the VERP costs, earnings per share in the fourth quarter of 1998 increased
43 percent over the fourth quarter of 1997 as we realize operating cost
savings from the Ryder acquisition."
Revenues for the year ended December 31, 1998 were $1.03 billion, versus
revenues of $581.5 million reported for 1997, a 77 percent increase. The
Company acquired Ryder's Automotive Carrier Group on September 30, 1997, and
its results have been included with Allied's since the date of the acquisition
which has increased revenues during 1998. Net income was $8.5 million in
1998, versus net income of $2.4 million in 1997. Basic earnings per share for
1998 were $1.09 while diluted earnings per share were $1.08, versus basic and
diluted earnings per share of $0.31 in 1997. The 1998 results were impacted
by an eight-week work stoppage at most General Motors manufacturing plants.
The Company estimates that the work stoppages reduced earnings in 1998 by
approximately $0.75 per share. The 1997 results include a charge of
$8.9 million, or $0.67 per share, which the Company recorded to write down
rigs and terminal facilities idled or closed as a result of the Ryder
acquisition.
A Mitchell Poole, Jr., Allied's president and chief operating officer,
said, "New vehicle sales in the United States finished the year strong, up
3 percent for the year, while new vehicle sales were flat in Canada and down
23 percent in Brazil. For 1999, we look for U.S. new vehicle sales to remain
at a healthy level, and are hopeful that new vehicle sales in Canada will
bounce back from the downturn experienced in the fourth quarter of 1998.
However, we do not anticipate new vehicle sales to recover in Brazil for 1999.
Axis Sinimbu has taken measures to reduce its operating costs and adjust its
workforce as a result of lower vehicle delivery volumes. Automotive
manufacturers continue to invest in Brazil, and we believe Axis Sinimbu is
well positioned to weather the economic crisis and capitalize on opportunities
when vehicle sales rebound."
Mr. Poole added, "The focus of the Allied Automotive Group in 1999 will be
to optimize its terminal network now that the integration of the Ryder
acquisition is complete, and to negotiate new contracts with the International
Brotherhood of Teamsters union. For Axis, we look for continued revenue
growth by providing the automotive manufacturers' services throughout the
continuum of logistics services required by the auto industry."
Allied Holdings, Inc. is the parent company of several subsidiaries
engaged in the automotive distribution business. The Allied Automotive
Group(AAG), through its subsidiaries, is the largest motor carrier in North
America specializing in the delivery of automobiles and light trucks. AAG
transports for all major domestic and foreign manufacturers primarily from
manufacturing plants, rail ramps, ports and auctions to automobile dealers
throughout the United States and Canada. Allied Holdings' Axis Group, through
its subsidiaries, provides logistics solutions to the United States and
international automotive markets. Axis utilizes innovative methods of
distribution, as well as traditional and emerging technologies, to help
customers solve the most complex transportation, inventory and logistics
problems.
Statements in this press release that are not strictly historical are
"forward-looking" statements. 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,
labor disputes involving the Company or its significant customers, risks
associated with conducting business in foreign countries and problems related
to computations that must be made by the Company or its vendors or customers
in 1999, 2000, or beyond . 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.
Allied Holdings, Inc. and Subsidiaries
1998 Fourth Quarter Earnings Release
(In thousands, Except Per Share Data)
For The Three Months Ended
12/31/98 12/31/97
Revenues $275,300 $281,177
Net income $ 5,050 $ 4,365
Earnings per share
basic and diluted $0.65 $0.56
Weighted average common
shares outstanding
Basic 7,748 7,736
Diluted 7,829 7,861
For The Year Ended
12/31/98 12/31/97
Revenues $1,026,799 $581,530
Net income $ 8,477 $ 2,402
Earnings per share
Basic $1.09 $0.31
Diluted $1.08 $0.31
Weighted average common
shares outstanding
Basic 7,747 7,728
Diluted 7,846 7,810