Allied Holdings Reports Fourth Quarter and Year-End Results
15 February 2000
Allied Holdings Reports Fourth Quarter and Year-End Results
DECATUR, Ga., Feb. 15 -- Allied Holdings, Inc.
today reported results for the fourth quarter and year ended December 31,
1999. Revenues for the fourth quarter of 1999 were $293.0 million, compared
with revenues of $275.3 million for the fourth quarter last year, an increase
of 6 percent. Net income was $5.3 million during the fourth quarter of 1999
versus $5.1 million in the fourth quarter of 1998, an increase of 4 percent.
Basic and diluted earnings for the fourth quarter of 1999 were $0.67 per
share, versus basic and diluted earnings of $0.65 per share in the fourth
quarter of 1998.
The Company had previously announced that fourth quarter earnings would
exceed analysts' estimates due to improved operating performance, rate
adjustments put in place during the second half of 1999, and strong vehicle
delivery volumes.
Commenting on the fourth quarter results, A. Mitchell Poole, Jr., Allied's
vice chairman and chief executive officer, said: "Our operating performance in
the fourth quarter of 1999 improved even though we absorbed higher fuel and
Y2K costs. Higher fuel costs reduced operating income in the fourth quarter
of 1999 versus 1998 by approximately $3.0 million, while year 2000 computer-
related costs in the fourth quarter of 1999 exceeded Y2K costs in the fourth
quarter of 1998 by approximately $1.0 million. However, the Company expensed
approximately $2.0 million in the fourth quarter of 1998 for a Voluntary Early
Retirement Program. Excluding these items, net earnings would have been
$0.96 per share in the fourth quarter of 1999, versus $0.80 per share in the
fourth quarter of 1998, an increase of 20 percent."
Revenues for the year ended December 31, 1999 were $1.08 billion, versus
revenues of $1.03 billion reported for 1998, a 5 percent increase. Net income
was $1.5 million in 1999, versus net income of $8.5 million in 1998. Basic
and diluted earnings per share for 1999 were $0.20, versus basic and diluted
earnings per share for 1998 of $1.09 and $1.08, respectively.
Randall E. West, Allied's president and chief operating officer, said: "We
are very optimistic about the outlook for 2000. North American new vehicle
sales are forecasted to be the second highest in history, and we believe the
operating performance improvement that began in the fourth quarter of 1999
will continue in 2000 as our management team focuses on continued improvement
in earnings and customer service. Fuel costs have increased; however, we have
secured fuel surcharges on approximately 55 percent of the vehicles we
deliver."
West continued: "The year 2000 will bring many changes to the automotive
distribution industry. We are confident that Allied continues to be well
positioned to extend our capabilities as a service provider in the global
automotive market."
Allied Holdings, Inc. is the parent of several subsidiaries engaged in
providing logistics, distribution and transportation services to the
automotive industry. The services of Allied's subsidiaries span the entire
finished vehicle distribution continuum, and include logistics, car-hauling,
intramodal transport, accessorization, and dealer prep. Allied, through its
subsidiaries, is the largest 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. 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, and changes in vehicle sizes and weights which
may impact vehicle deliveries per load. 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 FOURTH QUARTER EARNINGS RELEASE
(In Thousands, Except Per Share Data)
For the Three Months Ended
December 31
1999 1998
Revenues $293,018 $275,300
Net income $ 5,245 $ 5,050
Earnings per share-Basic and diluted $ 0.67 $ 0.65
Weighted average common shares outstanding
Basic 7,842 7,748
Diluted 7,859 7,829
For the Year Ended
December 31
1999 1998
Revenues $1,081,309 $1,026,799
Net income $ 1,549 $ 8,477
Earnings per share
Basic $ 0.20 $ 1.09
Diluted $ 0.20 $ 1.08
Weighted average common shares outstanding
Basic 7,810 7,747
Diluted 7,851 7,846
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
December 31 December 31
1999 1998
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,984 $ 21,977
Short-term investments 44,325 23,323
Receivables, net of allowance
for doubtful accounts 121,058 103,968
Inventories 7,949 6,788
Deferred tax assets 16,119 20,773
Prepayments and other current assets 22,182 18,930
Total current assets 225,617 195,759
PROPERTY AND EQUIPMENT, NET 287,838 297,530
OTHER ASSETS:
Goodwill, net 93,104 94,577
Other 43,361 33,761
Total other assets 136,465 128,338
Total assets $649,920 $621,627
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 185 $ 2,746
Trade accounts payable 42,931 42,196
Accrued liabilities 85,655 100,788
Total current liabilities 128,771 145,730
LONG-TERM DEBT, less current maturities 330,101 291,096
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 11,973 11,165
DEFERRED INCOME TAXES 37,409 39,953
OTHER LONG-TERM LIABILITIES 74,752 70,830
STOCKHOLDERS' EQUITY:
Common stock, no par value; 20,000 shares
authorized, 7,997 and 7,878 shares outstanding
at December 31, 1999 and December 31,
1998, respectively 0 0
Additional paid-in capital 44,437 43,614
Retained earnings 26,903 25,354
Cumulative other comprehensive income,
net of tax (4,240) (6,115)
Common stock in treasury, at cost,
29 shares in 1999 (186) 0
Total stockholders' equity 66,914 62,853
Total liabilities and stockholders' equity $649,920 $621,627
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
For the Three For the Twelve
Months Ended Months Ended
December 31 December 31
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited)
REVENUES $ 293,018 $ 275,300 $1,081,309 $1,026,799
OPERATING EXPENSES:
Salaries, wages and
fringe benefits 156,409 145,681 585,380 547,780
Operating supplies
and expenses 49,714 42,392 185,541 169,498
Purchased transportation 26,572 27,333 103,967 109,884
Insurance and claims 10,680 11,176 48,252 40,339
Operating taxes
and licenses 10,733 11,072 41,288 40,779
Depreciation and
amortization 14,777 14,117 58,019 53,327
Rents 2,352 2,725 8,974 10,072
Communications and
utilities 2,571 2,589 9,060 9,341
Other operating expenses 3,364 2,356 10,945 7,429
Total operating
expenses 277,172 259,441 1,051,426 988,449
Operating income 15,846 15,859 29,883 38,350
OTHER INCOME (EXPENSE):
Equity in earnings (loss)
of joint ventures,
net of tax 352 (673) 1,733 (470)
Interest expense (8,705) (7,300) (32,001) (26,146)
Interest income 776 1,052 2,112 3,270
(7,577) (6,921) (28,156) (23,346)
INCOME BEFORE INCOME TAXES 8,269 8,938 1,727 15,004
INCOME TAX PROVISION (3,024) (3,888) (178) (6,527)
NET INCOME $ 5,245 $ 5,050 $ 1,549 $ 8,477
PER COMMON SHARE:
BASIC $0.67 $0.65 $0.20 $1.09
DILUTED $0.67 $0.65 $0.20 $1.08
COMMON SHARES OUTSTANDING:
BASIC 7,842 7,748 7,810 7,747
DILUTED 7,859 7,829 7,851 7,846
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
For the Years Ended
December 31
1999 1998
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,549 $ 8,477
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 58,019 53,327
Loss (gain) on sale of property and equipment 628 (32)
Deferred income taxes 718 1,852
Compensation expense related to stock options
and grants 33 291
Equity in (earnings) loss of joint ventures (1,733) 470
Payment of Teamsters Union signing bonus,
net of amortization (8,298) 0
Change in operating assets and liabilities:
Receivables, net of allowance
for doubtful accounts (16,123) (30,321)
Inventories (1,090) (1,505)
Prepayments and other current assets (3,102) 2,384
Trade accounts payable 359 6,366
Accrued liabilities (10,839) (15,751)
Total adjustments 18,572 17,081
Net cash provided by operating activities 20,121 25,558
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (45,027) (61,868)
Proceeds from sale of property and equipment 2,749 606
Purchase of business, net of cash acquired (1,879) (942)
Investment in joint venture (306) (11,920)
Increase in short-term investments (21,002) (3,783)
Increase in the cash surrender value
of life insurance (773) (1,373)
Net cash used in investing activities (66,238) (79,280)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt, net 36,444 62,859
Proceeds from issuance of common stock 415 0
Repurchase of common stock (186) 0
Proceeds from exercise of stock options 27 24
Other, net 971 2,613
Net cash provided by financing activities 37,671 65,496
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 453 (327)
NET INCREASE IN CASH AND CASH EQUIVALENTS (7,993) 11,447
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 21,977 10,530
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 13,984 $ 21,977
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
1999 FOURTH QUARTER EARNINGS RELEASE
OPERATING DATA
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
1999 1998 1999 1998
ALLIED HOLDINGS, EXCLUDING AAG - CANADA:
REVENUES $244,335,000 $233,633,000 $902,364,000 $858,772,000
OPERATING INCOME $ 8,693,000 $ 12,125,000 $ 16,015,000 $ 30,132,000
OPERATING RATIO 96.44% 94.81% 98.23% 96.49%
VEHICLES
DELIVERED 2,610,908 2,530,749 9,966,120 9,285,993
LOADS DELIVERED 320,620 307,130 1,233,014 1,130,259
VEHICLES PER LOAD 8.14 8.24 8.08 8.22
REVENUE PER VEHICLE $93.58 $92.32 $90.54 $92.48
PERCENT DAMAGE
FREE DELIVERY 99.5% 99.7% 99.5% 99.7%
NUMBER OF
AVERAGE ACTIVE RIGS 4,251 4,381 4,329 4,384
AVERAGE EMPLOYEES
DRIVERS 5,020 5,006 4,937 4,932
OTHERS 2,498 2,387 2,434 2,036
ALLIED AUTOMOTIVE GROUP - CANADA:
REVENUES $ 48,683,000 $ 41,667,000 $178,945,000 $168,027,000
OPERATING INCOME $ 7,153,000 $ 3,734,000 $ 13,868,000 $ 8,218,000
OPERATING RATIO 85.31% 91.04% 92.25% 95.11%
VEHICLES DELIVERED 649,169 628,999 2,516,512 2,406,003
LOADS DELIVERED 82,741 80,229 323,366 301,704
VEHICLES PER LOAD 7.85 7.84 7.78 7.97
REVENUE PER VEHICLE $74.99 $66.24 $71.11 $69.84
PERCENT DAMAGE
FREE DELIVERY 99.7% 99.6% 99.6% 99.6%
NUMBER OF
AVERAGE ACTIVE RIGS 843 859 858 898
AVERAGE EMPLOYEES
DRIVERS 1,214 1,214 1,193 1,229
OTHERS 584 542 581 640