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Previous: PHILADELPHIA CONSOLIDATED HOLDING CORP, 10-Q, 1997-08-12 |
Next: WILD OATS MARKETS INC, 10-Q, 1997-08-12 |
<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 JUNE 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.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-0360550
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
SUITE 510, 160 CLAIREMONT AVENUE, DECATUR, GEORGIA 30030
- -------------------------------------------------------------------------------
(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 August 1, 1997..............7,810,000
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 12
<PAGE> 2
INDEX
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
<S> <C>
ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 1997 and
December 31, 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the Three
and Six Month Periods Ended June 30, 1997 and 1996 . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Six
Month Periods Ended June 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . 6
ITEM 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
PART II
OTHER INFORMATION
<TABLE>
<S> <C>
ITEM 4
Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 6
Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 11
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
2
<PAGE> 3
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 3
1997 1996
----------- -----------
(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 4,409 $ 1,973
Short-term investments 8,821 8,520
Receivables, net of allowance for doubtful accounts 28,325 22,673
Inventories 4,215 4,096
Prepayments and other current assets 14,254 11,940
-------- ---------
Total current assets 60,024 49,202
-------- ---------
PROPERTY AND EQUIPMENT, NET 126,364 132,552
-------- ---------
OTHER ASSETS:
Goodwill, net 33,800 22,081
Notes receivable due from related parties 573 573
Other 7,933 6,675
-------- ---------
Total other assets 42,306 29,329
-------- ---------
Total assets $228,694 $ 211,083
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 8,248 $ 2,275
Trade accounts payable 12,910 15,872
Accrued liabilities 37,433 30,347
-------- ---------
Total current liabilities 58,591 48,494
-------- ---------
LONG-TERM DEBT, LESS CURRENT MATURITIES 96,986 93,708
-------- ---------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 3,557 3,621
-------- ---------
DEFERRED INCOME TAXES 8,700 7,487
-------- ---------
OTHER LONG-TERM LIABILITIES 703 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 18,186 14,475
Foreign currency translation adjustment, net of tax (1,074) (743)
Unearned compensation (612) (680)
-------- ---------
Total stockholders' equity 60,157 56,709
-------- ---------
Total liabilities and stockholders' equity $228,694 $ 211,083
======== =========
</TABLE>
The accompanying notes are an integral parts of these
consolidated balance sheets.
3
<PAGE> 4
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 SIX MONTHS ENDED
JUNE 30 JUNE 30
---------------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES $ 112,576 $107,169 $208,969 $200,565
--------- -------- -------- --------
OPERATING EXPENSES:
Salaries, wages and fringe benefits 57,692 54,682 109,634 105,315
Operating supplies and expenses 17,307 16,664 32,563 31,526
Purchased transportation 10,220 9,805 19,170 17,666
Insurance and claims 4,289 4,293 8,098 8,039
Operating taxes and licenses 4,332 4,495 8,190 8,381
Depreciation and amortization 6,939 6,526 13,786 12,931
Rents 1,239 1,232 2,470 2,481
Communications and utilities 764 810 1,534 1,740
Other operating expenses 1,150 697 2,074 1,431
--------- -------- -------- --------
Total operating expenses 103,932 99,204 197,519 189,510
--------- -------- -------- --------
Operating income 8,644 7,965 11,450 11,055
--------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense (2,792) (2,728) (5,408) (5,396)
Interest income 205 122 357 303
--------- -------- -------- --------
(2,587) (2,606) (5,051) (5,093)
--------- -------- -------- --------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 6,057 5,359 6,399 5,962
INCOME TAX PROVISION (2,544) (2,261) (2,688) (2,504)
--------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 3,513 3,098 3,711 3,458
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT, NET OF
INCOME TAX BENEFIT OF $573 0 0 0 (935)
--------- -------- -------- --------
NET INCOME $ 3,513 $ 3,098 $ 3,711 $ 2,523
========= ======== ======== ========
PER COMMON SHARE:
Income before extraordinary item $ 0.45 $ 0.40 $ 0.48 $ 0.45
Extraordinary loss on early extinguishment
of debt 0.00 0.00 0.00 (0.12)
---------- -------- -------- --------
NET INCOME PER COMMON SHARE $ 0.45 $ 0.40 $ 0.48 $ 0.33
========== ======== ======== ========
COMMON SHARES OUTSTANDING 7,725 $ 7,725 7,725 7,725
========== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated statements.
4
<PAGE> 5
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30
----------------------------------------
1997 1996
--------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,711 $ 2,523
Adjustments to reconcile net income to ---------------- ------------
net cash provided by operating activities:
Depreciation and amortization 13,786 12,931
Loss (gain) on sale of property and equipment 27 (359)
Extraordinary loss on early extinguishment
of debt, net 0 935
Deferred income taxes 1,405 84
Change in operating assets and liabilities:
Receivables, net of allowance for doubtful accounts (5,699) (6,149)
Inventories (128) 148
Prepayments and other current assets (2,333) (2,150)
Trade accounts payable (2,934) 1,247
Accrued liabilities 6,685 6,069
------------------ ------------
Total adjustments 10,809 12,756
------------------ ------------
Net cash provided by operating activities 14,520 15,279
------------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (6,910) (14,376)
Proceeds from sale of property and equipment 114 1,734
Purchase of business, net of cash acquired (12,898) 0
Increase in short-term investments (301) 0
Increase in the cash surrender value of life insurance (1,283) (991)
------------------ -------------
Net cash used in investing activities (21,278) (13,633)
------------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (11,404) (47,692)
Proceeds from issuance of long-term debt 20,655 40,000
Other, net 0 (513)
------------------ ------------
Net cash provided by (used in) financing activities 9,251 (8,205)
------------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (57) 69
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,436 (6,490)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,973 11,147
------------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,409 $ 4,657
================== ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE> 6
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 six month periods ended June 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
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.
Note 3. 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.
6
<PAGE> 7
Note 4. 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
six months of 1997 or prior years.
Note 5. Acquisition of Ryder Automotive Carrier Services, Inc. and RC
Management Corp.
In May 1997, the Company announced an agreement to acquire Ryder
Automotive Carrier Services, Inc. and RC Management Corp. from Ryder
System, Inc. for approximately $114.5 million, subject to the
execution of a definitive agreement between the parties. The
acquisition is expected to be completed by the end of September
1997. 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 employees number approximately 6,000, and
its revenues in 1996 were approximately $600 million.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues for the second quarter of 1997 were $112.6 million, compared
with revenues of $107.2 million reported for the second quarter of
1996, an increase of 5%. Revenues for the six-month period ended June
30, 1997 were $209.0 million, versus revenues of $200.6 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 the Company delivered together with an increase in
the revenue generated per vehicle delivered. The Company delivered
approximately 2% more vehicles during the first six months of 1997
than during the first six months of 1996. A 13% increase in vehicle
deliveries in Canada due to increased Canadian new vehicle production
and sales more than offset a 4% decline in vehicle deliveries in
the United States. In addition, the revenue generated per vehicle
delivered for the first six months of 1997 increased approximately
2% from the first six months of 1996 due to an increase in longer
haul dealer deliveries.
Net income was $3.5 million during the second quarter of 1997, versus
$3.1 million during the second quarter of 1996, or $0.45 per share in
1997, versus $0.40 per share in 1996, an increase of 13%. Net income
was $3.7 million, or $0.48 per share, compared with net income of
$3.5 million, or $0.45 per share for the comparable six-month period
a year ago, an increase of 6% (excluding a $935,000 extraordinary
loss on the early extinguishment of debt recorded during the first
quarter of 1996). The increase in earnings is attributable to the
increase in revenues, however earnings from the increased revenues
were partially offset by losses from the Company's logistics
subsidiary, Axis Group, Inc., which have totaled approximately
$0.18 per share during the first six months of 1997, versus $0.07
per share during the first six months of 1996. The Axis Group was
formed in April 1996.
Salaries, wages and fringe benefits as well as operating supplies and
expenses as a percentage of revenues remained approximately unchanged
during both the second quarter of 1997 compared to 1996 and the first
six months of 1997 compared to the first six months of 1996.
Purchased transportation was 9.1% of revenues during both the second
quarter of 1997 and 1996, however, purchased transportation increased
from 8.8% of revenues for the first six months of 1996 to 9.2% of
revenues during the first six months of 1997. This increase for the
six month period is due to increased use of owner-operators together
with an increase in the number of vehicles delivered for the Company
by other carriers.
8
<PAGE> 9
Insurance and claims decreased from 4.0% of revenues during the
second quarter of 1996 to 3.8% of revenues during the second quarter
of 1997 and from 4.0% of revenues for the first six months of 1996 to
3.9% of revenues for the first six months of 1997. The decrease was
due to a slight decrease in liability claims for cargo damage.
Operating taxes and licenses decreased from 4.2% of revenues for the
second quarter and the first six months of 1996 to 3.9% of revenues
for the second quarter and the first six months of 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 $14,520,000 for the
six months ended June 30, 1997 versus $15,279,000 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 June 30, 1997.
Net cash used in investing activities totaled $21,278,000 for the six
months ended June 30, 1997 versus $13,633,000 for the same period in
1996. This increase was primarily due to the acquisition of
Kar-Tainer which was offset by a reduction in the purchases of
property and equipment.
Net cash provided by financing activities totaled $9,251,000 for the
six months ended June 30, 1997 versus net cash used in financing
activities of $8,205,000 for the same period in 1996. During the
first six months of 1997, the Company had $20,655,000 of borrowings
of long-term debt, approximately $13,000,000 of which was used for
the purchase of Kar-Tainer. During the second quarter of 1997, the
Company repaid $11,400,000 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 six months of 1996, $47,692,000 of
long-term debt was repaid.
SEASONALITY AND INFLATION
The Company generally experiences its highest revenues during the
second and fourth quarters of each calendar year due to the shipment
of new models. Also, the first and third quarters are impacted by
manufacturing plant downtime. During the past three years, inflation
has not significantly affected the Company's results of operations.
9
<PAGE> 10
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 22, 1997 the Annual Meeting of Shareholders was held. The
following Directors were elected for terms which will expire on the
date of the annual meeting in the year indicated below. The number
of shares voted for, against and abstentions are also indicated.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN TERM
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David G. Bannister 6,638,537 27,900 0 2000
------------------------------------------------------------------------------------------------------------------
A. Mitchell Poole, Jr. 6,638,537 27,900 0 2000
------------------------------------------------------------------------------------------------------------------
Robert J. Rutland 6,638,537 27,900 0 2000
------------------------------------------------------------------------------------------------------------------
</TABLE>
The following Directors' terms will continue as indicated.
Bernard O. De Wulf 1999
Guy W. Rutland, III 1999
Robert R. Woodson 1999
Guy W. Rutland, IV 1998
B.F. Wilson, Jr. 1998
Joseph W. Collier 1998
The Company's Long-Term Incentive Plan was amended to increase the number of
shares subject to the Plan from 400,000 to 650,000. The number of shares voted
for, against and abstentions are also indicated.
<TABLE>
<CAPTION>
----------------------------------------------------------------
FOR AGAINST ABSTAIN
----------------------------------------------------------------
<S> <C> <C>
6,532,047 103,040 31,350
----------------------------------------------------------------
</TABLE>
10
<PAGE> 11
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 May 1,
1997 regarding the acquisition of the
stock of Kar-Tainer International Limited
and a Form 8-K dated June 3, 1997 related
to the proposed acquisition of Ryder
Automotive Carrier Services, Inc. and RC
Management Corp.
11
<PAGE> 12
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.
August 12, 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
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL IFNORMATION EXTRACTED FROM THE
FINANCIAL STATMENTS OF ALLIED HOLDINGS, INC. FOR THE SIX MONTHS ENDED JUNE 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,409
<SECURITIES> 8,821
<RECEIVABLES> 28,325
<ALLOWANCES> 0
<INVENTORY> 4,215
<CURRENT-ASSETS> 60,024
<PP&E> 126,364
<DEPRECIATION> 0
<TOTAL-ASSETS> 228,694
<CURRENT-LIABILITIES> 58,591
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 60,157
<TOTAL-LIABILITY-AND-EQUITY> 228,694
<SALES> 208,969
<TOTAL-REVENUES> 208,969
<CGS> 197,519
<TOTAL-COSTS> 197,519
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,408
<INCOME-PRETAX> 6,399
<INCOME-TAX> 2,688
<INCOME-CONTINUING> 3,711
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,711
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
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