10-Q 1 e10-q.txt ALLIED HOLDINGS, INC. 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 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. -------------------------------------------------------------------------------- (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 July 31, 2000.....................8,249,889
TOTAL NUMBER OF PAGES INCLUDED IN THIS REPORT: 17 1 2 INDEX PART I FINANCIAL INFORMATION
PAGE ---- 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
PART II OTHER INFORMATION 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
2 3 PART 1 - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS ALLIED HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands)
JUNE 30 DECEMBER 31 2000 1999 ----------- ---------- (UNAUDITED) ASSETS 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 ---------- ---------- OTHER ASSETS: Goodwill, net 97,210 93,104 Other 44,495 43,361 ---------- ---------- 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 ========== ==========
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 FOR THE SIX MONTHS ENDED JUNE 30 JUNE 30 --------------------------- --------------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- 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 ---------- ---------- ---------- ---------- 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 ---------- ---------- ---------- ---------- (5,861) (6,558) (12,041) (14,450) ---------- ---------- ---------- ---------- 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 ========== ========== ========== ==========
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 SIX MONTHS ENDED JUNE 30 ----------------------------- 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,854 $ 127 ----------- ----------- 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) ----------- ----------- Total adjustments 21,212 (5,655) ----------- ----------- Net cash provided by (used in) operating activities 27,066 (5,528) ----------- ----------- 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) ----------- ----------- 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 ----------- ----------- Net cash (used in) provided by financing activities (6,791) 35,351 ----------- ----------- 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 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,308 $ 24,824 =========== ===========
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 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. 6 7 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):
For the three months ended For the six months ended June 30 June 30 -------------------------- -------------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Revenues: United States $ 242,240 $ 237,431 $ 477,178 $ 455,345 Canada 53,657 49,553 101,603 92,888 ---------- ---------- ---------- ---------- $ 295,897 $ 286,984 $ 578,781 $ 548,233 ========== ========== ========== ==========
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. 7 8 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- 8 9 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. 9 10 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. 10 11 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. 11 12 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 12 13 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. 13 14 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)
------------------------------------------------------------------------------------------------------ FOR AGAINST TERM ------------------------------------------------------------------------------------------------------ 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 ------------------------------------------------------------------------------------------------------
The following Directors' terms will continue as indicated. 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
PROPOSAL II (AMEND THE COMPANY'S LONG-TERM INCENTIVE PLAN TO INCREASE NUMBER BY 850,000)
-------------------------------------------------------------- FOR AGAINST ABSTAIN -------------------------------------------------------------- 4,502,570 869,063 30,014 --------------------------------------------------------------
PROPOSAL III (TO APPOINT ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS)
-------------------------------------------------------------- FOR AGAINST ABSTAIN -------------------------------------------------------------- 6,720,985 23,624 28,745 --------------------------------------------------------------
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 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