Kitty Hawk, Inc. (AMEX:KHK), the parent company of Kitty Hawk
Cargo, Inc., Kitty Hawk Ground, Inc. and Kitty Hawk Aircargo, Inc.,
today reported results for the third quarter of 2006. Revenue for
the third quarter of 2006 was $57.9 million, an increase of 42.3%
as compared to the $40.7 million reported for the third quarter of
2005. Approximately $1.2 million of the increase in revenue for the
third quarter was attributable to the Company�s expedited air
freight product and $14.2 million of the increase was attributable
to the expedited ground freight product. Kitty Hawk introduced its
expedited ground freight product in October 2005. Kitty Hawk
generated a net loss allocable to common stockholders for the third
quarter of 2006 of $6.3 million, or a loss of $0.12 per diluted
common share, 29% less than the loss reported for the second
quarter of 2006. For the third quarter of 2005, Kitty Hawk reported
a net loss of $409,000 or a loss of $0.01 per diluted common share.
�During the third quarter we made progress toward our goal of
diversifying our product offering and revenue,� said Robert W.
Zoller. �Ground product revenue accounted for approximately 24% of
third quarter revenue as compared to no revenue from this product
offering during the third quarter of 2005. �We have worked toward
developing new marketing and sales synergies, scheduling
efficiencies and improved cost controls. We continued to emphasize
optimizing our ground transportation services, including matching
customer service requirements and available capacity as well as
transitioning to a higher percentage of owner-operator, in-house
and lower-cost regional contract trucks. While we have more work to
do, we are now effectively cross selling to the customers of the
ACT operations that we acquired in late June as well as attracting
new domestic and international customers to the Kitty Hawk brand as
demonstrated by a year-over-year chargeable weight increase of
319%. In addition, the number of active ground customer accounts
has nearly doubled since the first of the year,� Mr. Zoller added.
�We are also beginning the initial integration of our new
information technology system for improved customer booking,
tracking, communications, billings and collection. This new system
is designed to transform our information technology into a
competitive advantage for the Company and provide our customers
with ease of use that is as good as or better than, other scheduled
freight network systems. We expect to begin generating benefits
from the installation during the first quarter of 2007,� Mr. Zoller
said. �Our traditional seasonal upswing appears to be weaker than
historic levels. However, we are continuing to position the company
for improved performance in the future. We expect business
development efforts to generate results during the fourth quarter,
and are continuing to focus on high-level customer service, yield
improvement, capacity management and cost control,� concluded Mr.
Zoller. Scheduled freight revenue for the third quarter of 2006 was
$55.1 million, an increase of 38.7% compared to the third quarter
of 2005. Third quarter 2006 system chargeable weight (accounting
for associated oversize and special handling requirements)
increased 319% as compared to the third quarter of 2005 and average
yield decreased 65%, both resulting from the launch of the
Company's new expedited ground product which has significantly
greater volumes and lower yields than the Company's expedited air
products. Expedited ground product revenues during the third
quarter of 2006 were $14.2 million. Transportation expense for the
second quarter increased $13.5 million or 398.8% from the quarter
ended September 30, 2005. This increase is primarily due to a $12.6
million increase related to our network trucking expense including
purchased transportation costs and owner operator expenses due to
providing our expedited ground freight product, higher fuel
surcharges charged by the third party truck carriers and costs to
operate the assets acquired from ACT. Kitty Hawk�s aircraft fuel
averaged $2.32�per gallon as compared to $2.01 per gallon for the
quarter ended September 30, 2005, an increase of 15.7%. Aircraft
fuel expense increased $1.2 million. The increase resulted from an
increase in the average cost of aircraft fuel of $2.0 million
partially offset by a $0.8 million decrease in fuel consumption.
Operating the trucks acquired from ACT in the network during the
third quarter of 2006 contributed $0.8 million to the increase in
reported total fuel expense. Important information about the
Company�s results from operations and other subsequent events that
should be read in conjunction with this release, including an
update of a previously disclosed proposed daytime network for
portions of November and December and a recent amendment to the
Company�s credit facility are included in the Form 10-Q for the
period ended September 30, 2006 filed by the Company earlier today.
Conference Call Information Management will host a conference call
on Tuesday, November 14, 2006 at 5:00 p.m. Eastern time to review
the financial results. To access the call, dial 800-257-7063, or
303-205-0044 for international callers. To listen to the live web
cast 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 November 22 by dialing 800-405-2236 for
domestic callers or 303-590-3000 for international callers, both
using the passcode 11075445#. 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 scheduled
time-definite 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, U.S.
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 scheduled freight network 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 expedited ground freight network; our inability
to successfully operate and integrate the Air Container Transport
operation and to retain their customers; 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 airport-to-airport
ground freight 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; limitations upon
financial and operating flexibility due to the terms of our credit
facility; liability and other claims asserted against the Company;
labor disputes; the Company's ability to attract and retain
qualified personnel; and 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. � KITTY HAWK, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS � Three months ended September 30, Nine
months ended September 30, 2006� 2006� 2006� 2005� (in thousands,
except share and per share data) Revenue: Scheduled freight network
$ 55,093� $ 39,724� $ 139,443� $ 108,028� ACMI 19� 400� 949� 932�
Miscellaneous 2,809� 566� 3,084� 1,810� Total revenue 57,921�
40,690� 143,476� 110,770� Cost of revenue: Flight expense 8,465�
8,134� 25,222� 21,415� Transportation expense 16,863� 3,381�
38,678� 10,226� Fuel expense 15,869� 13,874� 43,223� 39,059�
Maintenance expense 4,136� 3,219� 11,747� 8,271� Freight handling
expense 9,718� 6,472� 26,671� 19,277� Depreciation and amortization
1,041� 966� 2,570� 2,791� Operating overhead expense 5,001� 3,152�
11,320� 8,974� Total cost of revenue 61,093� 39,198� 159,431�
110,013� Gross profit (loss) (3,172) 1,492� (15,955) 757� General
and administrative expense 2,713� 1,898� 7,291� 5,974� Operating
loss (5,885) (406) (23,246) (5,217) Other (income) expense:
Interest expense 169� 66� 311� 209� Other, net (28) (63) (510)
(750) Net loss (6,026) (409) (23,047) (4,676) Preferred stock
dividends 291� �� 881� �� Net loss allocable to common stockholders
$ (6,317) $ (409) $ (23,928) $ (4,676) Basic loss per share $
(0.12) $ (0.01) $ (0.46) $ (0.09) Diluted loss per share $ (0.12) $
(0.01) $ (0.46) $ (0.09) Weighted average common shares outstanding
- basic 53,853,833� 51,582,032� 52,517,887� 51,403,186� Weighted
average diluted common shares outstanding - diluted 53,853,833�
51,582,032� 52,517,887� 51,403,186� � KITTY HAWK, INC. AND
SUBSIDIARIES BALANCE SHEET � September 30, 2006 December 31, 2005
(in thousands) Cash and cash equivalents $ 2,395� $ 26,650� Total
assets 48,573� 56,934� Notes payable and long-term obligations
10,373� 2,304� Stockholders' equity $ 6,091� $ 27,407� Kitty Hawk,
Inc. (AMEX:KHK), the parent company of Kitty Hawk Cargo, Inc.,
Kitty Hawk Ground, Inc. and Kitty Hawk Aircargo, Inc., today
reported results for the third quarter of 2006. Revenue for the
third quarter of 2006 was $57.9 million, an increase of 42.3% as
compared to the $40.7 million reported for the third quarter of
2005. Approximately $1.2 million of the increase in revenue for the
third quarter was attributable to the Company's expedited air
freight product and $14.2 million of the increase was attributable
to the expedited ground freight product. Kitty Hawk introduced its
expedited ground freight product in October 2005. Kitty Hawk
generated a net loss allocable to common stockholders for the third
quarter of 2006 of $6.3 million, or a loss of $0.12 per diluted
common share, 29% less than the loss reported for the second
quarter of 2006. For the third quarter of 2005, Kitty Hawk reported
a net loss of $409,000 or a loss of $0.01 per diluted common share.
"During the third quarter we made progress toward our goal of
diversifying our product offering and revenue," said Robert W.
Zoller. "Ground product revenue accounted for approximately 24% of
third quarter revenue as compared to no revenue from this product
offering during the third quarter of 2005. "We have worked toward
developing new marketing and sales synergies, scheduling
efficiencies and improved cost controls. We continued to emphasize
optimizing our ground transportation services, including matching
customer service requirements and available capacity as well as
transitioning to a higher percentage of owner-operator, in-house
and lower-cost regional contract trucks. While we have more work to
do, we are now effectively cross selling to the customers of the
ACT operations that we acquired in late June as well as attracting
new domestic and international customers to the Kitty Hawk brand as
demonstrated by a year-over-year chargeable weight increase of
319%. In addition, the number of active ground customer accounts
has nearly doubled since the first of the year," Mr. Zoller added.
"We are also beginning the initial integration of our new
information technology system for improved customer booking,
tracking, communications, billings and collection. This new system
is designed to transform our information technology into a
competitive advantage for the Company and provide our customers
with ease of use that is as good as or better than, other scheduled
freight network systems. We expect to begin generating benefits
from the installation during the first quarter of 2007," Mr. Zoller
said. "Our traditional seasonal upswing appears to be weaker than
historic levels. However, we are continuing to position the company
for improved performance in the future. We expect business
development efforts to generate results during the fourth quarter,
and are continuing to focus on high-level customer service, yield
improvement, capacity management and cost control," concluded Mr.
Zoller. Scheduled freight revenue for the third quarter of 2006 was
$55.1 million, an increase of 38.7% compared to the third quarter
of 2005. Third quarter 2006 system chargeable weight (accounting
for associated oversize and special handling requirements)
increased 319% as compared to the third quarter of 2005 and average
yield decreased 65%, both resulting from the launch of the
Company's new expedited ground product which has significantly
greater volumes and lower yields than the Company's expedited air
products. Expedited ground product revenues during the third
quarter of 2006 were $14.2 million. Transportation expense for the
second quarter increased $13.5 million or 398.8% from the quarter
ended September 30, 2005. This increase is primarily due to a $12.6
million increase related to our network trucking expense including
purchased transportation costs and owner operator expenses due to
providing our expedited ground freight product, higher fuel
surcharges charged by the third party truck carriers and costs to
operate the assets acquired from ACT. Kitty Hawk's aircraft fuel
averaged $2.32 per gallon as compared to $2.01 per gallon for the
quarter ended September 30, 2005, an increase of 15.7%. Aircraft
fuel expense increased $1.2 million. The increase resulted from an
increase in the average cost of aircraft fuel of $2.0 million
partially offset by a $0.8 million decrease in fuel consumption.
Operating the trucks acquired from ACT in the network during the
third quarter of 2006 contributed $0.8 million to the increase in
reported total fuel expense. Important information about the
Company's results from operations and other subsequent events that
should be read in conjunction with this release, including an
update of a previously disclosed proposed daytime network for
portions of November and December and a recent amendment to the
Company's credit facility are included in the Form 10-Q for the
period ended September 30, 2006 filed by the Company earlier today.
Conference Call Information Management will host a conference call
on Tuesday, November 14, 2006 at 5:00 p.m. Eastern time to review
the financial results. To access the call, dial 800-257-7063, or
303-205-0044 for international callers. To listen to the live web
cast 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 November 22 by dialing 800-405-2236 for
domestic callers or 303-590-3000 for international callers, both
using the passcode 11075445#. 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 scheduled
time-definite 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, U.S.
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 scheduled freight network 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 expedited ground freight network; our inability
to successfully operate and integrate the Air Container Transport
operation and to retain their customers; 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 airport-to-airport
ground freight 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;
limitations upon financial and operating flexibility due to the
terms of our credit facility; liability and other claims asserted
against the Company; labor disputes; the Company's ability to
attract and retain qualified personnel; and 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 Three months ended Nine
months ended September 30, September 30, -----------------------
----------------------- 2006 2006 2006 2005 ----------- -----------
----------- ----------- (in thousands, except share and per share
data) Revenue: Scheduled freight network $55,093 $39,724 $139,443
$108,028 ACMI 19 400 949 932 Miscellaneous 2,809 566 3,084 1,810
----------- ----------- ----------- ----------- Total revenue
57,921 40,690 143,476 110,770 Cost of revenue: Flight expense 8,465
8,134 25,222 21,415 Transportation expense 16,863 3,381 38,678
10,226 Fuel expense 15,869 13,874 43,223 39,059 Maintenance expense
4,136 3,219 11,747 8,271 Freight handling expense 9,718 6,472
26,671 19,277 Depreciation and amortization 1,041 966 2,570 2,791
Operating overhead expense 5,001 3,152 11,320 8,974 -----------
----------- ----------- ----------- Total cost of revenue 61,093
39,198 159,431 110,013 ----------- ----------- -----------
----------- Gross profit (loss) (3,172) 1,492 (15,955) 757 General
and administrative expense 2,713 1,898 7,291 5,974 -----------
----------- ----------- ----------- Operating loss (5,885) (406)
(23,246) (5,217) Other (income) expense: Interest expense 169 66
311 209 Other, net (28) (63) (510) (750) ----------- -----------
----------- ----------- Net loss (6,026) (409) (23,047) (4,676)
Preferred stock dividends 291 -- 881 -- ----------- -----------
----------- ----------- Net loss allocable to common stockholders
$(6,317) $(409) $(23,928) $(4,676) =========== ===========
=========== =========== Basic loss per share $(0.12) $(0.01)
$(0.46) $(0.09) =========== =========== =========== ===========
Diluted loss per share $(0.12) $(0.01) $(0.46) $(0.09) ===========
=========== =========== =========== Weighted average common shares
outstanding - basic 53,853,833 51,582,032 52,517,887 51,403,186
=========== =========== =========== =========== Weighted average
diluted common shares outstanding - diluted 53,853,833 51,582,032
52,517,887 51,403,186 =========== =========== ===========
=========== *T -0- *T KITTY HAWK, INC. AND SUBSIDIARIES BALANCE
SHEET September 30, December 31, 2006 2005 -------------
------------ (in thousands) Cash and cash equivalents $ 2,395 $
26,650 Total assets 48,573 56,934 Notes payable and long-term
obligations 10,373 2,304 Stockholders' equity $6,091 $27,407 *T
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