Kitty Hawk (AMEX:KHK)
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Kitty Hawk, Inc. (AMEX:KHK):
Quarterly revenues increase over 19% compared to 2005
Chargeable weight increases over 43% compared to 2005
Kitty Hawk, Inc. (AMEX:KHK), the parent company of Kitty Hawk
Cargo, Inc., Kitty Hawk Aircargo, Inc. and Kitty Hawk Ground, Inc.,
today reported first quarter 2006 revenue of $40.1 million, an
increase of $6.5 million or 19.2% compared to the first quarter of
2005. Kitty Hawk generated a net loss allocable to common stockholders
for the first quarter of 2006 of $8.7 million, or a loss of $0.17 per
diluted common share. For the first quarter of 2005, Kitty Hawk
reported a net loss of $2.1 million or a loss of $0.04 per diluted
share.
"As we expected, our net loss during the quarter exceeded the
fourth quarter of 2005 net loss due to seasonality of the business and
the continued investment in our scheduled airport-to-airport expedited
ground network," said Robert W. Zoller, President and CEO. "We are
committed to building the ground network as evidenced by our newly
created operating subsidiary, the hiring of Gary Jensen as the
subsidiary's new Vice President and COO and the recent announcement of
the acquisition of the operating assets of Air Container Transport.
During the first quarter we continued to gain new customers who are
using Kitty Hawk for both air and ground transportation services. For
the past four weeks, our ground network has carried a record amount of
weight each consecutive week. We feel confident we have all the pieces
in place to successfully integrate the ACT operations while continuing
to provide premier air and ground operations and believe we remain
positioned over the long term for growth in a high aircraft and diesel
fuel cost operating environment."
On May 10, 2006, Kitty Hawk entered into an Asset Purchase
Agreement with Air Container Transport, Inc., (ACT), the West Coast's
premier airport-to-airport expedited ground freight network. The
agreement allows Kitty Hawk to acquire substantially all of the
operating assets of ACT including: owned and leased trucks and
trailers, owner operator agreements, leased facilities, trademarks and
intellectual property and customer lists. ACT operates an
airport-to-airport expedited ground freight network primarily in
California, Oregon, Washington, British Columbia, Utah, Colorado,
Illinois and Texas. In 2005, ACT had unaudited revenues of $44.5
million and an unaudited net loss of $0.3 million. The acquisition is
expected to be accretive to Kitty Hawk's financial performance and has
been approved by the Board of Directors of both companies. In
addition, management expects to realize marketing and sales synergies
during the remainder of 2006.
Scheduled freight revenue for the first quarter of 2006 was $40.1
million, an increase of $7.2 million compared to the first quarter
2005. First quarter 2006 system chargeable weight (accounting for
associated oversize and special handling requirements) increased 43.7%
during the period and average yield decreased 14.8% both resulting
from the launch of the Company's new deferred product which has lower
yields than the Company's expedited products.
Conference Call Information
Management will host a conference call on Friday, May 12, 2006 at
8:30 AM Eastern time to review the financial results. To access the
call, dial 800-257-3401, or 303-262-2125 for international callers. To
listen to the live webcast go to www.kittyhawkcompanies.com under the
Investor Relations area of the Web site. A replay of the conference
call will be available approximately one hour after the call's
conclusion and through midnight ET May 20, 2006 by dialing
800-405-2236 or 303-590-3000 for international callers and entering
the pass code 11060190#.
About Kitty Hawk, Inc.
www.kittyhawkcompanies.com
As a recognized leader in customer service, Kitty Hawk is the
premier provider of guaranteed, mission-critical, scheduled overnight
air and (beginning October 31, 2005) of scheduled time-definite
airport-to-airport less-than-truckload (LTL) ground freight
transportation to major business centers and surrounding communities
throughout North America, including, Alaska, Hawaii, Toronto, Canada,
and San Juan, Puerto Rico. With more than 30 years experience in the
aviation and air freight industries, Kitty Hawk plays a key connecting
role in the global supply chain. Kitty Hawk serves the logistics needs
of more than 550 freight forwarders, integrated carriers, logistics
companies and major airlines with its extensive integrated air and
ground network, fleet of Boeing 737-300SF and 727-200 cargo aircraft,
as well as a 239,000 square-foot cargo warehouse, US Customs clearance
and sort facility at its Fort Wayne, Indiana hub. In 2005, Kitty Hawk
became the North American launch customer for the fuel-efficient and
environmentally-friendly Boeing 737-300SF cargo aircraft. Kitty Hawk's
air and ground cargo networks and award-winning, guaranteed overnight
time-definite service are ideal for heavy-weight shipments (over 150
lbs), special goods with unique dimensions, perishables, animals and
other valuable shipments.
Statement under the Private Securities Litigation Reform Act:
This report may contain forward-looking statements that are
intended to be subject to the safe harbor protection provided by
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements relate to future
events or future financial and operating performance and involve known
and unknown risks and uncertainties that may cause actual results or
performance to be materially different from those indicated by any
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "forecast," "may,"
"will," "could," "should," "expect," "intends," "plan," "believe,"
"potential" or other similar words indicating future events or
contingencies. Some of the things that could cause actual results to
differ from expectations are: economic conditions; the impact of high
fuel prices; our inability to successfully implement and operate our
expanded scheduled airport-to-airport less than truckload deferred
freight network; our failure to close the acquisition of the operating
assets of Air Container Transport; our inability to successfully
operate and integrate the Air Container Transport operations; failure
of key suppliers and vendors to perform; our inability to attract
sufficient customers at economical prices for our expanded ground
network; unforeseen increases in liquidity and working capital
requirements related to our expanded ground network; potential
competitive responses from other operators of nationwide
coast-to-coast less than truckload networks; the continued impact of
terrorist attacks, global instability and potential U.S. military
involvement; the Company's significant lease obligations and
indebtedness; the competitive environment and other trends in the
Company's industry; changes in laws and regulations; changes in the
Company's operating costs including fuel; changes in the Company's
business plans; interest rates and the availability of financing;
liability and other claims asserted against the Company; labor
disputes; the Company's ability to attract and retain qualified
personnel; inflation. For a discussion of these and other risk
factors, see the Company's most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q filed with the Securities and Exchange
Commission.. All of the forward-looking statements are qualified in
their entirety by reference to the risk factors discussed therein.
These risk factors may not be exhaustive. The Company operates in a
continually changing business environment, and new risk factors emerge
from time to time. Management cannot predict such new risk factors,
nor can it assess the impact, if any, of such new risk factors on the
Company's business or events described in any forward-looking
statements. The Company disclaims any obligation to publicly update or
revise any forward-looking statements after the date of this report to
conform them to actual results.
-0-
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KITTY HAWK, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
Three months ended
March 31,
-------------------------
2006 2005
------------ ------------
(in thousands)
Revenue:
Scheduled freight $40,087 $32,842
ACMI -- 520
Miscellaneous -- 267
------------ ------------
Total revenue 40,087 33,629
Cost of revenue:
Flight expense 8,568 6,606
Transportation expense 9,108 2,928
Aircraft fuel expense 13,204 11,941
Aircraft maintenance expense 3,734 2,547
Freight handling expense 8,000 6,259
Depreciation and amortization 753 823
Operating overhead expense 3,021 2,949
------------ ------------
Total cost of revenue 46,388 34,053
------------ ------------
Gross loss (6,301) (424)
General and administrative expense 2,302 2,220
------------ ------------
Operating loss (8,603) (2,644)
Other (income) expense:
Interest expense 69 70
Other, net (288) (602)
------------ ------------
Net loss $(8,384) $(2,112)
============ ============
Preferred stock dividends 296 --
------------ ------------
Net loss allocable to common stockholders $(8,680) $(2,112)
============ ============
Basic loss per share $(0.17) $(0.04)
============ ============
Diluted loss per share $(0.17) $(0.04)
============ ============
Weighted average common shares outstanding --
basic 51,675,408 51,187,563
============ ============
Weighted average diluted common shares
outstanding -- diluted 51,675,408 51,187,563
============ ============
KITTY HAWK, INC. AND SUBSIDIARIES
BALANCE SHEET
March 31, December 31,
2006 2005
------------ ------------
Cash and cash equivalents $21,767 $26,650
Total assets 51,025 56,934
Notes payable and long-term obligations 2,162 2,305
Stockholders' equity $19,260 $27,407
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