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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 SEPTEMBER 30,
1997
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. AND ITS SUBSIDIARIES LISTED IN FOOTNOTE (1) BELOW
- -------------------------------------------------------------------------------
(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)
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)
</TABLE>
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, 1997........... 7,818,667
(1) This Form 10-Q is also being filed by the co-registrants specified under the
caption "Co-Registrants", each of which is a wholly-owned subsidiary of Allied
Holdings, Inc. and each of which has met the conditions for the filing of Form
10-Q in a reduced disclosure format.
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 21
1
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CO-REGISTRANTS
This Form 10-Q is also being filed by the following entities:
<TABLE>
<CAPTION>
STATE OR OTHER
JURISDICTION OF I.R.S. EMPLOYER
NUMBER OF SHARES INCORPORATION OR COMMISSION FILED IDENTIFICATION
NAME, ADDRESS AND TELEPHONE NUMBER OUTSTANDING ORGANIZATION NUMBER NUMBER
- ------------------------------------ ----------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C>
1. Allied Automotive Group, Inc. 100,000 Georgia 333-37113 58-2201081
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
2. Allied Industries Incorporated 1,000 Georgia 333-37113 58-1850174
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
3. Haul Risk Management Services, Inc. 500 Georgia 333-37113 58-2204629
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
4. Link Information Systems, Inc. 500 Georgia 333-37113 58-2253768
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
5. Allied Southwoods, Inc. 1,000 Georgia 333-37113 58-2328035
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
6. Axis Group, Inc. 500 Georgia 333-37113 58-2204628
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
7. Allied Systems, Ltd. (L.P.) 100% OF THE Georgia 333-37113 58-1710028
160 Clairemont Avenue, Suite 510 OUTSTANDING
Decatur, Georgia 30030 PARTNERSHIP
404/370-1100 INTERESTS
8. Allied, Inc. 76 Texas 333-37113 75-0121472
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
9. Inter Mobile, Inc. 1,000 Georgia 333-37113 58-1859127
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
10. Legion Transportation, Inc. 750 Georgia 333-37113 59-3041067
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
11. Innovative Car Carriers, Inc. 750 Delaware 333-37113 59-3041519
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
12. Automotive Transport Services, Inc. 500 Georgia 333-37113 58-1835655
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
13. Auto Haulaway, Inc. 30,303,721 Ontario, Canada 333-37113 52-1952252
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
</TABLE>
2
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<TABLE>
<S> <C> <C> <C> <C>
14. Axis International, Inc. 500 Georgia 333-37113 58-2339087
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
15. Axis Truck Leasing, Inc. 500 Georgia 333-37113 58-2272795
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
16. Axis North America, Inc. 500 Georgia 333-37113 58-2273308
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
17. Auto Haulaway Releasing Services (1981) 100 Ontario, Canada 333-37113 100347467
Limited
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
18. Decatur Driver Exchange Company, Inc. 500 Georgia 333-37113 58-2272793
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
19. Clairemont Driver Exchange Company, 500 Georgia 333-37113 58-2273306
Inc.
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
20. Kar-Tainer International, Inc. 100 Florida 333-37113 65-0252817
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
21. AH Acquisition Corp. 500 Georgia 333-37113 58-2339469
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
22. Canadian Acquisition Corp. 500 Georgia 333-37113 58-2339472
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
23. Axis National Incorporated 500 Georgia 333-37113 58-2339474
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
24. RC Management Corp. 100 Delaware 333-37113 65-071002
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
25. Ryder Automotive Carrier Services, Inc. 1,000 Florida 333-37113 58-1953041
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
26. Ryder Automotive Acquisition LLC 100% OF THE Georgia 333-37113 65-0783421
160 Clairemont Avenue, Suite 510 OUTSTANDING
Decatur, Georgia 30030 MEMBERSHIP
404/370-1100 INTERESTS
27. MCL Ryder Transport, Inc. 200 Canada 333-37113 321235-1
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
28. Ryder Automotive Operations, Inc. 1,000 Florida 333-37113 58-1944786
160 Clairemont Avenue, Suite 510
Decatur, Georgia 30030
404/370-1100
</TABLE>
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<S> <C> <C> <C> <C>
29. Ryder Freight Broker, Inc. 1,000 Virginia 333-37113 59-2876864
10701 Middlebelt Road
Romulus, Michigan 48174
404/370-1100
30. QAT, Inc. 1,000 Florida 333-37113 59-2876863
300 East Long lake Road, Suite 280
Bloomfield Hills, Michigan 48304
404/370-1100
31. OSHCO, Inc. 1,000 Florida 333-37113 38-2853268
10701 Middlebelt Road
Romulus, Michigan 48174
404/370-1100
32. Terminal Service Co. 50 Washington 333-37113 91-0847582
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
33. F.J. Boutell Driveaway Co., Inc. 1,239 Michigan 333-37113 38-0365100
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
34. RMX, Inc. 100 Delaware 333-37113 31-0961359
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
35. Transport Support, Inc. 100 Delaware 333-37113 38-2349563
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
36. Commercial Carriers, Inc. 1,000 Michigan 333-37113 38-0436930
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
37. B&C, Inc. 200 Michigan 333-37113 38-1377932
1450 West Long Lake Road
Troy, Michigan 48098
404/370-1100
</TABLE>
None of the above-named co-registrants have been subject to the filing
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, for 90 days or more.
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INDEX
PART I
FINANCIAL INFORMATION
PAGE
ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets as of September 30, 1997 and
December 31, 1996 .................................................. 6
Consolidated Statements of Operations for the Three
and Nine Month Periods Ended September 30, 1997 and 1996............ 7
Consolidated Statements of Cash Flows for the Nine
Month Periods Ended September 30, 1997 and 1996..................... 8
Notes to Consolidated Financial Statements............................ 9
ITEM 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations................................. 11
PART II
OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K ..................................... 13
Signature Page ....................................................... 15
5
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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>
SEPTEMBER 30 DECEMBER 31
1997 1996
---------------------------
(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 8,323 $ 1,973
Short-term investments 12,215 8,520
Receivables, net of allowance for doubtful accounts 76,241 22,673
Inventories 5,366 4,096
Deferred tax assets 13,555 353
Prepayments and other current assets 24,580 11,587
---------- ----------
Total current assets 140,279 49,202
---------- ----------
PROPERTY AND EQUIPMENT, NET 283,505 132,552
---------- ----------
OTHER ASSETS:
Goodwill, net 98,488 22,081
Notes receivable due from related parties 573 573
Other 21,115 6,675
---------- ----------
Total other assets 120,176 29,329
---------- ----------
Total assets $ 543,960 $ 211,083
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $2,955 $2,275
Trade accounts payable 30,593 15,872
Accrued liabilities 117,257 30,347
---------- ----------
Total current liabilities 150,805 48,494
---------- ----------
LONG-TERM DEBT, LESS CURRENT MATURITIES 233,883 93,708
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 12,387 3,621
---------- ----------
DEFERRED INCOME TAXES 28,487 7,487
---------- ----------
OTHER LONG-TERM LIABILITIES 63,858 1,064
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, no par value; 20,000 shares authorized, 7,810
shares outstanding 0 0
Additional paid-in capital 43,657 43,657
Retained earnings 12,512 14,475
Foreign currency translation adjustment, net of tax (1,050) (743)
Unearned compensation (579) (680)
---------- ----------
Total stockholders' equity 54,540 56,709
---------- ----------
Total liabilities and stockholders' equity $ 543,960 $ 211,083
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
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ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES $ 91,384 $ 87,609 $ 300,353 $ 288,174
---------- ---------- ----------- ----------
OPERATING EXPENSES:
Salaries, wages and fringe benefits 50,747 46,687 160,381 152,002
Operating supplies and expenses 14,891 14,396 47,454 45,922
Purchased transportation 7,530 7,390 26,700 25,056
Insurance and claims 2,959 4,243 11,057 12,282
Operating taxes and licenses 3,482 3,901 11,672 12,282
Depreciation and amortization 6,893 6,703 20,679 19,634
Rents 1,217 1,266 3,687 3,747
Communications and utilities 673 750 2,207 2,490
Other operating expenses 1,234 1,286 3,308 2,717
Acquisition related realignment 8,914 0 8,914 0
---------- --------- ----------- ----------
Total operating expenses 98,540 86,622 296,059 276,132
---------- --------- ----------- ----------
Operating (loss) income (7,156) 987 4,294 12,042
---------- --------- ----------- ----------
OTHER INCOME (EXPENSE):
Interest expense (2,824) (2,747) (8,232) (8,143)
Interest income 199 146 556 449
---------- --------- ----------- ----------
(2,625) (2,601) (7,676) (7,694)
---------- --------- ----------- ----------
(LOSS) INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM (9,781) (1,614) (3,382) 4,348
INCOME TAX BENEFIT (PROVISION) 4,107 678 1,419 (1,826)
---------- --------- ----------- ----------
(LOSS) INCOME BEFORE EXTRAORDINARY ITEM (5,674) (936) (1,963) 2,522
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT, NET OF
INCOME TAX BENEFIT OF $573 0 0 0 (935)
--------- --------- ----------- ----------
NET (LOSS) INCOME $ (5,674) $ (936) $ (1,963) $ 1,587
========= ========= =========== ==========
PER COMMON SHARE:
(Loss) Income before extraordinary item $ (0.73) $ (0.12) $ (0.25) $ 0.33
Extraordinary loss on early extinguishment
of debt 0.00 0.00 0.00 (0.12)
--------- --------- ----------- ----------
NET (LOSS) INCOME PER COMMON SHARE $ (0.73) $ (0.12) $ (0.25) $ 0.21
========= ========= =========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 7,725 7,725 7,725 7,725
========= ========= =========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
7
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ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30
-------------------------
1997 1996
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (1,963) $ 1,587
---------- ----------
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
Depreciation and amortization 20,679 19,634
Loss (Gain) on sale of property and equipment 44 (68)
Acquisition related realignment 8,914 0
Extraordinary loss on early extinguishment
of debt, net 0 935
Deferred income taxes 1,853 81
Change in operating assets and liabilities, excluding effect of
businesses acquired: (5,780) (4,498)
Inventories 574 311
Prepayments and other current assets 1,686) (882)
Trade accounts payable (5,618) 3,714
Accrued liabilities (990) 4,674
---------- ----------
Total adjustments 17,990 23,901
---------- ----------
Net cash provided by operating activities 16,027 25,488
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (10,561) (19,731)
Proceeds from sale of property and equipment 569 3,398
Purchase of businesses, net of cash acquired (125,380) 0
Increase in short-term investments (3,695) 0
Increase in the cash surrender value of life insurance (1,722) (1,860)
---------- ----------
Net cash used in investing activities (140,789) (18,193)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (78,008) (48,391)
Proceeds from issuance of long-term debt 216,953 42,190
Other, net (7,795) (695)
---------- ----------
Net cash provided by (used in) financing activities 131,150 (6,896)
---------- ----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (38) (19)
NET INCREASE IN CASH AND CASH EQUIVALENTS 6,350 380
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,973 11,147
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,323 $ 11,527
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
8
<PAGE> 9
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, 1997
are not necessarily indicative of the results that may be expected
for the year ended December 31, 1997. 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 1996 Annual
Report on Form 10-K.
Note 2. Long-Term Debt
On September 30, 1997, the Company issued and sold $150,000,000 of 8
5/8% senior notes (the "Notes") through a private placement. The
Company raised approximately $144,650,000, net of discounts and
expenses, through the issuance of the Notes. The net proceeds from
the Notes were used to fund the acquisition, of Ryder Automotive
Carrier Services, Inc. and RC Management Corp., pay related fees and
expenses, and reduce amounts owed on outstanding Company debt. The
Company's obligations under the Notes are guaranteed by substantially
all of the subsidiaries of the Company (the "Guarantors"). Separate
financial statements of the Guarantors are not provided herein as (i)
the Guarantors are jointly and severally liable for the Company's
obligations under the Notes, (ii) the subsidiaries which are not
Guarantors are inconsequential to the consolidated operations of the
Company and its subsidiaries and (iii) the net assets and earnings of
the Guarantors are substantially equivalent to the net assets and
earnings of the consolidated entity as reflected in these
consolidated financial statements.
In September 1997, the Company also entered into a new credit
facility due in 2002, which allows the Company to borrow under a
revolving line of credit and issue letters of credit up to the lesser
of $230 million or a borrowing base amount that is determined based
on a defined percentage of the Company's accounts receivable and
equipment. The interest rate for the new credit facility will be, at
the Company's option, either (i) the bank's Base Rate, or (ii) the
bank's Eurodollar rate, plus an applicable margin as defined.
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
9
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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.
Note 3. Acquisition of Ryder Automotive Carrier Services, Inc. and RC
Management Corp.
On September 30, 1997, the Company completed the acquisition of Ryder
Automotive Carrier Services, Inc. and RC Management Corp. from Ryder
System, Inc. (the "Acquisition") for approximately $114.5 million in
cash, subject to post-closing adjustments. The subsidiaries of Ryder
Automotive Carrier Services are engaged in car hauling, vehicle
processing and dealer prep, rail unloading and loading services of
vehicle railcars, and rail and port yard management. RC Management
Corp. is principally involved in providing logistics services to the
new retail used car superstores. Ryder's automotive carrier group,
headquartered in Troy, Michigan, has approximately 3,400 rigs at 91
locations in 34 states and Canada. Its revenues in 1996 were
approximately $600 million.
Note 4. Acquisition of Kar-Tainer International Limited
In April 1997, the Company completed the acquisition of the stock of
Kar-Tainer International Limited for $13.1 million. Kar-Tainer is a
wholly-owned subsidiary of the Axis Group, Inc., a wholly-owned
subsidiary of the Company. Kar-Tainer, with offices in the United
States, Bermuda, London, and South Africa, is a leader in the
containerized shipping of vehicles. Kar-Tainer has been involved in
the containerized shipment of completely built up (CBU) and semi
knocked down (SKD) vehicles in international markets since 1983.
Kar-Tainer has worked with vehicle manufacturers and shipping lines
around the world, and is a leader in the design and manufacture of
ramps, frames, and cassettes for the shipment of CBU and SKD vehicles
in standard ISO containers.
Note 5. Acquisition Related Realignment
On September 30, 1997, the Company recorded a pre-tax charge of $8.9
million (after-tax $5.2 million, or $0.67 per share) to write down
equipment and terminal facilities that will be idled or closed as a
result of the Ryder acquisition. The Company plans to consolidate
approximately 19 terminals, or approximately 14% of its terminal
locations, which, as a result of the acquisition are located in close
proximity to one another. These actions are expected to reduce the
number of rigs the Company will operate.
Note 6. Earnings per Share
In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128, "Earnings per Share." This new statement will not
result in changes to the Company's earnings per share for the first
nine months of 1997 or prior years.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues for the third quarter of 1997 were $91.4 million, compared
with revenues of $87.6 million reported for the third quarter of 1996,
an increase of 4%. Revenues for the nine-month period ended September
30, 1997 were $300.4 million, versus revenues of $288.2 million
reported for the same period last year, a 4% increase. The increase in
revenues during 1997 was primarily due to an increase in the number of
vehicles delivered by the Company together with an increase in the
revenue generated per vehicle delivered. The Company delivered
approximately 3% more vehicles during the first nine months of 1997
than during the first nine months of 1996. The increase is primarily
due to increases in new vehicles sales, especially in Canada. A 14%
increase in vehicle deliveries in Canada, due to increased Canadian new
vehicle production and sales, more than offset a 2% decline in vehicle
deliveries in the United States. In addition, the revenue generated per
vehicle delivered for the first nine months of 1997 increased
approximately 2% from the first nine months of 1996 due to an increase
in longer haul dealer deliveries.
The Company experienced a net loss of $0.5 million during the third
quarter of 1997, versus a loss of $0.9 million during the third quarter
of 1996, or $0.06 per share in 1997, versus $0.12 per share in 1996.
Net income was $3.2 million, or $0.42 per share, for the nine-months
period ended September 30, 1997, compared with net income of $2.5
million, or $0.33 per share, for the comparable nine-month period a
year ago, an increase of 28% (excluding a $935,000 extraordinary loss
on the early extinguishment of debt recorded during the first quarter
of 1996). The 1997 results discussed above exclude an after-tax charge
of approximately $5.2 million, or $0.67 per share, the Company recorded
during the third quarter of 1997 to write down Company rigs and
terminal facilities that will be idled or closed as a result of the
Ryder acquisition.
Salaries, wages and fringe benefits as a percentage of revenues
increased for the third quarter of 1997 to 56% from 53% for the third
quarter of 1996. The increase is primarily due to an increase in the
percentage of vehicles delivered by Company drivers compared to
owner-operators together with an increase in corporate office personnel
in anticipation of the Ryder acquisition. However, salaries, wages and
fringe benefits as a percentage of revenues for the nine months ended
September 30, 1997 remained approximately unchanged from the first nine
months of 1996. A decrease in salaries, wages and benefits during the
first nine months of 1997 resulting from a decrease in the percentage
of vehicles delivered by Company drivers compared to owner-operators
was offset by additional salaries, wages and benefits at the Company's
logistics subsidiary, Axis Group, Inc. together with an increase in the
Company's corporate office personnel.
Operating supplies and expenses as a percentage of revenues remained
approximately unchanged during both the third quarter of 1997 compared
to 1996 and the first nine months of 1997 compared to the first nine
months of 1996.
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Purchased transportation was 8.2% of revenues during the third quarter
of 1997 compared to 8.4% of revenues for the third quarter of 1996.
The decrease is primarily due to an increase in the percentage of
vehicles delivered by Company drivers compared to owner-operators. For
the nine months ended 1997, purchased transportation was 8.9% of
revenues compared to 8.7% of revenues for the nine months ended 1997.
This increase is due to increased use of owner-operators together with
an increase in the number of vehicles delivered for the Company by
other carriers.
Insurance and claims expense decreased from 4.8% of revenues during
the third quarter of 1996 to 3.8% of revenues during the third quarter
of 1997, and from 4.3% of revenues for the first nine months of 1996
to 3.7% of revenues for the first nine months of 1997. The decrease
was primarily due to a decrease in liability claims for cargo damage.
Operating taxes and licenses decreased from 4.5% of revenues for the
third quarter of 1996 to 3.8% of revenues for the third quarter of
1997, and decreased from 4.3% for the nine months ended 1996 to 3.9% of
revenues for the nine months ended 1997. The decrease was primarily due
to a decline in the operating taxes and licenses the Company paid for
its fleet of specialized tractor-trailers ("Rigs") due to a decrease in
the number of active Rigs the Company operated.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $16,027,000 for the
nine months ended September 30, 1997 versus $25,488,000 for the same
period in 1996. This decrease in cash flows from operations is mainly
because of a decrease in the Company's accounts payable from December
31, 1996 to September 30, 1997.
Net cash used in investing activities totaled $140,789,000 for the nine
months ended September 30, 1997 versus $18,193,000 for the same period
in 1996. This increase was primarily due to the acquisition of Ryder
Automotive Carrier Services, Inc. and RC Management Corp. in September
1997 and Kar-Tainer International Limited in April 1997. Capital
expenditures decreased to $10,561,000 for the nine months ended
September 30 ,1997 versus $19,731,000 for the same period in 1996. The
decrease is due to a decrease in the number of Rigs that were
purchased.
Net cash provided by financing activities totaled $131,150,000 for the
nine months ended September 30, 1997 versus net cash used in financing
activities of $6,896,000 for the same period in 1996. During 1997, the
Company had $216,953,000 of proceeds from issuance of long-term debt
and repaid $78,008,000 of long-term debt. During 1996, the Company
issued $40,000,000 of senior subordinated notes, the proceeds of which
were used to repay long-term debt.
12
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SEASONALITY AND INFLATION
The Company's revenues are seasonable, with the second and fourth
quarters generally experiencing higher revenues than the first and
third quarters. The volume of vehicles shipped during the second and
fourth quarters is generally higher due to the introduction of new
models which are shipped to dealers during those periods and the higher
spring and early summer sales of automobiles and light trucks. During
the first and third quarters, vehicle shipments typically decline due
to lower sales volume during those periods and scheduled plant shut
downs which primarily occur during the third quarter. Inflation has
not significantly affected the Company's results of operations.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See attached exhibit index
(b) Reports on Form 8-K: The Company filed a Form 8-K dated
September 2, 1997 containing preliminary
pro forma financial statements giving
effect to the offering of the Notes
and the Acquisition.
The Company filed a Form 8-K dated August
29, 1997 announcing the execution of a
definitive agreement on the Acquisition.
The Company filed a Form 8-K dated August
13, 1997 announcing that Canada's
Competition Bureau had no objections
regarding the proposed Acquisition.
The Company filed a Form 8-K dated July
22, 1997 announcing that the period for
anti-trust review under the Hart-Scott
Rodini Act of the proposed Acquisition
expired without action by federal
regulatory agencies.
13
<PAGE> 14
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
4.1 Indenture dated September 30, 1997 by and among the Company, the
Guarantors and The First National Bank of Chicago as Trustee
(Incorporated by reference from Registration Statement on Form S-4, as
filed with the Commission on October 3, 1997, Commission File No.
33-37113).
4.2 Purchase Agreement dated September 19, 1997 by and among the Company
and the Initial Purchasers (Incorporated by reference from
Registration Statement on Form S-4, as filed with the Commission on
October 3, 1997. Commission File No. 33-37113).
4.3 Form of 8 5/8% Series A Senior Note due 2007 (included in Exhibit 4.1)
(Incorporated by reference from Registration Statement on Form S-4, as
filed with the Commission on October 3, 1997, Commission File No.
33-37113).
4.4 Registration Rights Agreement dated September 30, 1997 by and between
the Company and Bear, Stearns & Co. Inc., as Initial Purchaser
(Incorporated by reference from Registration Statement on Form S-4, as
filed with the Commission on October 3, 1997, Commission File No.
33-37113).
4.5 $230 million Revolving Credit Agreement among Allied Holdings, Inc.
and BankBoston, N.A., individually and as Administrative Agent, et
al., dated September 30, 1997 (Incorporated by reference from
Registration Statement on Form S-4, as filed with the Commission on
October 3, 1997, Commission File No. 33-37113).
4.6 Form of 8 5/8% Series B Senior Note due 2007 (included in Exhibit
4.1). (Incorporated by reference from Registration Statement on Form
S-4, as filed with the Commission on October 3, 1997, Commission File
No. 33-37113).
4.7 Form of Guarantee (included in Exhibit 4.1) (Incorporated by reference
from Registration Statement on Form S-4, as filed with the Commission
on October 3, 1997, Commission File No. 33-37113).
27 Financial Data Schedule (for SEC purposes only).
99.3 Acquisition Agreement among Allied Holdings, Inc., AH Acquisition
Corp., Canadian Acquisition Corp., and Axis International Incorporated
and Ryder System, Inc. dated August 20, 1997 (Incorporated by
reference from Form 8-K filed with the Commission on August 29, 1997).
- -------------------
14
<PAGE> 15
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 13, 1997 /s/ A. Mitchell Poole, Jr.
- ----------------- -----------------------------------
(Date) A. Mitchell Poole, Jr.
on behalf of Registrant as
President, Chief Operating Officer,
Chief Financial Officer and
Assistant Secretary
15
<PAGE> 16
Pursuant to the requirements of the Securities Exchange Act of 1934,
the co-registrants have duly caused this report to be signed on their behalf by
the undersigned thereunto duly authorized.
<TABLE>
<S> <C>
ALLIED AUTOMOTIVE GROUP, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary
ALLIED INDUSTRIES INCORPORATED
November 13, 1997 By /s/Daniel H. Popky
- ----------------- --------------------------------------------------------------
(Date) Daniel H. Popky, Vice President and Chief Financial
Officer
HAUL RISK MANAGEMENT SERVICES, INC.
November 13, 1997 By /s/Daniel H. Popky
- ----------------- --------------------------------------------------------------
(Date) Daniel H. Popky, Secretary, Treasurer and Chief Financial
Officer
LINK INFORMATION SYSTEMS, INC.
November 13, 1997 By /s/Daniel H. Popky
- ----------------- --------------------------------------------------------------
(Date) Daniel H. Popky, Vice President, Chief Financial Officer
ALLIED SOUTHWOODS, INC.
November 13, 1997 By /s/Daniel H. Popky
- ----------------- --------------------------------------------------------------
(Date) Daniel H. Popky, Vice President and Chief Financial
Officer
AXIS GROUP, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
</TABLE>
16
<PAGE> 17
<TABLE>
<S> <C>
ALLIED SYSTEMS, LTD. (L.P.)
BY: ALLIED AUTOMOTIVE GROUP, INC., as Managing
General Partner
November 13, 1997 By /s/David S. Forbes
- ----------------- -----------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
Treasurer and Assistant Secretary
ALLIED, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -----------------------------------------------------------
(Date) David S. Forbes, Vice President, Secretary and Chief
Financial Officer
INTER MOBILE, INC.
November 13, 1997 By /s/Joseph W. Collier
- ----------------- -----------------------------------------------------------
(Date) Joseph W. Collier, Vice President and Chief Financial
Officer
LEGION TRANSPORTATION, INC.
November 13, 1997 By /s/Joseph W. Collier
- ----------------- -----------------------------------------------------------
(Date) Joseph W. Collier, President and Chief Financial Officer
INNOVATIVE CAR CARRIERS, INC.
November 13, 1997 By /s/Joseph W. Collier
- ----------------- -----------------------------------------------------------
(Date) Joseph W. Collier, President and Chief Financial Officer
AUTOMOTIVE TRANSPORT SERVICES, INC.
November 13, 1997 By /s/Joseph W. Collier
- ----------------- -----------------------------------------------------------
(Date) Joseph W. Collier, President and Chief Financial Officer
AUTO HAULAWAY, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -----------------------------------------------------------
(Date) David S. Forbes, Vice President and Chief Financial Officer
</TABLE>
17
<PAGE> 18
<TABLE>
<S> <C>
AXIS INTERNATIONAL, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
AXIS TRUCK LEASING, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ---------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
AXIS NORTH AMERICA, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ---------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
AUTO HAULAWAY RELEASING SERVICES
(1981) LIMITED
November 13, 1997 By /s/David S. Forbes
- ----------------- ----------------------------------------------------------------
(Date) David S. Forbes, Vice President and Chief Financial Officer
DECATUR DRIVER EXCHANGE COMPANY, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ----------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
CLAIREMONT DRIVER EXCHANGE COMPANY, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ----------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
KAR-TAINER INTERNATIONAL, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ----------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C>
AH ACQUISITION CORP.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes, Chief Financial Officer and Secretary
CANADIAN ACQUISITION CORP.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes., Chief Financial Officer and Secretary
AXIS NATIONAL INCORPORATED
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes, Chief Financial Officer and Secretary
RC MANAGEMENT CORP.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
RYDER AUTOMOTIVE CARRIER SERVICES, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
and Assistant Secretary
RYDER AUTOMOTIVE ACQUISITION LLC
BY: CANADIAN ACQUISITION CORP, as Member
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes., Chief Financial Officer and Secretary
MCL RYDER TRANSPORT, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- --------------------------------------------------------------------
(Date) David S. Forbes, Vice President and Chief Financial
Officer
</TABLE>
19
<PAGE> 20
<TABLE>
<CAPTION>
<S> <C>
RYDER AUTOMOTIVE OPERATIONS, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
and Assistant Secretary
RYDER FREIGHT BROKER, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- ------------------------------------------------------------------
(Date) David S. Forbes, Chief Financial Officer and Assistant
Secretary
QAT, INC.
November 13, 1997 By /s/Daniel H. Popky
- ----------------- -------------------------------------------------------------------
(Date) Daniel H. Popky, Vice President, Chief Financial Officer
and Secretary
OSHCO, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
TERMINAL SERVICE CO.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
F.J. BOUTELL DRIVEWAY CO., INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
and Assistant Secretary
RMX, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
and Assistant Secretary
</TABLE>
20
<PAGE> 21
<TABLE>
<S> <C>
TRANSPORT SUPPORT, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial Officer
and Assistant Secretary
COMMERCIAL CARRIERS, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------------
(Date) David S. Forbes, Vice President, Chief Financial officer
and Assistant Secretary
B&C, INC.
November 13, 1997 By /s/David S. Forbes
- ----------------- -------------------------------------------------------------------------
(Date) David S. Forbes, Vice President and Chief Financial Officer
and Assistant Secretary
</TABLE>
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ALLIED HOLDINGS, INC. FOR THE NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000909950
<NAME> ALLIED HOLDINGS INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 8,323
<SECURITIES> 12,215
<RECEIVABLES> 76,241
<ALLOWANCES> 0
<INVENTORY> 5,365
<CURRENT-ASSETS> 140,279
<PP&E> 283,505
<DEPRECIATION> 0
<TOTAL-ASSETS> 543,960
<CURRENT-LIABILITIES> 150,805
<BONDS> 233,883
0
0
<COMMON> 0
<OTHER-SE> 54,540
<TOTAL-LIABILITY-AND-EQUITY> 543,960
<SALES> 300,353
<TOTAL-REVENUES> 300,353
<CGS> 296,059
<TOTAL-COSTS> 296,059
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,232
<INCOME-PRETAX> (3,382)
<INCOME-TAX> 1,419
<INCOME-CONTINUING> (1,963)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,963)
<EPS-PRIMARY> (0.25)
<EPS-DILUTED> (0.25)
</TABLE>
