Allied Holdings Reports Q3 Results and Announces Stock Repurchase
21 October 1999
Allied Holdings Reports Third Quarter Results and Announces Stock Repurchase
DECATUR, Ga., Oct. 21 -- Allied Holdings, Inc.
today reported results for the third quarter ended September 30, 1999 and
announced that its Board of Directors has authorized the repurchase of up to
500,000 shares of Allied Holdings' common stock.
Revenues for the third quarter of 1999 were $240.1 million, compared with
revenues of $217.5 million for the third quarter last year. The Company
experienced a net loss of $3.8 million during the third quarter of 1999,
versus a loss of $5.0 million during the third quarter of 1998. The basic and
diluted losses per share for the third quarter of 1999 were $0.49, versus a
basic and diluted loss per share of $0.64 in the third quarter of 1998.
Revenues for the nine-month period ended September 30, 1999, were
$788.3 million, versus revenues of $751.5 million reported for the same period
last year. The Company had a net loss of $3.7 million for the first nine
months of 1999, compared with net income of $3.4 million for the comparable
nine-month period a year ago. Basic and diluted loss per share for the nine
months ended September 30, 1999 were $0.47, versus basic and diluted earnings
per share of $0.44 for the comparable nine-month period a year ago.
Commenting on the results, A. Mitchell Poole, Jr., Allied's president and
chief operating officer, said: "The third quarter is historically our slowest
due to seasonal closings of automotive manufacturing plants for vacations and
model change-overs. However, the 1998 third quarter results were impacted by
work stoppages at most General Motors manufacturing plants while a number of
items adversely effected the Allied Automotive Groups' ("AAG") 1999 third
quarter results. AAG continues to experience reduced load averages because of
delivering larger and heavier vehicles. In addition, AAG's labor costs have
increased as a result of the new U.S. Teamster contract, and fuel prices are
substantially higher than the 1998 levels. Also, cargo claims costs have
increased, but we have recently instituted new quality programs that should
reduce the frequency and amount of cargo claims." Mr. Poole added: "AAG has
put into effect rate increases covering sixty to seventy percent of the
vehicles it delivers; however, the increases were in effect for only a portion
of the third quarter. AAG is continuing negotiations in an effort to obtain
rate increases on its remaining traffic by year-end."
Mr. Poole, said: "Obtaining rate relief has taken longer than we
anticipated, but for those we have completed, we have achieved mutually
satisfactory results. We will continue to seek increases from AAG's remaining
customers to ensure proper pricing due to the continuing trend towards larger
vehicles. AAG has obtained a modest increase from one of those customers as
an interim step; however, that customer is market testing all of its haulaway
business in the U.S. and Canada. This includes AAG's current business as well
as that of AAG's competitors. As a result, we are seeking to retain our
business with this customer with higher revenues in order to improve
profitability."
Mr. Poole added, "The Axis Group continues to exceed expectations and
again posted a profit in the third quarter. In addition, AAG has obtained
significant rate relief and will continue to aggressively pursue cost savings.
As a result, we expect to eliminate the third quarter loss with a profitable
fourth quarter and we are very optimistic about the outlook for 2000 and
beyond."
The Company also announced today that, subject to obtaining approval from
the Company's lenders, the Board of Directors has authorized management to
take the necessary steps to repurchase up to 500,000 shares of the Company's
outstanding common stock through fiscal year 2000 in open market transactions.
The Company expects to obtain lender approval for the stock repurchase during
the fourth quarter.
Robert J. Rutland, chairman and chief executive officer, said: "It is our
opinion that at current market prices, Allied's shares represent an attractive
opportunity for the Company. The current market conditions have helped create
an opportunity for the Company to further its commitment to increasing
shareholder value and provide the best uses of our capital resources. The
timing of these purchases and the number of shares purchased will be dictated
by market conditions and other relevant factors."
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,
the highly competitive nature of the automotive distribution industry,
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, changes in vehicle sizes and weights which may
impact vehicle deliveries per load, the ability to increase the rates charged
to customers, and problems related to information technology systems and
computations that must be made by the Company or its customers and vendors 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
1999 THIRD QUARTER EARNINGS RELEASE
(In Thousands, Except Per Share Data)
For the Three Months Ended
September 30
1999 1998
Revenues $240,058 $217,468
Net (loss) ($3,823) ($4,960)
Loss per share - Basic and diluted ($0.49) ($0.64)
Weighted average common
shares outstanding 7,818 7,748
For the Nine Months Ended
September 30
1999 1998
Revenues $788,291 $751,499
Net (loss) income ($3,696) $3,427
(Loss) earnings per share -
Basic and diluted ($0.47) $0.44
Weighted average common
shares outstanding
Basic 7,818 7,747
Diluted 7,818 7,858