Allied Holdings Inc., the parent company for car carrier Allied Automotive Group, said its clients have largely agreed to pay an extra “administrative processing fee” for transportation services – helping the struggling firm boost its sagging revenues.
Decatur, GA-based Allied said some 85% of its clients have agreed to pay the fee, which is expected to generate an additional $40-$50 million in annual revenues with an equivalent contribution to earnings. Allied added the fee August 6 for vehicles transported on behalf of its clients in the U.S. and Canada, resulting in an approximately 8.5% price increase, it said.
The fee comes at a time of heavy financial losses for Allied. The company recently reported that its second-quarter revenues declined 15%, resulting in a loss of $5.7 million. Through the first six months of 2001, Allied has posted losses of $24.6 million, compared to net income of $5.9 million for the same period in 2000.
Allied also narrowly avoided being de-listed from the New York Stock Exchange (NYSE), despite falling below the exchange’s listing standards of $50 million in total market capitalization. Allied worked out a deal where it would remain listed on the NYSE, subject to quarterly monitoring, as long as it gets over the $50-million mark by November 29, 2002.
“Our increased rate structure is an important and positive step in the ongoing renewal of Allied Holdings,” said Hugh E. Sawyer, Allied’s president & CEO. “We will continue to aggressively execute the remaining elements of our turnaround plan in order to establish a more stable operating platform in 2002.”