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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACTION OF 1934 - FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the transition period from _______________ to
____________________
Commission File Number: 0-22276
ALLIED HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-0360550
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
SUITE 510, 160 CLAIREMONT AVENUE, DECATUR, GEORGIA 30030
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(Address of principal executive offices)
(404) 373-4285
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Outstanding common stock, No par value at May 1, 1996 ............... 7,725,000
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 10
1
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INDEX
PART I
FINANCIAL INFORMATION
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PAGE
ITEM 1: FINANCIAL STATEMENTS
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Consolidated Balance Sheets as of March 31, 1996 and
December 31, 1995 ................................................... 3
Consolidated Statements of Operations for the Three
Month Periods Ended March 31, 1996 and 1995 ......................... 4
Consolidated Statements of Cash Flows for the Three
Month Periods Ended March 31, 1996 and 1995 ......................... 5
Notes to Consolidated Financial Statements............................. 6
ITEM 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................. 7
PART II
OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K ...................................... 9
Signature Page ........................................................ 10
</TABLE>
2
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PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
March 31 December 31
1996 1995
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(Unaudited)
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,043 $ 11,147
Receivables, net of allowance for doubtful accounts 27,388 22,690
Inventories 4,212 4,184
Prepayments and other current assets 14,238 12,400
-------- --------
Total current assets 53,881 50,421
-------- --------
PROPERTY AND EQUIPMENT, NET 134,414 134,873
-------- --------
OTHER ASSETS:
Goodwill, net 23,279 23,568
Notes receivable due from related parties 573 573
Other 5,708 5,251
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Total other assets 29,560 29,392
-------- --------
Total assets $217,855 $214,686
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,244 $ 4,368
Trade accounts payable 14,228 11,320
Accrued liabilities 30,604 27,569
-------- --------
Total current liabilities 49,076 43,257
-------- --------
LONG-TERM DEBT, less current maturities 105,066 106,634
-------- --------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 3,702 3,698
-------- --------
DEFERRED INCOME TAXES 5,642 5,561
-------- --------
OTHER LONG-TERM LIABILITIES 1,767 2,514
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, no par value; 20,000 shares authorized, 7,725
shares outstanding 0 0
Additional paid-in capital 42,977 42,977
Retained earnings 9,914 10,489
Foreign currency translation adjustment, net of tax (289) (444)
-------- --------
Total stockholders' equity 52,602 53,022
-------- --------
Total liabilities and stockholders' equity $217,855 $214,686
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
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ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
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<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31
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1996 1995
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REVENUES $93,396 $101,062
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OPERATING EXPENSES:
Salaries, wages and fringe benefits 50,633 51,932
Operating supplies and expenses 14,862 16,690
Purchased transportation 7,861 8,789
Insurance and claims 3,746 3,973
Operating taxes and licenses 3,886 4,520
Depreciation and amortization 6,405 6,191
Rents 1,249 1,236
Communications and utilities 930 872
Other operating expenses 734 594
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Total operating expenses 90,306 94,797
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Operating income 3,090 6,265
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OTHER INCOME (EXPENSE):
Interest expense (2,668) (2,875)
Interest income 181 167
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(2,487) (2,708)
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INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 603 3,557
INCOME TAX PROVISION (243) (1,494)
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INCOME BEFORE EXTRAORDINARY ITEM 360 2,063
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT, net of
income tax benefit of $573 (935) 0
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NET (LOSS) INCOME ($575) $ 2,063
======= ========
PER COMMON SHARE:
Income before extraordinary item $ 0.05 $ 0.27
Extraordinary loss on early extinguishment
of debt (0.12) 0.00
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NET (LOSS) INCOME PER COMMON SHARE ($0.07) $ 0.27
======= ========
COMMON SHARES OUTSTANDING 7,725 7,725
======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
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ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
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<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31
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1996 1995
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(UNAUDITED) (UNAUDITED)
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income ($575) $ 2,063
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Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 6,405 6,191
Gain on sale of property and equipment (25) (89)
Extraordinary loss on early extinguishment
of debt, net 935 0
Deferred income taxes (12) 86
Change in operating assets and liabilities:
Receivables, net of allowance for doubtful accounts (4,675) (3,235)
Inventories (24) (150)
Prepayments and other current assets (1,829) (688)
Trade accounts payable 2,897 (2,135)
Accrued liabilities 2,278 4,070
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Total adjustments 5,950 4,050
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Net cash provided by operating activities 5,375 6,113
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (5,470) (3,641)
Proceeds from sale of property and equipment 119 696
Increase in the cash surrender value of life insurance (871) (60)
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Net cash used in investing activities (6,222) (3,005)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (41,699) (3,875)
Proceeds from issuance of long-term debt 40,000 0
Other, net (602) 122
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Net cash used in financing activities (2,301) (3,753)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 44 52
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,104) (593)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,147 11,712
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,043 $11,119
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
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ALLIED HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Note 1. Basis of Presentation
The unaudited consolidated financial statements included herein have
been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The statements contained
herein reflect all adjustments, all of which are of a normal, recurring
nature, which are, in the opinion of management, necessary to present
fairly the financial condition, results of operations and cash flows
for the periods presented. Operating results for the three month
period ended March 31, 1996 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1996. The
interim financial statements should be read in conjunction with the
financial statements and notes thereto of Allied Holdings, Inc. and
Subsidiaries, (the "Company") included in the Company's 1995 Annual
Report on Form 10-K.
Note 2. Reclassifications
Certain prior period amounts have been reclassified to conform with the
current year presentation.
Note 3. Long-Term Debt
In February 1996, the Company issued $40 million of senior
subordinated notes through a private placement. Proceeds from the
senior subordinated notes were used to reduce borrowings outstanding
under the Company's $130 million revolving credit facility. In
connection with the issuance of the notes, the Company refinanced its
revolving credit facility and recorded a $935,000 extraordinary loss,
net of income taxes, during the first quarter of 1996 related to the
extinguishment of debt.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues were $93.4 million in the first quarter of 1996, compared to
$101.1 million for the same period in 1995, a decrease of 7.6%. The
decline in revenues during 1996 versus 1995 was primarily due to a
decrease of approximately 6% in the number of vehicles delivered by the
Company. The number of vehicles the Company delivers is directly
impacted by U.S. and Canada's car and light truck production and sales;
new vehicle production at the Company's two largest customers decreased
approximately 7% from the first quarter of 1995.
Net income was $360,000 during the first quarter of 1996, versus $2.1
million during the first quarter of 1995, or $0.05 per share in 1996,
versus $0.27 per share in 1995, (excluding a $935,000 extraordinary
loss on the early extinguishment of debt recorded during the first
quarter of 1996). In addition to being impacted by an overall decline
in revenues, net income during the first quarter of 1996 was also
affected by the following factors. First, the strike at a number of
General Motors' manufacturing plants interrupted the Company's ability
to transport vehicles from the General Motors' manufacturing plants it
serves as well as from its rail ramps. Allied estimated that this
adversely impacted earnings by approximately $0.05 per share due to
decreased revenues and inefficiencies caused by the disruption in
business. The Company was also impacted by a sharp rise in diesel fuel
prices which increased approximately 8% from the first quarter of 1995
to the first quarter of 1996, reducing earnings by approximately $0.04
per share. In addition, the disruption in business caused by the
severe winter weather during the first quarter of 1996 resulted in
increased costs and lost efficiencies.
Salaries, wages and fringe benefits increased from 51.4% of
revenues for the first three months of 1995 to 54.2% of revenues for
the first three months of 1996. This increase as a percentage of
revenues is primarily due to inefficiencies and increased costs
resulting from the General Motors' strike and the severe winter weather
during the first quarter of 1996.
Depreciation and amortization expense for the first quarter of 1995
increased from 6.1% of revenues to 6.9% of revenues for the first
quarter of 1996 mainly due to the acquisition of additional rigs
together with the additional goodwill amortization resulting from the
acquisition of Auto Haulaway.
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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $5,375,000 for the
three months ended March 31, 1996 versus net cash provided by operating
activities of $6,113,000 for the same period in 1995. This decrease in
cash flows from operations is mainly due to the reduction in net income
from the first quarter of 1995 to the first quarter of 1996.
Net cash used in investing activities totaled $6,222,000 for the three
months ended March 31, 1996 versus $3,005,000 for the same period in
1995. This increase was primarily due to an increase in the number of
new rigs that were acquired.
Net cash used in financing activities totaled $2,301,000 for the three
months ended March 31, 1996 versus net cash used in financing
activities of $3,753,000 for the same period in 1995. During the first
quarter of 1995, the company repaid $3,875,000 of long-term debt.
During the first quarter of 1996, the company issued $40,000,000 of
senior subordinated notes, the proceeds of which were used to repay
long-term debt. During the first quarter of 1996, $41,699,000 of
long-term debt was repaid.
SEASONALITY AND INFLATION
The Company generally experiences its highest revenues during the
fourth quarter of each calendar year due to the shipment of new
automobile models which are manufactured during this quarter. During
the past three years, inflation has not affected the Company's results
of operations.
8
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K: The company filed a Form 8-K dated
February 20, 1996 regarding the issuance of
$40 million of senior subordinated notes.
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Allied Holdings, Inc.
May 10, 1996 /s/ A. Mitchell Poole, Jr.
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(Date) A. Mitchell Poole, Jr.
on behalf of Registrant as
President and Chief Operating Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ALLIED HOLDINGS, INC. FOR THE THREE MONTHS ENDED MARCH
31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 8,043
<SECURITIES> 0
<RECEIVABLES> 27,388
<ALLOWANCES> 0
<INVENTORY> 4,212
<CURRENT-ASSETS> 53,881
<PP&E> 134,414
<DEPRECIATION> 0
<TOTAL-ASSETS> 217,855
<CURRENT-LIABILITIES> 49,076
<BONDS> 105,066
0
0
<COMMON> 0
<OTHER-SE> 52,602
<TOTAL-LIABILITY-AND-EQUITY> 217,855
<SALES> 93,396
<TOTAL-REVENUES> 93,396
<CGS> 90,306
<TOTAL-COSTS> 90,306
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,668
<INCOME-PRETAX> 603
<INCOME-TAX> 243
<INCOME-CONTINUING> 360
<DISCONTINUED> 0
<EXTRAORDINARY> (935)
<CHANGES> 0
<NET-INCOME> (575)
<EPS-PRIMARY> $(0.07)
<EPS-DILUTED> $(0.07)
</TABLE>
