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David A. Rawden
Executive Vice President & CFO
ALLIED HOLDINGS REPORTS THIRD QUARTER RESULTS
Decatur, Georgia, January 10, 2005 Allied Holdings, Inc. 2004 (AMEX:AHI) reported results for the third quarter ended September 30, 2004. The Company reported a net loss for the third quarter of 2004 of $7.6 million compared to a net loss in the third quarter last year of $2.0 million. Basic and diluted net loss per share in the third quarter of 2004 was $0.87, versus a basic and diluted net loss per share of $0.23 in the third quarter last year.
Revenues for the third quarter of 2004 were $207.6 million compared to revenues of $197.1 million in the third quarter last year, an increase of $10.5 million or 5.3 percent. Earnings before interest, taxes, depreciation and amortization, and gains and losses on disposal of assets (Adjusted EBITDA) for the third quarter of 2004 were $9.0 million compared to $14.3 million of Adjusted EBITDA reported during the third quarter last year, a decline of $5.3 million. Adjusted EBITDA is presented because management believes it provides useful information to investors regarding the Companys ability to generate cash flows that can be used to service debt and provide for capital expenditures. Reconciliations of Adjusted EBITDA to net loss and to operating cash flows are provided in the financial schedules attached to this press release.
The decline in Adjusted EBITDA in the third quarter of 2004 versus the third quarter of 2003 was primarily a result of significantly higher fuel costs net of fuel surcharge recoveries, higher benefits costs related to employees covered by the Companys collective bargaining agreement with the Teamsters, increased risk management costs, higher repair and maintenance costs and reduced operating income at Allieds Axis subsidiary. Increased costs during the third quarter of 2004 were partially mitigated by higher revenues, higher revenue per unit, and reduced overhead costs at the Companys corporate service center and its terminals.
The increase in revenues in the third quarter this year compared to last year was primarily the result of a 2.3 percent increase in vehicle deliveries and a $3.45 increase in revenue per unit. Revenue per unit increased primarily due to longer length of haul, an increase in fuel surcharges that are recorded as a component of revenue, as well as the strengthening of the Canadian dollar relative to the US dollar which affected the Companys Canadian operating subsidiary.
Allieds net loss was greater in the third quarter of 2004 versus the prior year primarily due to lower Adjusted EBITDA for the reasons discussed above, higher interest expense of $1.4 million and income taxes in foreign countries of $0.3 million versus a benefit of $0.7 million in the prior year. Allieds interest expense was higher in the third quarter of 2004 versus the prior year due to higher interest rates, accrued interest on a settlement with the Canadian taxing authorities and interest expense related to increased premium financing of risk management liabilities. These costs were partially offset by increased investment income earned on collateral held by Allieds captive insurance company of $0.6 million in the third quarter versus a loss of $0.4 million in the prior year, and currency exchange gains of $1.7 million related to a strengthening Canadian dollar during the quarter associated with the Companys operations in Canada. Finally, net loss in the third quarter of 2004 was greater than the third quarter of 2003 due to the $2.0 million pretax gain recorded as a result of the settlement of litigation with Ryder Systems in the third quarter of 2003.
During the Companys review of the third quarter of 2004, certain adjustments were identified related to prior quarters of 2004 and prior years. The impact of adjusting these items was a $0.7 million
The following information was filed by Allied Systems Holdings Inc on Monday, January 10, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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