Kitty Hawk (AMEX:KHK)
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Kitty Hawk, Inc. (AMEX:KHK) through its wholly-owned
subsidiary Kitty Hawk Ground, Inc., announced today that it has
completed its previously announced Asset Purchase Agreement with
privately held Air Container Transport, Inc. (ACT).
ACT operates an airport-to-airport expedited ground freight
network primarily in California, Oregon, Washington, British Columbia,
Colorado, Utah, Illinois and Texas. In 2005, ACT had revenues of $44.5
million. The transaction is expected to be accretive to Kitty Hawk's
financial performance in 2006.
"The closing of ACT marks a very important milestone for Kitty
Hawk. We have stayed focused on our strategic plan to build the only
independent expedited air and ground heavyweight freight network in
North America," said Robert W. Zoller, Kitty Hawk President and CEO.
"This acquisition further strengthens the Kitty Hawk brand through a
broader range of products and services for a wider range of customers;
improved geographic and international gateway coverage representing
new opportunities for growth; and the addition of an expanded and
experienced ground network infrastructure.
"ACT's operations and service offerings are complementary to our
existing business, with only a 25-30 percent duplication of
customers," said Gary Jensen, VP and COO of Kitty Hawk Ground. "With
Kitty Hawk and ACT's long-standing emphasis on customer satisfaction
and service, we look forward to a seamless operational integration."
Kitty Hawk Ground paid $5 million in a combination of cash and
shares of unregistered Kitty Hawk common stock for substantially all
of ACT's assets, other than certain excluded assets. In addition,
Kitty Hawk Ground reimbursed ACT for its normal operating expenses
from May 30, 2006 through the closing date and acquired the cash,
accounts receivable and prepaid items generated from the operation of
the acquired business in the ordinary course during the same period.
Kitty Hawk will register the resale of the shares of Kitty Hawk common
stock to be delivered to ACT within sixty days of the closing date.
ACT's assets will be operated by Kitty Hawk Ground doing business as
Air Container Transport. At closing, Kitty Hawk Ground assumed
contracts relating to ACT's customers, trucks and trailers, leased
operating facilities, various other facility and equipment leases and
its fleet of owner operators. Satish Jindel of SJ Consulting Group,
Inc. assisted and advised Kitty Hawk management with operational and
financial due diligence of ACT.
ACT is considered by independent analysts to be the West Coast's
dominant airport-to-airport expedited ground freight network carrier.
Its operations are focused along the I-5 highway corridor and extend
to all key business centers and international gateway airports from
Southwest Canada to San Diego, California and extending as far east as
Illinois and Texas. ACT operates in 26 cities offering air and ground
freight delivery as well as local pick up and delivery services. ACT
offers its customers full EDI capabilities, quality control, 24
hour/365 day dispatch, customer service assistance and express
service.
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
coast-to-coast expedited 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 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 ground 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 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; and costs. For a
discussion of these and other risk factors, see Item 7 of the
Company's Annual Report on Form 10-K for the year ended December 31,
2005. 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.