Kitty Hawk (AMEX:KHK)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Kitty Hawk Charts. Click Here for more Kitty Hawk Charts.](/p.php?pid=staticchart&s=A%5EKHK&p=8&t=15)
Kitty Hawk, Inc. (AMEX:KHK), the parent company of Kitty
Hawk Cargo, Inc. and Kitty Hawk Aircargo, Inc., today reported fourth
quarter 2005 revenue of $45.9 million, an increase of $1.5 million
compared to fourth quarter 2004. Due largely to the investment in the
Company's scheduled airport-to-airport less than truckload (LTL)
deferred freight network, a $1.3 million write down in the value of
the Company's Boeing 727-200 aircraft parts and supplies and a $1.1
million increase in its reserve for surplus Boeing 727-200 aircraft
parts and supplies, Kitty Hawk generated a net loss allocable to
common stockholders for the fourth quarter of 2005 of $4.1 million, or
a loss of $0.08 per diluted common share. For the fourth quarter of
2004, Kitty Hawk reported net income of $5.4 million or $0.11 per
diluted share, which included the reversal of $4.7 million of aircraft
maintenance expenses.
"The fourth quarter of 2005 was one of the most significant
quarterly periods in Kitty Hawk's operating history," said Robert W.
Zoller, President and CEO. "During the fourth quarter, we launched our
new scheduled airport-to-airport LTL ground network, significantly
improved our balance sheet and began to realize the efficiencies from
the completed integration of our Boeing 737-300SF cargo aircraft into
the Kitty Hawk fleet. In addition, we strengthened our management team
and positioned the Company for growth in 2006. As of March 1, we are
providing expedited air cargo service to 57 North American markets and
scheduled LTL ground service to 46 North American markets, including
numerous international freight gateways. Today Kitty Hawk is the only
independent combined air and ground heavy weight freight network on
the continent.
"We have been very encouraged by the outstanding service levels of
our new scheduled airport-to-airport LTL network," said Mr. Zoller.
"From our start-up on October 31, 2005 through February 28, 2006, we
have grown our ground network customer base to more than 150 customers
and achieved an impressive on-time performance to the customer of
94.2% with a completion factor of 99.99% and loss damage ratio of
0.00002%."
"The successful start up of the scheduled airport-to-airport LTL
ground service, the higher lease costs of the fuel-efficient Boeing
737-300SF's and higher maintenance costs contributed to the net loss
for the fourth quarter," said James R. Kupferschmid, Vice President
and Chief Financial Officer. "We finished the fourth quarter with
$26.6 million in cash and have availability on our line of credit of
more than $6.5 million," Mr. Kupferschmid added.
Financial Results
For the full year 2005 Kitty Hawk reported $156.7 million in
revenue, compared to $158.5 million for the full year 2004. The
Company reported a net loss allocable to common stockholders of $8.8
million, or a loss of $0.17 per diluted common share for the full year
2005, compared to net income of $6.5 million, or $0.12 per diluted
share for the full year 2004.
Scheduled freight revenue for the fourth quarter of 2005 was $43.9
million, an increase of $857,000 compared to the fourth quarter 2004.
Scheduled freight revenue for the full year 2005 was $151.9 million,
compared to $154.0 million for the full year in 2004.
Fourth quarter 2005 system chargeable weight (accounting for
associated oversize and special handling requirements) was unchanged
as compared with the fourth quarter of 2004 and average yield (revenue
per unit of chargeable weight) increased 2.0% over the fourth quarter
of 2004. Full year 2005 system chargeable weight decreased 8.7% and
average yield increased 8.0% over the full year 2004.
The decrease in chargeable weight was due to reduced demand for
the Company's expedited air freight services, which was primarily
attributable to higher prices charged as a result of higher aircraft
fuel costs. The yield increase was primarily due to an increase in the
fuel surcharge, the implementation of a security surcharge and a
revised pricing structure implemented at the beginning of 2005. The
yield increase was partially offset by competitive pricing pressures
and a higher proportion of Kitty Hawk's chargeable weight during the
fourth quarter 2005 from lower yielding markets and lower yielding
services, including the Company's new LTL ground network.
During 2004 and 2005, the Company incurred $1.9 million and $3.7
million respectively in one-time costs, including induction expenses
and capital expenditures, to integrate the Boeing 737-300SF cargo
aircraft into the current fleet and operations. The Company does not
anticipate incurring additional Boeing 737-300SF cargo aircraft
induction costs during 2006. As of December 31, 2005, the Company
operated seven Boeing 737-300SF cargo aircraft under operating leases,
five owned Boeing 727-200 cargo aircraft and five Boeing 727-200 cargo
aircraft available under an aircraft and engine use agreement.
2006 Outlook
Due to the seasonality of the business and continued investment in
the scheduled airport-to-airport LTL ground network, the Company
expects a net loss in the first quarter of 2006 that will exceed the
fourth quarter 2005 net loss. During the first two quarters of 2006,
the Company expects its transportation and freight handling expenses
to continue to increase from the fourth quarter 2005 level due to the
Company's continued investment in its scheduled airport-to-airport LTL
ground network. In addition, the Company expects its capital
expenditures for the full year 2006 to approximately match its
historical annual rate of approximately $3 million.
"We are already seeing signs that our investment in the scheduled
airport-to-airport LTL ground network, as well as our continued strong
air cargo service, is increasing our revenue base and positioning us
as a more valuable resource for our freight forwarder customers in
North America and as a strategic partner for international air
carriers at U.S. gateways," said Mr. Zoller. "As a result, we expect
to expand our revenues as 2006 progresses and believe we are
positioned over the long term for profitable growth in a high aircraft
fuel cost operating environment."
Conference Call Information
Management will host a conference call tomorrow morning, March 21,
2006, at 9:30 a.m. Central time to review the financial results. To
access the call, dial 800-240-2430, or 303-262-2131 for international
callers. To listen to the live web cast go to:
www.kittyhawkcompanies.com in 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 March 28,
2006 by dialing 800-405-2236 or 303-590-3000 for international callers
and entering the following pass code:11055935. followed by the pound
sign.
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 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; 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-
*T
KITTY HAWK, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
Quarter ended December 31, Year ended December 31,
------------------------- -----------------------
2005 2004 2005 2004
----------- --------- ---------- -------------
(in thousands)
Revenue:
Scheduled freight $43,882 $43,025 $151,910 $154,016
ACMI 717 612 1,649 2,449
Miscellaneous 1,268 741 3,078 2,032
------------ ----------- ---------- -----------
Total revenue 45,867 44,378 156,637 158,497
Cost of revenue:
Flight expense 8,826 6,399 30,241 27,924
Transportation
expense 6,880 4,100 17,106 14,603
Aircraft fuel
expense 15,597 13,657 54,656 45,838
Aircraft
maintenance
expense 5,936 (1,576) 14,207 7,047
Freight
handling
expense 7,438 7,121 26,715 27,705
Depreciation
and
amortization 902 801 3,693 3,091
Operating
overhead
expense 2,172 2,388 11,146 10,809
------------ ----------- ---------- -----------
Total cost of
revenue 47,751 32,890 157,764 137,017
------------- ----------- ------------- -------------
Gross profit
(loss) (1,884) 11,488 (1,127) 21,480
General and
administrative
expense 2,078 2,986 8,052 11,073
------------ ----------- ---------- -----------
Operating income
(loss) (3,962) 8,502 (9,179) 10,407
Other (income)
expense:
Interest
expense 78 93 287 333
Other income (206) (327) (956) (426)
------------ ----------- ---------- -----------
Total other
income (128) (234) (669) (93)
------------ ----------- ---------- -----------
Income (loss)
before income
taxes (3,834) 8,736 (8,510) 10,500
Income tax
expense -- 3,326 -- 3,970
------------ ----------- ---------- -----------
Net income (loss) $(3,834) $5,410 $(8,510) $6,530
============ =========== ========== ===========
Preferred stock
dividends,
including
beneficial
conversion
feature 313 -- 313 --
------------ ----------- ---------- -----------
Net income (loss)
allocable to
common
stockholders $(4,147) $5,410 $(8,823) $6,530
============ =========== ========== ===========
Basic income
(loss) per share $(0.08) $0.11 $(0.17) $0.13
============ =========== ========== ===========
Diluted income
(loss) per share $(0.08) $0.11 $(0.17) $0.12
============ =========== ========== ===========
Weighted average
basic common
shares
outstanding 51,582,032 51,051,788 51,447,898 50,779,179
============ =========== ========== ===========
Weighted average
diluted common
shares
outstanding 51,582,032 53,889,260 51,447,898 53,767,124
============ =========== ========== ===========
KITTY HAWK, INC. AND SUBSIDIARIES
BALANCE SHEET
December 31, 2005 December 31, 2004
----------------- -----------------
Cash and cash equivalents $26,650 $16,284
Total assets 56,934 49,070
Notes payable and long-term
obligations 2,305 2,755
Stockholders' equity $27,407 $34,116
*T