Gee whiz! A national moving company hauling a double load of junk bonds and still making a $1 million profit - in a recession?

• Author: Sword, Doug
• Position: Atlas Van Lines Inc.'s Chief Executive Officer Norman Gee - Commodities - Company Profile

Back in 1981, The Wall Street Journal asked Norman Gee about debt.

Gee (pronounced with a hard "g") was a vice president of Atlas Van Lines at the time. "They took one of my quotes and set it in very large type within the story," recalls Gee, now chairman and CEO.

"Right there in the Journal, in big print on the front page, it read, 'We're trying to do everything we can not to borrow money.' Hey, it seemed like a good idea at the time," Gee says now.

Today, like its namesake, Atlas Van Lines Inc. has been sentenced to bear a heavy burden: huge debt from two heavily leveraged buy-outs in 1986 and 1988. But unlike the Greek god, whom Zeus condemned to bear the weight of the heavens forever, the Indiana company can see an end to its extraordinary labors.

Atlas, the company, expects to report profits of nearly $1 million this year. This will be its second year in a row in the black after several years of having its operating profits erased by mammoth interest payments.

Despite dragging a heavy double leveraged buy-out ball-and-chain of debt, Atlas can boast of several accomplishments during the past three years in addition to turning red into black:

* It has moved from sixth to fifth on the list of the largest U.S. moving companies.

* Revenues grew from $242 million the year of the buy-out to $267 million in 1990.

* Domestic revenues are down only 1.1 percent in this recession.

* The company hasn't failed a single financial test on the very long list submitted by Heller Financial Inc., the commercial lending arm of Fuji Bank of Tokyo, which financed Atlas' junk bonds in 1988.

Actually, Atlas has paid down its debts more quickly than required under its lending agreements with Heller, according to Patricia Weitzman, assistant vice president with Heller in Chicago. "We spend less time talking about any problems we have with Atlas" than with other junk bond-financed clients, Weitzman says. "It's been pretty much smooth sailing with Atlas so far."

Atlas took on $95 million in debt in September 1988 when 27 agents bought the company from an investment group dominated by principals of Wesray Corp. Wesray, led by former U.S. Secretary of the Treasury William Simon and his partner, Raymond Chambers, in 1984 bought the company for $66.5 million, in typical high-leverage style. Atlas' board sought out the Wesray purchase, because Atlas was looking for a white knight to stave off a hostile takeover by Canadian investors and Edward Bland, a former president...