Kitty Hawk Inc. Closes Acquisition of Air Container Transport
22 Junio 2006 - 3:01PM
Business Wire
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.
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