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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 JUNE 30, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 - For the transition period from
_______________________ to _____________________
Commission File Number: 0-22276
ALLIED HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
GEORGIA 58-0360550
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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
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Outstanding common stock, No par value at July 31, 2000.....................8,249,889
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TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 17
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INDEX
PART I
FINANCIAL INFORMATION
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PAGE
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ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 2000 and
December 31, 1999....................................................................................... 3
Consolidated Statements of Operations for the Three and Six
Month Periods Ended June 30, 2000 and 1999.............................................................. 4
Consolidated Statements of Cash Flows for the Six
Month Periods Ended June 30, 2000 and 1999.............................................................. 5
Notes to Consolidated Financial Statements................................................................. 6
ITEM 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................................................... 8
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PART II
OTHER INFORMATION
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ITEM 4
Submission of Matters to a Vote of Security Holders.........................................................13
ITEM 6
Exhibits and Reports on Form 8-K............................................................................14
Signature Page..............................................................................................15
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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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JUNE 30 DECEMBER 31
2000 1999
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(UNAUDITED)
ASSETS
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CURRENT ASSETS:
Cash and cash equivalents $ 4,308 $ 13,984
Short-term investments 56,243 44,325
Receivables, net of allowance for doubtful accounts 126,972 121,058
Inventories 7,880 7,949
Deferred tax assets 12,801 16,119
Prepayments and other current assets 25,218 22,182
---------- ----------
Total current assets 233,422 225,617
---------- ----------
PROPERTY AND EQUIPMENT, NET 267,174 287,838
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OTHER ASSETS:
Goodwill, net 97,210 93,104
Other 44,495 43,361
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Total other assets 141,705 136,465
---------- ----------
Total assets $ 642,301 $ 649,920
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 162 $ 185
Trade accounts payable 38,465 42,931
Accrued liabilities 93,539 85,655
---------- ----------
Total current liabilities 132,166 128,771
---------- ----------
LONG-TERM DEBT, LESS CURRENT MATURITIES 323,029 330,101
---------- ----------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 10,882 11,973
---------- ----------
DEFERRED INCOME TAXES 33,516 37,409
---------- ----------
OTHER LONG-TERM LIABILITIES 71,263 74,752
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, no par value; 20,000 shares authorized, 8,210
and 7,997 shares outstanding at June 30,
2000 and December 31,1999, respectively 0 0
Additional paid-in capital 45,267 44,437
Retained earnings 32,757 26,903
Cumulative other comprehensive income, net of tax (6,111) (4,240)
Common stock in treasury, at cost, 62 and 29 shares at June 30,
2000 and December 31,1999, respectively (468) (186)
---------- ----------
Total stockholders' equity 71,445 66,914
---------- ----------
Total liabilities and stockholders' equity $ 642,301 $ 649,920
========== ==========
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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)
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FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30 JUNE 30
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2000 1999 2000 1999
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REVENUES $ 295,897 $ 286,984 $ 578,781 $ 548,233
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Salaries, wages and fringe benefits 154,275 150,128 309,113 294,773
Operating supplies and expenses 48,302 49,701 99,884 94,482
Purchased transportation 29,301 28,692 56,454 54,529
Insurance and claims 13,087 12,260 25,143 25,877
Operating taxes and licenses 10,982 11,096 21,841 21,812
Depreciation and amortization 15,393 14,362 30,635 28,377
Rents 2,173 2,301 4,499 4,368
Communications and utilities 2,006 2,197 4,215 4,427
Other operating expenses 3,091 2,770 5,749 4,926
---------- ---------- ---------- ----------
Total operating expenses 278,610 273,507 557,533 533,571
---------- ---------- ---------- ----------
Operating income 17,287 13,477 21,248 14,662
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OTHER INCOME (EXPENSE):
Equity in earnings of joint ventures, net of tax 1,798 871 2,699 97
Interest expense (8,348) (7,758) (16,749) (15,167)
Interest income 689 329 2,009 620
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(5,861) (6,558) (12,041) (14,450)
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INCOME BEFORE INCOME TAXES 11,426 6,919 9,207 212
INCOME TAX PROVISION (4,537) (2,787) (3,353) (85)
---------- ---------- ---------- ----------
NET INCOME $ 6,889 $ 4,132 $ 5,854 $ 127
========== ========== ========== ==========
PER COMMON SHARE - BASIC AND DILUTED $ 0.87 $ 0.53 $ 0.74 $ 0.02
========== ========== ========== ==========
COMMON SHARES OUTSTANDING:
BASIC 7,916 7,792 7,901 7,791
========== ========== ========== ==========
DILUTED 7,916 7,800 7,908 7,807
========== ========== ========== ==========
</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)
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FOR THE SIX MONTHS ENDED
JUNE 30
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2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,854 $ 127
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Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization 30,635 28,377
Loss (gain) on sale of property and equipment 13 (24)
Deferred income taxes 838 (685)
Compensation expense related to stock options and grants 408 292
Equity in earnings of joint ventures (2,699) (97)
Amortization of Teamsters Union signing bonus 1,238 0
Change in operating assets and liabilities:
Receivables, net of allowance for doubtful accounts (4,289) (10,067)
Inventories 42 (1,406)
Prepayments and other current assets (3,117) (3,581)
Trade accounts payable (5,488) (9,980)
Accrued liabilities 3,631 (8,484)
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Total adjustments 21,212 (5,655)
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Net cash provided by (used in) operating activities 27,066 (5,528)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (9,079) (26,482)
Proceeds from sale of property and equipment 112 827
Purchase of business, net of cash acquired (8,185) (1,879)
Investment in joint venture 0 (80)
(Increase) decrease in short-term investments (11,918) 388
(Increase) decrease in the cash surrender value of life insurance (240) 73
----------- -----------
Net cash used in investing activities (29,310) (27,153)
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CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) proceeds from issuance of long-term debt, net (7,095) 34,383
Proceeds from issuance of common stock 422 0
Repurchase of common stock (282) 0
Proceeds from exercise of stock options 0 27
Other, net 164 941
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Net cash (used in) provided by financing activities (6,791) 35,351
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EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (641) 177
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (9,676) 2,847
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 13,984 21,977
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,308 $ 24,824
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</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 six
month periods ended June 30, 2000 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2000. 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 1999 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. Comprehensive Income
The Company had comprehensive income of $5.5 million for the second
quarter of 2000 versus $5.3 million for the second quarter of 1999. For
the first six months of 2000, comprehensive income was $4.0 million,
versus $2.0 million for the first six months of 1999. The difference
between comprehensive income and net income is the foreign currency
translation adjustment, net of income taxes.
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Note 4. 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.
During 1999, SFAS No. 137 was issued which defers the effective date of
SFAS No. 133 until fiscal quarters of all fiscal years beginning after
June 15, 2000. The Company will adopt this statement in the first
quarter of 2001. The Company has not yet quantified the impact of
adopting SFAS No. 133 on the consolidated financial statements. This
statement could increase volatility in earnings and other comprehensive
income.
Note 5. Segment Reporting
The Company operates in one reportable industry segment: transporting
automobiles and light trucks from manufacturing plants, ports,
auctions, and railway distribution points to automotive dealerships.
Geographic financial information is as follows (in thousands):
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For the three months ended For the six months ended
June 30 June 30
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2000 1999 2000 1999
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Revenues:
United States $ 242,240 $ 237,431 $ 477,178 $ 455,345
Canada 53,657 49,553 101,603 92,888
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$ 295,897 $ 286,984 $ 578,781 $ 548,233
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Revenues are attributed to the respective countries based on the
location of the origination terminal.
Note 6. Stock Repurchase Plan
The Company's Board of Directors has authorized management to take the
necessary steps to repurchase up to 500,000 shares of the Company's
outstanding common stock through fiscal year 2000 in open market
transactions. The timing of these purchases and the number of shares
purchased will be dictated by market conditions and other relevant
factors. Through June 30, 2000, the Company has repurchased 61,652
shares.
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Note 7. Litigation
The Company is routinely a party to litigation incidental to its
business, primarily involving claims for personal injury and property
damage incurred in the transportation of vehicles. The Company does not
believe that any of such pending litigation if adversely determined
would have a material adverse effect on the Company.
The Company is a defendant in a lawsuit (Gateway Development &
Manufacturing, Inc. v. Commercial Carriers, Inc., et al, Index No.
1997/8920), pending in Supreme Court of Erie County, New York claiming
that Company tortiously interfered with a business transaction
involving the plaintiff and a defendant in the action other than the
Company. The Company has moved for summary judgment dismissing all
claims against the Company. If the Company is unsuccessful with its
motion for summary judgment, it intends to vigorously defend this case,
as it believes the claims against the Company are without merit. While
the ultimate results of this litigation cannot be determined,
management does not expect that the resolution of this proceeding will
have a material adverse effect on the Company's consolidated financial
position or results of operations.
In June 2000, Commercial Carriers, Inc. (CCI), which is a subsidiary of
Allied Automotive Group, Inc., a subsidiary of Allied Holdings, Inc.,
filed suit against National Union Fire Insurance Company of Pittsburgh,
PA (National Union). National Union is to provide insurance coverage of
approximately $20 million regarding a $35 million judgment against CCI
and had fully reserved its rights of insurance coverage. CCI filed a
lawsuit seeking a declaratory judgment that National Union had no
basis for reserving its rights.
In July 2000, National Union unconditionally withdrew its previously
issued reservation of its rights and acknowledged coverage, and CCI
dismissed, without prejudice, the lawsuit it previously filed against
National Union. As a result, CCI has insurance coverage for the entire
amount of the judgment.
Note 8. Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform with the current year presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenues were $295.9 million for the second quarter of 2000 versus
revenues of $287.0 million for the second quarter of 1999, an increase
of 3.1%. For the six-month period ended June 30, 2000, revenues were
$578.8 million, versus revenues of $548.2 million for the six-
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month period ended June 30, 1999, an increase of 5.6%. The increase in
revenues is attributed primarily to higher revenue generated per
vehicle delivered, due to revenue enhancements and other factors,
including the elimination of some non-profitable business.
Net income was $6.9 million during the second quarter of 2000 versus
$4.1 million during the second quarter of 1999, an increase of 68.3%.
Basic and diluted earnings per share in the second quarter of 2000 were
$0.87, versus basic and diluted earnings per share of $0.53 in the
second quarter of 1999. For the six-month period ended June 30, 2000,
net income was $5.9 million, versus $0.1 million for the six-month
ended June 30, 1999. Basic and diluted earnings per share for the
six-month period ended June 30, 2000 were $0.74 versus basic and
diluted earnings per share of $0.02 for the six-month period ended June
30, 1999.
Earnings improved for the second quarter of 2000 versus the second
quarter of 1999 due to continued cost control measures implemented in
the fourth quarter of 1999 and a reduction in cargo claims and
on-the-job injuries, combined with an increase in the revenue generated
per vehicle delivered. The rate structure was modified in the second
half of 1999 in response to the increase in light truck deliveries
which adversely impacted load averages and operating results. The
result was an increase in the revenue generated per vehicle delivered.
In the second quarter of 2000, increased fuel costs were offset by fuel
surcharges and fuel hedging gains. However, increased fuel costs, net
of surcharges secured from customers, is estimated to have reduced
earnings in the first quarter of 2000 by approximately $1.6 million, or
$0.20 per share.
The following is a discussion of the changes in the Company's major
expense categories:
Salaries, wages and fringe benefits decreased from 52.3 % of revenues
in the second quarter of 1999 to 52.1 % of revenues in the second
quarter of 2000, and from 53.8% of revenues for the first six months of
1999 to 53.4% of revenues for the first six months of 2000. The
decrease was due primarily to the benefit of revenue enhancements
combined with productivity and efficiency improvements, offset by
annual wage increases.
Operating supplies and expenses decreased from 17.3% of revenues in the
second quarter of 1999 to 16.3% of revenues in the second quarter of
2000, and increased from 17.2% for the first six months of 1999 to
17.3% for the first six months of 2000. The decrease from the second
quarter of 1999 to the second quarter of 2000 was due primarily to the
replacement of leased drivers with Company drivers at two operational
locations and a reduction in Year 2000 compliance expenses, which were
offset by an increase in fuel prices. The year-to-date increase in 2000
is primarily the result of higher fuel prices.
Insurance and claims expense increased from 4.3% of revenues in the
second quarter of 1999 to 4.4% of revenues in the second quarter of
2000, and decreased from 4.7% of revenue for the first six months of
1999 to 4.3% of revenues for the first six months of 2000. The decrease
for the first six months of 2000 was a result of quality programs
initiated in the fourth quarter of 1999, which resulted in a reduction
in cargo claims. However, the slight increase in the second quarter was
due to higher liability claims costs.
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Equity in earnings of joint ventures increased from $0.9 million in the
second quarter of 1999 to $1.8 million in the second quarter of 2000,
and from $97,000 for the first six months of 1999 to $2.7 million for
the first six months of 2000. The increase was due to increased
earnings from the Company's joint ventures in the United Kingdom, which
began operations in May 1999, combined with a reduction in the loss
from the Company's Brazilian venture.
Interest expense, as a percentage of revenues, increased from 2.7 %
during the second quarter of 1999 to 2.8% in the second quarter of
2000, and increased from 2.8% for the first six months of 1999 to 2.9%
for the first six months of 2000. The increase was due to higher
interest rates in 2000 versus 1999 combined with higher long-term debt
levels.
Interest income, as a percentage of revenues, increased from 0.1%
during the second quarter of 1999 to 0.2% during the second quarter of
2000, and increased from 0.1% for the first six months of 1999 to 0.4%
for the first six months of 2000. The increase was due to higher
earnings on marketable securities held by the Company's captive
insurance company.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $27.1 million for the
six-month period ended June 30, 2000, versus $5.5 million used by
operating activities for the six-month period ended June 30, 1999. The
significant improvement in cash provided by operating activities was
due primarily to an increase in earnings during the first six months of
2000 versus 1999, combined with a favorable change in operating assets
and liabilities as the Company has implemented measures to improve
asset utilization.
Net cash used in investing activities totaled $29.3 million for the
six-month period ended June 30, 2000, versus $27.2 million for the
six-month period ended June 30, 1999. The increase was due primarily to
the purchase of CT Group, a logistics service group, in March 2000 for
$8.2 million. A decrease in capital expenditures was offset by an
increase in short-term investments. The investment portfolio mix of the
Company's captive insurance company changed during the first half of
2000 as short-term investments increased by $11.9 million. The change
was the result of the captive insurance company's investment managers
investing cash on hand. Capital expenditures were $9.1 million in the
first six months of 2000 versus $26.5 million in the first six months
of 1999. The reduced level of capital spending was the result of
efforts by the Company to limit capital expenditures in 2000 as fleet
utilization improved.
Net cash used by financing activities totaled $6.8 million for the
six-month period ended June 30, 2000, versus cash provided by financing
activities of $35.4 million for the six-month period ended June 30,
1999. The increase in cash used was due primarily to debt repayments of
approximately $7.1 million in the first half of 2000 versus borrowings
of approximately $34.4 million in the first half of 1999. Increased
cash flows from operations allowed the Company to reduce long-term debt
during the first half of 2000.
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DISCLOSURES ABOUT MARKET RISKS
The market risk inherent in the Company's market risk sensitive
instruments and positions is the potential loss arising from adverse
changes in short-term investment prices, interest rates, fuel prices,
and foreign currency exchange rates.
SHORT-TERM INVESTMENTS - The Company does not use derivative financial
instruments in its investment portfolio. The Company places its
investments in instruments that meet high credit quality standards, as
specified in the Company's investment policy guidelines. The policy
also limits the amount of credit exposure to any one issue, issuer, and
type of instrument. Short-term investments at June 30, 2000, which are
recorded at fair value of $56.2 million, have exposure to price risk.
This risk is estimated as the potential loss in fair value resulting
from a hypothetical 10% adverse change in quoted prices and amounts to
$5.6 million.
INTEREST RATES - The Company primarily issues long-term debt
obligations to support general corporate purposes including capital
expenditures and working capital needs. The majority of the Company's
long-term debt obligations bear a fixed rate of interest. A
one-percentage point increase in interest rates affecting the Company's
floating rate long-term debt would reduce pre-tax income by $1.3
million over the next fiscal year. A one-percentage point change in
interest rates would not have a material effect on the fair value of
the Company's fixed rate long-term debt.
FUEL PRICES - The Company is dependent on diesel fuel to operate its
fleet of rigs. Diesel fuel prices are subject to fluctuations due to
unpredictable factors such as weather, government policies, changes in
global demand, and global production. To reduce price risk caused by
market fluctuations, the Company generally follows a policy of hedging
a portion of its anticipated diesel fuel consumption. The instruments
used are principally readily marketable exchange traded futures
contracts that are designated as hedges. The changes in market value of
such contracts have a high correlation to the price changes of diesel
fuel. Gains and losses resulting from fuel hedging transactions are
recognized when the underlying fuel being hedged is used. A 10%
increase in diesel fuel prices would reduce pre-tax income by $5.4
million over the next fiscal year.
FOREIGN CURRENCY EXCHANGE RATES - Although the majority of the
Company's operations are in the United States, the Company does have
foreign subsidiaries (primarily Canada). The net investments in foreign
subsidiaries translated into dollars using exchange rates at June 30,
2000, are $79.4 million. The potential loss in fair value impacting
other comprehensive income resulting from a hypothetical 10% change in
quoted foreign currency exchange rates amounts to $7.9 million. The
Company does not use derivative financial instruments to hedge its
exposure to changes in foreign currency exchange rates.
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YEAR 2000
Year 2000 ("Y2K" or "Year 2000") issues were addressed by the Company.
The Company, like most other major companies, addressed 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 Company has analyzed internal information technology ("IT") systems
("IT systems") to identify any computer programs that are not Year 2000
compliant and implement changes required to make such systems Year 2000
compliant. The Company critical IT systems functioned without
substantial Year 2000 Compliance problems.
As of December 31, 1999, the Company's total incremental costs
(historical plus estimated future costs) of addressing Y2K issues were
estimated to be $5.0 million, of which approximately $4.1 million was
incurred in 1999 and $900,000 was incurred in 1998. The Company
estimates that approximately 30% of the costs incurred in 1999 were
internal costs, including compensation and benefits of employees
assigned primarily to Y2K procedures. Internal costs addressing Y2K
issues during 1998 were not material. These costs were funded through
operating cash flow. The Company did not incur material Y2K related
costs in the first six months of 2000.
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 contains
forward-looking statements, including statements regarding, among other
items, (i) the Company's plans, intentions or expectations, (ii)
general industry trends, competitive conditions and customer
preferences, (iii) the Company's management information systems, and
its ability to resolve any Year 2000 issues related thereto (iv) the
Company's efforts to reduce costs, (v) the adequacy of the Company's
sources of cash to finance its current and future operations and (vi)
resolution of litigation without material adverse effect on the
Company. This notice is intended to take advantage of the "safe harbor"
provided by the Private Securities Litigation Reform Act of 1995 with
respect to such forward-looking statements. These forward-looking
statements involve a number of risks and
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uncertainties. Among others, factors that could cause actual results to
differ materially are the following: economic recessions or downturns
in new vehicle production or sales; the highly competitive nature of
the automotive distribution industry; dependence on the automotive
industry; loss or reduction of revenues generated by the Company's
major customers; the variability of quarterly results and seasonality
of the automotive distribution industry; labor disputes involving the
Company or its significant customers; the dependence on key personnel
who have been hired or retained by the Company; the availability of
strategic acquisitions or joint venture partners; changes in regulatory
requirements which are applicable to the Company's business; changes in
vehicle sizes and weights which may adversely impact vehicle deliveries
per load; the ability to increase the rates charged to customers; risks
associated with doing business in foreign countries; problems related
to information technology systems and computations that must be made by
the Company or its customers and vendors in 1999, 2000 or beyond; and
the risk factors listed herein from time to time in the Company's
Securities and Exchange Commission reports, including but not limited
to, its Annual Reports on Form 10-K or 10 Q.
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PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 17, 2000 the Annual Meeting of Shareholders was held. The
following Directors were elected for terms that 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.
PROPOSAL I (ELECTION OF DIRECTORS)
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------------------------------------------------------------------------------------------------------
FOR AGAINST TERM
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------
David G. Bannister 6,202,711 570,643 2003
------------------------------------------------------------------------------------------------------
A. Mitchell Poole, Jr. 6,201,583 571,711 2003
------------------------------------------------------------------------------------------------------
Robert J. Rutland 6,202,761 570,593 2003
------------------------------------------------------------------------------------------------------
William P. Benton 6,202,761 570,593 2003
------------------------------------------------------------------------------------------------------
</TABLE>
The following Directors' terms will continue as indicated.
<TABLE>
<S> <C>
Bernard O. De Wulf 2002
Guy W. Rutland, III 2002
Robert R. Woodson 2002
Joseph W. Collier 2001
Guy W. Rutland, IV 2001
Randall E. West 2001
Berner F. Wilson 2001
</TABLE>
PROPOSAL II (AMEND THE COMPANY'S LONG-TERM INCENTIVE PLAN TO INCREASE NUMBER BY
850,000)
<TABLE>
<CAPTION>
--------------------------------------------------------------
FOR AGAINST ABSTAIN
<S> <C> <C>
--------------------------------------------------------------
4,502,570 869,063 30,014
--------------------------------------------------------------
</TABLE>
PROPOSAL III (TO APPOINT ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS)
<TABLE>
<CAPTION>
--------------------------------------------------------------
FOR AGAINST ABSTAIN
<S> <C> <C>
--------------------------------------------------------------
6,720,985 23,624 28,745
--------------------------------------------------------------
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit: 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K: The Company filed a report on Form 8-K
with the Securities and Exchange Commission on June 14, 2000
regarding pending legal matters.
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.
August 14, 2000 /s/ A. Mitchell Poole, Jr.
--------------- --------------------------------
(Date) A. Mitchell Poole, Jr.
on behalf of Registrant as
Vice Chairman and
Chief Executive Officer
August 14, 2000 /s/ Daniel H. Popky
--------------- --------------------------------
(Date) Daniel H. Popky
on behalf of Registrant as
Senior Vice President, Finance
and Chief Financial Officer
15
