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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 ACT OF 1934 - FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the transition period from______________ to
to _____________________
Commission File Number: 0-22276
ALLIED HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
GEORGIA 58-0360550
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
SUITE 200, 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 2, 1998...........7,877,547
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 15
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INDEX
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
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ITEM 1: FINANCIAL STATEMENTS
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<S> <C> <C>
Consolidated Balance Sheets as of September 30, 1998 and
December 31, 1997. . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the Three and Nine
Month Periods Ended September 30, 1998 and 1997. . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Nine
Month Periods Ended September 30, 1998 and 1997. . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 6
ITEM 2
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Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . 9
PART II
OTHER INFORMATION
ITEM 6
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Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . 14
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1998 1997
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(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,549 $ 10,530
Short-term investments 23,931 19,540
Receivables, net of allowance for doubtful accounts 78,841 74,881
Inventories 6,779 5,391
Deferred tax assets 18,006 17,812
Prepayments and other current assets 21,663 21,519
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Total current assets 167,769 149,673
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PROPERTY AND EQUIPMENT, NET 286,489 286,214
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OTHER ASSETS:
Goodwill, net 94,813 99,310
Notes receivable due from related parties 0 573
Other 35,138 23,169
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Total other assets 129,951 123,052
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Total assets $ 584,209 $ 558,939
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $2,954 $2,980
Trade accounts payable 27,159 36,263
Accrued liabilities 105,128 118,436
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Total current liabilities 135,241 157,679
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LONG-TERM DEBT, LESS CURRENT MATURITIES 273,798 228,003
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POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 11,322 11,355
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DEFERRED INCOME TAXES 34,974 35,062
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OTHER LONG-TERM LIABILITIES 71,262 69,512
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STOCKHOLDERS' EQUITY:
Common stock, no par value; 20,000 shares authorized, 7,878
and 7,819 shares outstanding at September 30,
1998 and December 31,1997, respectively 0 0
Additional paid-in capital 44,830 43,758
Retained earnings 20,304 16,877
Foreign currency translation adjustment, net of tax (6,202) (2,826)
Unearned compensation (1,320) (481)
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Total stockholders' equity 57,612 57,328
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Total liabilities and stockholders' equity $ 584,209 $ 558,939
=============== ===============
</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
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
REVENUES $ 217,468 $ 91,384 $ 751,499 $ 300,353
--------- -------- --------- ---------
OPERATING EXPENSES:
Salaries, wages and fringe benefits 122,843 50,747 416,696 160,381
Operating supplies and expenses 39,527 14,891 132,813 47,454
Purchased transportation 20,859 7,530 67,390 26,700
Insurance and claims 8,933 2,959 28,616 11,057
Operating taxes and licenses 8,917 3,482 24,562 11,672
Depreciation and amortization 13,270 6,893 39,210 20,679
Rents 2,641 1,217 8,538 3,687
Communications and utilities 2,101 673 6,086 2,207
Other operating expenses 1,795 1,234 4,895 3,308
Acquisition related realignment 0 8,914 0 8,914
--------- -------- --------- ---------
Total operating expenses 220,886 98,540 728,806 296,059
--------- -------- --------- ---------
Operating (loss) income (3,418) (7,156) 22,693 4,294
--------- -------- --------- ---------
OTHER INCOME (EXPENSE):
Interest expense (6,564) (2,824) (18,846) (8,232)
Interest income 1,197 199 2,218 556
--------- -------- --------- ---------
(5,367) (2,625) (16,628) (7,676)
--------- -------- --------- ---------
(LOSS) INCOME BEFORE INCOME TAXES (8,785) (9,781) 6,065 (3,382)
INCOME TAX BENEFIT (PROVISION) 3,825 4,107 (2,638) 1,419
--------- -------- --------- ---------
NET (LOSS) INCOME ($ 4,960) ($ 5,674) $ 3,427 ($ 1,963)
========= ======== ========= =========
PER COMMON SHARE - BASIC AND DILUTED ($ 0.64) ($ 0.73) $ 0.44 ($ 0.25)
========= ======== ========= =========
COMMON SHARES OUTSTANDING:
BASIC 7,748 7,725 7,747 7,725
========= ======== ========= =========
DILUTED 7,748 7,725 7,858 7,725
========= ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
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ALLIED HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30
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1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,427 $ (1,963)
------------ ------------
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 39,210 20,679
Loss on sale of property and equipment 310 44
Acquisition related realignment 0 8,914
Deferred income taxes (281) 1,853
Change in operating assets and liabilities, excluding effect of
businesses acquired:
Receivables, net of allowance for doubtful accounts (3,961) (5,780)
Inventories (1,388) 574
Prepayments and other current assets (143) (1,686)
Trade accounts payable (9,106) (5,618)
Accrued liabilities (13,303) (990)
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Total adjustments 11,338 17,990
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Net cash provided by operating activities 14,765 16,027
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (36,919) (10,561)
Proceeds from sale of property and equipment 573 569
Purchase of businesses, net of cash acquired (11,920) (125,380)
Increase in short-term investments (4,391) (3,695)
Increase in the cash surrender value of life insurance (1,230) (1,722)
------------ ------------
Net cash used in investing activities (53,887) (140,789)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (1,755) (78,008)
Proceeds from issuance of long-term debt 47,524 216,953
Other, net 1,477 (7,795)
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Net cash provided by financing activities 47,246 131,150
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EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (105) (38)
NET INCREASE IN CASH AND CASH EQUIVALENTS 8,019 6,350
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10,530 1,973
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,549 $ 8,323
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
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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, 1998 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1998. 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 1997 Annual
Report on Form 10-K.
Note 2. Long-Term Debt
On September 30, 1997, the Company issued $150 million of 8 5/8% senior
notes (the "Notes") through a private placement. Subsequently, the
senior notes were registered with the Securities and Exchange
Commission. 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 outstanding
indebtedness. 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. There are no restrictions on the
ability of the Guarantors to make distributions to the Company.
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. The operating results of Ryder's Automotive
Carrier Group have been included with the Company's since the date of
acquisition.
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Note 4. Investment in Axis do Brasil
In February of 1998, the Company's wholly-owned subsidiary, Axis Group,
Inc. completed the formation of a 50 percent owned venture in Brazil.
The Brazilian venture, Axis do Brasil, is a partnership with Coimex
Trading Company of Vitoria, Brazil, which is one of the largest trading
companies in South America. Axis do Brasil is an equity partner owning
34% of a Brazilian firm, Axis Sinimbu Logistica ("ASL"). ASL provides
supply chain logistics services for the automotive industry in the
Mercosur countries. The Company accounts for its investment in Axis do
Brazil under the equity method of accounting.
Note 5. Comprehensive Income
The Company had a comprehensive loss of $7.0 million for the third
quarter 1998 versus a loss of $5.7 million for the third quarter of
1997, and comprehensive income of $0.1 million for the first nine
months of 1998 versus a loss of $2.3 million for the first nine months
of 1997. The difference between comprehensive income and net income is
changes in the foreign currency translation adjustment, net of income
taxes.
Note 6. Accounting for Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities."
The Statement establishes accounting and reporting standards requiring
that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a
derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that
receive hedge accounting.
Statement 133 is effective for fiscal years beginning after June 15,
1999. A company may also implement the Statement as of the beginning of
any fiscal quarter after issuance. Statement 133 cannot be applied
retroactively. Statement 133 must be applied to (a) derivative
instruments and (b) certain derivative instruments embedded in hybrid
contracts that were issued, acquired, or substantively modified after
December 31, 1997.
The Company has not yet quantified the impacts of adopting Statement
133 on its financial statements and has not determined the timing of or
method of adoption of Statement 133. However, the Statement could
increase the volatility in earnings and other comprehensive income.
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Note 7. Earnings per Share
In February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share." This new statement did not result in
changes to the Company's earnings per share for the first three quarters
of 1997.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenues were $217.5 million for the third quarter of 1998 versus revenues
of $91.4 million for the third quarter of 1997, an increase of 138 %. For
the nine-month period ended September 30, 1998, revenues were $751.5
million, versus revenues of $300.4 million reported for the same period
last year, a 150% increase. The significant increase in the Company's
revenues was primarily attributable to the acquisition of Ryder's
Automotive Carrier Group which was completed on September 30, 1997. The
results of Ryder's Automotive Carrier group have been included with the
Company's since the date of acquisition.
The Company experienced a net loss of $5.0 million in the third quarter of
1998 versus a net loss of $5.7 million in the third quarter of 1997. Basic
and diluted loss per share for the third quarter of 1998 were $0.64 versus
basic and diluted loss per share of $0.73 in the third quarter of 1997.
For the nine-month period ended September 30, 1998, net income was $3.4
million, compared with a net loss of $2.0 million for the comparable
nine-month period a year ago. Basic and diluted earnings per share for the
first nine months of 1998 were $0.44 versus a basic and diluted loss per
share of $0.25 during the first nine months of 1997.
The Company's revenues during the third quarter of 1998 were impacted by
work stoppages at most General Motors manufacturing plants. The Company
estimates that the work stoppages reduced third quarter revenues by
approximately $30 million and net earnings by approximately $5.1 million
or $0.65 per share. The 1997 third quarter results also include a charge
of $5.2 million, net of tax, or $0.67 per share, which the Company
recorded to write down rigs and terminal facilities idled or closed as a
result of the Ryder acquisition. Excluding the effect of the General
Motors work stoppages in 1998 and the acquisition related charge in 1997,
the Company's third quarter earnings would have been $0.02 per share in
1998 versus a loss of $0.06 per share in 1997.
The following is a discussion of the changes in the Company's major
expense categories:
Salaries, wages and fringe benefits increased from 55.5% of revenues in
the third quarter of 1997 to 56.5% of revenues for the third quarter of
1998, and from 53.4% of revenues for the first nine months of 1997 to
55.5% of revenues for the first nine months of 1998. The increase was
primarily due to annual salary and benefit increases together with
additional labor costs due to inefficiencies caused by the lower volumes
from the loss of General Motors business as a result of the work
stoppages offset by continued productivity and efficiency improvements.
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Operating supplies and expenses increased from 16.3% of revenues in the
third quarter of 1997 to 18.2% of revenues for the third quarter of 1998,
and from 15.8% of revenues for the first nine months of 1997 to 17.7% of
revenues for the first nine month of 1998. The increase was primarily the
result of the acquisition of Ryder's Automotive Carrier Group as its
operating costs as a percentage of revenues were higher than the Company's
together with inefficiencies caused by the lower volumes from the loss of
General Motors business as a result of to the work stoppages.
Purchased transportation expense increased from 8.2% of revenues in the
third quarter of 1997 to 9.6% of revenues for the third quarter of 1998.
Purchased transportation increased from 8.9% of revenues for the first
nine months of 1997 to 9.0% of revenues for the first nine months of 1998.
The increase during the third quarter was primarily due to the increase in
the mix of owner-operators to company drivers due to the lay-offs of a
greater percentage of company drivers resulting from the General Motors
work stoppages. However, for the first nine months of 1998 the percentage
of vehicles hauled by owner-operators was comparable to the 1997 level.
All costs for owner-operators are included in purchased transportation.
Insurance and claims expense increased from 3.2% of revenues in the third
quarter of 1997 to 4.1% of revenues for the third quarter of 1998 and
increased from 3.7% of revenues for the first nine months of 1997 to 3.8%
of revenues for the first nine months of 1998. The increase during the
third quarter was primarily due to the Company's insurance premiums
remaining constant while revenues were reduced as a result of to the
General Motors work stoppages. However for the first nine months of 1998,
insurance and claims expense was only slightly higher than 1997 including
the effect of the General Motors work stoppages, due to lower cargo claims
costs resulting from the continuation of quality programs instituted in
1997.
Depreciation and amortization expense decreased from 7.5% of revenues in
the third quarter of 1997 to 6.1% for the third quarter of 1998, and from
6.9% for the nine-months of 1997 to 5.2% of revenues for the first
nine-months of 1998. The decrease was primarily the result of depreciation
expense on the rigs acquired through the acquisition of Ryder's Automotive
Carrier Group representing a lower percentage of revenues than the
Company's due to the age and useful lives of the rigs.
Interest expense as a percentage of revenues decreased from 3.1% during
the third quarter of 1997 to 3.0% in the third quarter of 1998 and from
2.7% for the first nine months of 1997 to 2.5% for the first nine months
of 1998. However, interest expense increased from $2.8 million in the
third quarter of 1997 to $ 6.6 million in the third quarter of 1998 and
from $8.2 million during the first nine months of 1997 to $18.9 million
for the first nine months of 1998 primarily due to interest on additional
borrowings used to finance the Ryder Automotive Carrier Group acquisition.
Interest income increased from $0.2 million in the third quarter of 1997
to $1.2 million in the third quarter of 1998 and from $0.6 million for the
first nine months of 1997 to $2.2 million for the first nine months of
1998. The increase is due to an increase in earnings from the Company's
captive insurance subsidiary due to increases in the amount of investments
held by the captive insurance company.
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The effective tax rate increased from approximately 42% of pre-tax income
in 1997 to approximately 43.5% in 1998. The increase was due to higher
non-deductible expenses resulting from the Ryder Automotive Carrier Group
acquisition.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $14.8 million for the
nine months ended September 30, 1998 versus $16.0 million for the nine
months ended September 30, 1997. The decrease in cash provided by
operating activities was primarily due to the impact of the General Motors
work stoppages.
Net cash used in investing activities totaled $53.9 million for the nine
months ended September 30, 1998 versus $140.8 million for the same period
in 1997. The decrease was primarily due to the purchase of the Ryder
Automotive Carrier Group in September 1997 for $114.5 million offset by an
increase in capital expenditures, from $10.6 million for the first nine
months of 1997 to $37.0 million for the first nine months of 1998. This
increase was due to the increase in the number of new tractors and
trailers purchased by the Company together with and increase in
modifications to existing tractors and trailers because of the increase in
the fleet size as a result of the Ryder Automotive Carrier Group
acquisition. In addition, the Company invested $11.9 million to form Axis
do Brasil in February 1998.
Net cash provided by financing activities totaled $47.2 million for the
nine months ended September 30, 1998 versus $131.2 million for the nine
months ended September 30, 1997. The decrease was primarily due to the
financing of the Ryder Automotive Carrier Group acquisition in 1997 which
was offset with additional borrowings in 1998 due to the losses associated
with the General Motors work stoppages and the investment in Brazil.
YEAR 2000
Year 2000 issues are being addressed by the Company. The Company, like
most other major companies, is currently addressing a universal problem
commonly referred to as "Year 2000 Compliance," which relates to the
ability of computer programs and systems to properly recognize and process
date sensitive information before and after January 1, 2000. The following
discussion is based on information currently available to the Company.
The Company has analyzed and continues to analyze its internal
information technology ("IT") systems ("IT systems") to identify any
computer programs that are not Year 2000 compliant and implement any
changes required to make such systems Year 2000 compliant. The Company
believes that its critical IT systems currently are capable of
functioning without substantial Year 2000 Compliance problems. Of the
non-critical, but important, IT systems that are not currently Year 2000
Compliant, the Company believes such IT systems will be Year 2000 capable
in a time frame that will avoid any material
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adverse effect on the Company. Also, the Company does not believe that the
expenditures related to replacing or upgrading any of its IT systems to
make them Year 2000 compliant will have a material adverse effect on the
financial condition or results of operations of the Company. The Company
has evaluated its critical equipment and critical systems that contain
embedded software, ("Non-IT systems"), and the Company believes that all
of its critical Non-IT systems are capable of functioning without
substantial Year 2000 Compliance problems.
The Company has engaged a leading computer consulting services firm to
lead the Year 2000 remediation and testing process. The Company is also
investigating each of its significant vendors, suppliers, financial
service organizations, service providers and customers to confirm that
the Company's operations will not be materially adversely affected by the
failure of any such third party to have Year 2000 compliant computer
programs. Regardless of the responses that the Company receives from such
third parties, the Company is establishing contingency plans to reduce
the Company's exposure resulting from the non-compliance of third
parties.
The Company estimates that, through September 30, 1998, it has spent $0.5
million to analyze, remediate and test Year 2000 issues in its IT
systems, and the Company estimates that it will spend an additional $3.0
million on Year 2000 issues in its IT systems. All of such expenditures
are included in the budgets of the various departments of the Company
involved with the Year 2000 project.
The Company has approached the Year 2000 project in phases. Phase I of
the project involved identification of all software used by the Company,
identification of all significant vendors, and establishment of a senior
management committee to oversee the project. Phase I was completed in the
third calendar quarter of 1998. Phase II of the project involves (a)
evaluation of each significant vendor and evaluation of major customers
through letters and questionnaires (b) communication with customers
concerning any products currently or recently sold by the Company that
have Year 2000 issues, and (c) evaluating the Company's most reasonably
likely worst case Year 2000 scenarios and contingency planning related
thereto. Phase II is in process and many of the tasks described in
subparagraphs (b) and (c) above have been completed; Phase II is expected
to be completed in the fourth calendar quarter of 1998. Phase III
involves testing of the Company's IT systems and Non-IT systems to
confirm Year 2000 compliance and/or discover any overlooked Year 2000
problems. Phase III has commenced and should be completed in the third
calendar quarter of 1999. Last, Phase IV involves implementation of the
Company's contingency plans. Such plans are expected to be implemented in
the third calendar quarter of 1999.
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The Company does not currently believe that any of the foregoing will have
a material adverse effect on its financial condition or its results of
operations. However, the process of evaluating the Company's third party
vendors and their systems is ongoing. Although not expected, failures of
critical suppliers, critical customers, critical IT systems or critical
Non-IT systems could have a material adverse effect on the Company's
financial condition or results of operations. As widely publicized, Year
2000 Compliance has many issues and aspects, not all of which the Company
is able to accurately forecast or predict. There is no way to assure that
Year 2000 Compliance will not have adverse effects on the Company, some of
which could be material.
Many of the Company's statements related to Year 2000 are forward-looking
statements and actual results could differ materially from those
anticipated above. The Company is relying on the investigations and
statements of many employees, consultants and third parties in making the
above forward-looking statements and such investigations or statements may
not be accurate.
SEASONALITY AND INFLATION
The Company's revenues are seasonal, 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. Inflation has not
significantly affected the Company's results of operations.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this quarterly report on Form 10-Q that are not strictly
historical are "forward-looking" statements. Investors are cautioned
that such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially. Without limitation,
these risks and uncertainties include economic recessions or downturns
in new vehicle production or sales, labor disputes involving the Company
or its significant customers, problems related to computations that must
be made by the Company or its vendors or customers in 1999, 2000, or
beyond, risks associated with conducting business in foreign countries
and the ability to integrate the acquisition of Ryder's Automotive
Carrier Group. Investors are urged to carefully review and consider the
various disclosures made by the Company in this quarterly report and in
the Company's other reports filed with the Securities and Exchange
Commission.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: None.
(b) Reports on Form 8-K: There were no reports filed on Form 8-K for the
quarter ended September 30, 1998.
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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 11, 1998 /s/ A. Mitchell Poole, Jr.
- ----------------- ---------------------------
(Date) A. Mitchell Poole, Jr.
on behalf of Registrant as
President, Chief Operating
Officer, And Assistant Secretary
November 11, 1998 /s/ Daniel H. Popky
- ----------------- ----------------------------
(Date) Daniel H. Popky
on behalf of Registrant as
Senior Vice President, Finance
and Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ALLIED HOLDINGS, INC. AND SUBSIDIARIES FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 18,549
<SECURITIES> 23,931
<RECEIVABLES> 78,841
<ALLOWANCES> 0
<INVENTORY> 6,779
<CURRENT-ASSETS> 167,769
<PP&E> 286,489
<DEPRECIATION> 0
<TOTAL-ASSETS> 584,209
<CURRENT-LIABILITIES> 135,241
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 57,612
<TOTAL-LIABILITY-AND-EQUITY> 584,209
<SALES> 751,499
<TOTAL-REVENUES> 751,499
<CGS> 728,806
<TOTAL-COSTS> 728,806
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,846
<INCOME-PRETAX> 6,065
<INCOME-TAX> 2,638
<INCOME-CONTINUING> 3,427
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,427
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.44
</TABLE>
