<PAGE> 1
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 SEPTEMBER 30,
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.
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(Exact name of registrant as specified in its charter)
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<S> <C>
GEORGIA 58-0360550
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
SUITE 510, 160 CLAIREMONT AVENUE, DECATUR, GEORGIA 30030
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(Address of principal executive offices)
(404) 373-4285
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(Registrant's telephone number, including area code)
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(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 November 1, 1996 . . . . . . 7,725,000
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 11
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INDEX
PART I
FINANCIAL INFORMATION
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PAGE
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ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets as of September 30, 1996 and
December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the Three
and Nine Month Periods Ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Nine
Month Periods Ended September 30, 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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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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SEPTEMBER 30 DECEMBER 31
1996 1995
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(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 11,527 $ 11,147
Receivables, net of allowance for doubtful accounts 27,200 22,690
Inventories 3,875 4,184
Prepayments and other current assets 13,286 12,400
-------- --------
Total current assets 55,888 50,421
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PROPERTY AND EQUIPMENT, NET 132,977 134,873
-------- --------
OTHER ASSETS:
Goodwill, net 22,247 23,568
Notes receivable due from related parties 573 573
Other 6,913 5,251
-------- --------
Total other assets 29,733 29,392
-------- --------
Total assets $218,598 $214,686
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 3,918 $ 4,368
Trade accounts payable 15,040 11,320
Accrued liabilities 33,476 27,569
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Total current liabilities 52,434 43,257
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LONG-TERM DEBT, LESS CURRENT MATURITIES 100,825 106,634
-------- --------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 3,695 3,698
-------- --------
DEFERRED INCOME TAXES 5,680 5,561
-------- --------
OTHER LONG-TERM LIABILITIES 1,291 2,514
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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 12,076 10,489
Foreign currency translation adjustment, net of tax (380) (444)
-------- --------
Total stockholders' equity 54,673 53,022
-------- --------
Total liabilities and stockholders' equity $218,598 $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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FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
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1996 1995 1996 1995
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REVENUES $87,609 $82,192 $288,174 $285,506
------- ------- -------- --------
OPERATING EXPENSES:
Salaries, wages and fringe benefits 46,687 44,856 152,002 148,011
Operating supplies and expenses 14,396 13,531 45,922 46,720
Purchased transportation 7,390 6,723 25,056 24,365
Insurance and claims 4,243 3,305 12,282 11,590
Operating taxes and licenses 3,901 3,625 12,282 12,460
Depreciation and amortization 6,703 6,451 19,634 18,953
Rents 1,266 1,341 3,747 3,925
Communications and utilities 750 834 2,490 2,604
Other operating expenses 1,286 894 2,717 2,364
------- ------- -------- --------
Total operating expenses 86,622 81,560 276,132 270,992
------- ------- -------- --------
Operating income 987 632 12,042 14,514
------- ------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense (2,747) (2,822) (8,143) (8,603)
Interest income 146 153 449 518
------- ------- -------- --------
(2,601) (2,669) (7,694) (8,085)
------- ------- -------- --------
(LOSS) INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM (1,614) (2,037) 4,348 6,429
INCOME TAX BENEFIT (PROVISION) 678 855 (1,826) (2,700)
------- ------- -------- --------
(LOSS) INCOME BEFORE EXTRAORDINARY ITEM (936) (1,182) 2,522 3,729
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT, net of
income tax benefit of $573 0 0 (935) 0
------- ------- -------- --------
NET (LOSS) INCOME $ (936) $(1,182) $ 1,587 $ 3,729
======= ======= ======== ========
PER COMMON SHARE:
(Loss) Income before extraordinary item $ (0.12) $ (0.15) $ 0.33 $ 0.48
Extraordinary loss on early extinguishment
of debt 0.00 0.00 (0.12) 0.00
------- ------- -------- --------
NET (LOSS) INCOME PER COMMON SHARE $ (0.12) $ (0.15) $ 0.21 $ 0.48
======= ======= ======== ========
COMMON SHARES OUTSTANDING 7,725 7,725 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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FOR THE NINE MONTHS ENDED
SEPTEMBER 30
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1996 1995
-----------------------------
(Unaudited) (Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,587 $ 3,729
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Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 19,634 18,953
Gain on sale of property and equipment (68) (45)
Extraordinary loss on early extinguishment
of debt, net 935 0
Deferred income taxes 81 (1,395)
Change in operating assets and liabilities:
Receivables, net of allowance for doubtful accounts (4,498) (3,300)
Inventories 311 (111)
Prepayments and other current assets (882) (1,628)
Trade accounts payable 3,714 2,667
Accrued liabilities 4,674 (1,665)
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Total adjustments 23,901 13,476
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Net cash provided by operating activities 25,488 17,205
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (19,731) (13,102)
Proceeds from sale of property and equipment 3,398 777
Increase in the cash surrender value of life insurance (1,860) (179)
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Net cash used in investing activities (18,193) (12,504)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (48,391) (10,258)
Proceeds from issuance of long-term debt 42,190 0
Other, net (695) 858
------- --------
Net cash used in financing activities (6,896) (9,400)
------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (19) 305
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 380 (4,394)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,147 11,712
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $11,527 $ 7,318
======= ========
</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 and nine month periods
ended September 30, 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 $87.6 million for the third quarter of 1996,
compared to $82.2 million for the third quarter of 1995, an
increase of 6.6%. For the first nine months of 1996, revenues
increased 0.9% to $288.2 million compared to $285.5 million for
the same nine-month period in 1995. The increase in revenues was
primarily due to an increase in the number of vehicles delivered.
The company delivered 11.5% more vehicles in the third quarter of
1996 than in the third quarter of 1995 and 4.0% more vehicles in
the first nine months of 1996 than in the same nine month period
in 1995. The additional revenues generated from the increase in
deliveries were partially offset by a change in the mix of
vehicles delivered, primarily in Canada. The number of
cross-border deliveries as a percentage of total deliveries
increased which caused a decrease in the revenue generated per
unit delivered.
The company experienced a net loss of $936,000 during the third
quarter of 1996, versus a loss of $1.2 million during the third
quarter of 1995, or $0.12 per share in 1996, versus $0.15 per
share in 1995. The third quarter results were impacted by a sharp
rise in diesel fuel prices which increased approximately 9% from
the third quarter of 1995, reducing earnings by approximately
$0.05 per share. In addition, the third quarter results were
adversely impacted by a change in the mix of vehicles delivered,
an increase in liability claims cost, and approximately $0.8
million of budgeted start-up costs for the Axis Group. The Axis
Group is a wholly-owned subsidiary formed during 1996 to provide
logistics solutions to the automotive industry.
Net income was $2.5 million, or $0.33 per share for the first nine
months of 1996, compared with net income of $3.7 million, or $0.48
per share for the comparable nine-month period a year ago,
(excluding a $935,000 extraordinary loss on the early
extinguishment of debt recorded during the first quarter of 1996).
Net income during the first nine months of 1996 was impacted by
the strike at a number of General Motors manufacturing plants
during March 1996, the severe winter weather during the first
quarter of 1996, and the sharp rise in diesel fuel prices
throughout the first nine months of 1996.
7
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Salaries, wages and fringe benefits were 53.3% of revenues for the
third quarter of 1996 compared to 54.6% for the third quarter of
1995. Therefore, a portion of salaries, wages and fringe
benefits are fixed expenses, and remained constant as revenues
increased over the third quarter of 1995, resulting in salaries,
wages and fringe benefits decreasing as a percentage of revenues.
Salaries, wages and fringe benefits increased from 51.8% of
revenues for the first nine months of 1995 to 52.7% of revenues
for the first nine months of 1996. This change as a percentage of
revenues is primarily due to inefficiencies and increased costs
resulting from the General Motors' strike during March 1996, the
severe winter weather during the first quarter of 1996 and the
additional costs related to the start-up of the Axis Group.
Operating supplies and expenses as a percentage of revenues
decreased from 16.5% for the third quarter of 1995 to 16.4% for
the third quarter of 1996. For the nine months ended September
30, 1996, these costs decreased to 15.9% of revenues from 16.4%
for the same period in 1995. Operating supplies and expenses have
decreased despite the rise in diesel fuel prices. This decrease
is primarily due to the use of newer, more efficient equipment
which has reduced the costs to operate the Company's rigs and has
increased fuel efficiency. In addition, the Company has
implemented productivity and efficiency programs that have reduced
operating expenses.
Insurance and claims expense was 4.8% of revenues for the third
quarter of 1996 compared to 4.0% for the third quarter of 1995.
For the first nine months of 1996, insurance and claims expense
was 4.3% of revenues versus 4.1% of revenues in the first nine
months of 1995. Insurance and claims expense has been impacted by
increased liability claims costs during the third quarter of 1996.
. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $25,488,000 for
the nine months ended September 30, 1996 versus net cash provided
by operating activities of $17,205,000 for the same period in
1995. This increase in cash flows from operations is mainly due
to changes in working capital.
Net cash used in investing activities totaled $18,193,000 for the
nine months ended September 30, 1996 versus $12,504,000 for the
same period in 1995. This increase was primarily due to an
increase in the number of new rigs that were acquired,
modifications of existing equipment, and renovations and additions
to terminal and maintenance facilities.
8
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Net cash used in financing activities totaled $6,896,000 for the
nine months ended September 30, 1996 versus net cash used in
financing activities of $9,400,000 for the same period in 1995.
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 nine months of 1996,
$48,391,000 of long-term debt was repaid. During the first nine
months of 1995, the company repaid $10,258,000 of long-term debt.
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.
9
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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: There were no reports filed on Form
8-K for the quarter ended September
30, 1996.
10
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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.
November 8, 1996 /s/ A. Mitchell Poole, Jr.
---------------- --------------------------------------
(Date) A. Mitchell Poole, Jr.
on behalf of Registrant as
President and Chief Operating Officer
11
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ALLIED HOLDINGS, INC. FOR THE NINE MONTH ENDED
SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 11,527
<SECURITIES> 0
<RECEIVABLES> 27,200
<ALLOWANCES> 0
<INVENTORY> 3,875
<CURRENT-ASSETS> 55,888
<PP&E> 132,977
<DEPRECIATION> 0
<TOTAL-ASSETS> 218,598
<CURRENT-LIABILITIES> 52,434
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 54,673
<TOTAL-LIABILITY-AND-EQUITY> 218,598
<SALES> 288,174
<TOTAL-REVENUES> 288,174
<CGS> 276,132
<TOTAL-COSTS> 276,132
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,143
<INCOME-PRETAX> 4,348
<INCOME-TAX> 1,826
<INCOME-CONTINUING> 2,522
<DISCONTINUED> 0
<EXTRAORDINARY> (935)
<CHANGES> 0
<NET-INCOME> 1,587
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
</TABLE>
