-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FmifVBohvAMOqkFl6dUl+tm0432Ja9jSEJ6dFVt8POCyRUws14hqXHHKGjxUUrFS 0SVwq8oiX5HIuLpAMaHjQA== 0000950144-98-006170.txt : 19980515 0000950144-98-006170.hdr.sgml : 19980515 ACCESSION NUMBER: 0000950144-98-006170 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED HOLDINGS INC CENTRAL INDEX KEY: 0000909950 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 580360550 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13867 FILM NUMBER: 98620508 BUSINESS ADDRESS: STREET 1: 160 CLAIRMONT AVE STREET 2: STE 510 CITY: DECATUR STATE: GA ZIP: 30030 BUSINESS PHONE: 4043701100 MAIL ADDRESS: STREET 1: 160 CLAIREMONT AVENUE SUITE 510 CITY: DECATUR STATE: GA ZIP: 30030 10-Q 1 ALLIED HOLDINGS 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 ACT OF 1934 - FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 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 incorporation or organization) Identification Number) SUITE 200, 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 May 1, 1998................. 7,877,547
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 11 1 2 INDEX PART I FINANCIAL INFORMATION
PAGE ITEM 1: FINANCIAL STATEMENTS - ------- -------------------- Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997.................................................... 3 Consolidated Statements of Operations for the Three Month Periods Ended March 31, 1998 and 1997........................... 4 Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 1998 and 1997........................... 5 Notes to Consolidated Financial Statements............................. 6 ITEM 2 - ------ Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 8 PART II OTHER INFORMATION ITEM 6 - ------ Exhibits and Reports on Form 8-K....................................... 10 Signature Page......................................................... 11
2 3 PART 1 - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS ALLIED HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH 31 DECEMBER 31 1998 1997 ----------- ----------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,452 $ 10,530 Short-term investments 22,255 19,540 Receivables, net of allowance for doubtful accounts 86,986 74,881 Inventories 5,977 5,391 Deferred tax assets 17,837 17,812 Prepayments and other current assets 23,493 21,519 --------- --------- Total current assets 161,000 149,673 --------- --------- PROPERTY AND EQUIPMENT, NET 280,763 286,214 --------- --------- OTHER ASSETS: Goodwill, net 98,911 99,310 Notes receivable due from related parties 0 573 Other 35,990 23,169 --------- --------- Total other assets 134,901 123,052 --------- --------- Total assets $ 576,664 $ 558,939 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 2,986 $ 2,980 Trade accounts payable 33,882 36,263 Accrued liabilities 120,579 118,436 --------- --------- Total current liabilities 157,447 157,679 --------- --------- LONG-TERM DEBT, LESS CURRENT MATURITIES 246,272 228,003 --------- --------- POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 11,321 11,355 --------- --------- DEFERRED INCOME TAXES 35,348 35,062 --------- --------- OTHER LONG-TERM LIABILITIES 67,824 69,512 --------- --------- STOCKHOLDERS' EQUITY: Common stock, no par value; 20,000 shares authorized, 7,878 and 7,819 shares outstanding at March 31, 1998 and December 31,1997, respectively 0 0 Additional paid-in capital 44,806 43,758 Retained earnings 17,569 16,877 Foreign currency translation adjustment, net of tax (2,439) (2,826) Unearned compensation (1,484) (481) --------- --------- Total stockholders' equity 58,452 57,328 --------- --------- Total liabilities and stockholders' equity $ 576,664 $ 558,939 ========= =========
The accompanying notes are an integral part of these consolidated balance sheets. 3 4 ALLIED HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31 -------------------------- 1998 1997 ---- ---- REVENUES $ 253,390 $ 96,393 --------- --------- OPERATING EXPENSES: Salaries, wages and fringe benefits 143,976 51,942 Operating supplies and expenses 44,626 15,256 Purchased transportation 20,814 8,950 Insurance and claims 9,133 3,809 Operating taxes and licenses 8,663 3,858 Depreciation and amortization 12,925 6,847 Rents 3,029 1,231 Communications and utilities 1,913 770 Other operating expenses 1,524 924 --------- --------- Total operating expenses 246,603 93,587 --------- --------- Operating income 6,787 2,806 --------- --------- OTHER INCOME (EXPENSE): Interest expense (6,022) (2,616) Interest income 456 152 --------- --------- (5,566) (2,464) --------- --------- INCOME BEFORE INCOME TAXES 1,221 342 INCOME TAX PROVISION (531) (144) --------- --------- NET INCOME $ 690 $ 198 ========= ========= NET INCOME PER COMMON SHARE-BASIC AND DILUTED $ 0.09 $ 0.03 ========= ========= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 7,746 7,725 ========= =========
The accompanying notes are an integral part of these consolidated statements. 4 5 ALLIED HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31 -------------------------- 1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 690 $ 198 -------- -------- Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 12,925 6,847 Loss (gain) on sale of property and equipment 37 (4) Deferred income taxes 76 (505) Change in operating assets and liabilities: Receivables, net of allowance for doubtful accounts (11,973) (6,233) Inventories (574) 448 Prepayments and other current assets (1,949) (2,472) Trade accounts payable (2,431) (2,887) Accrued liabilities 360 3,811 -------- -------- Total adjustments (3,529) (995) -------- -------- Net cash used in operating activities (2,839) (797) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (6,396) (3,850) Proceeds from sale of property and equipment 115 8 Investment in joint venture (11,920) 0 Increase in short-term investments (2,715) (2,004) Increase in the cash surrender value of life insurance (620) (667) -------- -------- Net cash used in investing activities (21,536) (6,513) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 18,269 7,986 Other, net 94 117 -------- -------- Net cash provided by financing activities 18,363 8,103 -------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (66) (81) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (6,078) 712 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10,530 1,973 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,452 $ 2,685 ======== ========
The accompanying notes are an integral part of these consolidated statements. 5 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 month period ended March 31, 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 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. for approximately $114.5 million in cash, subject to post-closing adjustments. The subsidiaries of Ryder Automotive Carrier Inc. 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 the acquisition. 6 7 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 in a newly formed Brazilian firm, Axis Sinimbu Logistica ("ASL"). ASL will provide supply chain logistics services for the automotive industry in the Mercosur counties. Note 5. Comprehensive Income Comprehensive income was $1.1 million for the first quarter of 1998 versus a Loss of $0.1 million for the first quarter of 1997. The difference between comprehensive income and net income is the foreign currency translation adjustment, net of income taxes. Note 6. 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 quarters of 1997. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenues were $253.4 million for the first quarter of 1998 versus revenues of $96.4 million for the first quarter of 1997, an increase of 163%. Net income was $0.7 million in the first quarter of 1998 versus $0.2 million in the first quarter of 1997, or $0.09 per diluted share in 1998, versus $0.03 per diluted share in 1997, an increase of 248 %. The significant increase in the Company's revenues was primarily due to the acquisition of Ryder's Automotive Carrier Group which was completed on September 30, 1997. The operating results of Ryder's Automotive Carrier Group have been included with Allied's since the date of the acquisition. The combined companies had a 5 % increase in vehicles delivered for the first quarter of 1998 versus 1997 which led to the significant increase in net income. The increase in vehicle deliveries was primarily due to increases in new vehicle production together with an increase in off-rail deliveries due to rail-car shortages. Salaries, wages and fringe benefits increased from 53.9 % of revenues in the first quarter of 1997 to 56.8 % for the first quarter of 1998. The increase was primarily due to annual salary and benefit increases offset by continued productivity and efficiency improvements. In addition, there has been an increase in the number of vehicles delivered by company drivers versus owner-operators during the first quarter of 1998 versus 1997. This results in an increase in salaries, wages and fringe benefits and operating supplies and expenses and a decrease in purchased transportation. Owner-operators are responsible for all costs to operate their rigs and such costs are included in purchased transporation. Operating supplies and expenses increased from 15.8 % of revenues in the first quarter of 1997 to 17.6 % for the first quarter of 1998. The increase was primarily the result of the acquisition of Ryder Automotive Carrier Group as its operating costs as a percentage of revenues were higher than the Company's together with an increase in the vehicles delivered by Company drivers versus owner operators. Purchased transportation expense decreased from 9.3 % of revenues in the first quarter of 1997 to 8.2 % for the first quarter of 1998. The decrease was primarily due to the decrease in the mix of owner-operators to Company drivers and the ability to haul more vehicles with Company drivers thus reducing the number of vehicles delivered by other carriers for the Company. All costs for owner-operators are included in purchased transportation. Insurance and claims expense decreased from 4.0 % of revenues in the first quarter of 1997 to 3.6 % for the first quarter of 1998. The decrease was primarily due to lower cargo claims costs resulting from the continuation of quality programs instituted in 1997. Depreciation and amortization expense decreased from 7.1 % of revenues in the first quarter of 1997 to 5.1 % for the first quarter of 1998. The decrease was primarily the result of depreciation expense on the rigs acquired through the acquisition of Ryder Automotive Carrier Group representing a lower percentage of revenues than the Company's due to the age and useful lives of the rigs. 8 9 FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Net cash used by operating activities totaled $0.8 million in the first quarter of 1997 versus $2.8 million for the first quarter of 1998. The increase in cash used by operating activities was primarily due to seasonal working capital increases due to the seasonality of the Company's revenues. Net cash used in investing activities totaled $6.5 million in the first quarter of 1997 versus $21.5 million for the first quarter of 1998. The increase was primarily due to the investment of $11.9 million in Axis do Brasil in February 1998. Capital expenditures increased from $3.9 million in the first quarter of 1997 to $6.4 million for the first quarter of 1998. The increase in capital expenditures was due to the increase in the number of new tractors and trailers purchased by the Company together with an increase in modifications to existing tractors and trailers due to an increase in the fleet size as a result of the Ryder Automotive Carrier Group acquisition. Net cash provided by financing activities totaled $8.1 million versus $18.4 million for the first quarter of 1997 versus 1998. The increase was primarily due to borrowings to finance the Company's investment in Axis do Brasil. 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. Inflation has not significantly affected the Company's results of operations. 9 10 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: 27 Financial Data Schedule (for SEC use only) (b) Reports on Form 8-K: There were no reports filed on Form 8-K for the quarter ended March 31, 1998. 10 11 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. March 13, 1998 /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 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF ALLIED HOLDINGS, INC. FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1 4,452 22,255 86,986 0 5,977 161,000 280,763 0 576,664 157,447 0 0 0 0 58,452 576,664 253,390 253,390 246,603 246,603 0 0 6,022 1,221 531 690 0 0 0 690 .09 .09
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