Kitty Hawk Signs Major Contract with United States Postal Service
November 20 2006 - 6:30AM
Business Wire
Kitty Hawk, Inc. (AMEX: KHK) today announced that its wholly owned
subsidiary, Kitty Hawk Cargo, Inc., has entered into a contract
with the United States Postal Service ("USPS") to manage a daytime
air and ground cargo network (�C-NET�) for the holiday season mail
from November 28 through December 24, 2006. Based on successful
performance of the contract, the total revenue to Kitty Hawk is
estimated to be $29.33 million. The contract value includes the
previously reported USPS award of $10.5 million towards the C-NET
network, but does not include separate contracts with the USPS to
charter seven of Kitty Hawk�s own aircraft to operate in the C-NET
network. The daytime C-NET will operate through Kitty Hawk's Fort
Wayne, Indiana sort facility and will be in addition to Kitty
Hawk's own scheduled overnight air freight network. The C-NET is
anticipated to include, in addition to seven (7) of Kitty Hawk's
own aircraft, approximately 130 trucks procured by Kitty Hawk, over
200 seasonal employees at Kitty Hawk's Fort Wayne sort facility and
approximately 29 aircraft contracted by the USPS. Kitty Hawk is
also responsible for the ground handling at all cities that are
part of the C-NET. �Kitty Hawk team members are honored the United
States Postal Service has recognized the capabilities of our
unique, seamless and independent overnight air and expedited ground
freight transportation network. These capabilities include our
240,000 square foot Fort Wayne, Indiana air and ground hub as well
as the team�s ability to manage this significant coast-to-coast
daytime network for holiday mail and priority freight shipments. We
expect that successful performance of this contract will position
Kitty Hawk for improved profitability during the fourth quarter,�
commented Robert W. Zoller, President and CEO. �Throughout the
1990�s Kitty Hawk�s all cargo aircraft have worked on behalf of the
USPS,� added Steven Markhoff, Senior Vice President and Chief
Operating Officer of Kitty Hawk Cargo. �However, the 2006 C-NET is
the single largest project our team has been awarded by the USPS in
recent years and for the first time draws on all of the Company�s
experience managing and operating our extensive North American
expedited air and ground freight network. We look forward to
successfully executing this Network and possibly serving future
USPS programs,� Mr. Markhoff concluded. The contract provides for
minimum payments and agreed upon volumes from the USPS ranging from
approximately 250,000 cubic feet of mail per day in weeks one and
two to approximately 300,000 cubic feet of mail in weeks three and
four. C-NET is scheduled to run six days per week for each of the
four weeks. Kitty Hawk is responsible for the complete management
of C-NET and is subject to performance penalties for inexcusable
delays, as defined in the Contract, attributed to Kitty Hawk's
performance. 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 operate the C-NET
network which could result in monetary performance penalties
imposed by the USPS, 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. (AMEX: KHK) today announced that its
wholly owned subsidiary, Kitty Hawk Cargo, Inc., has entered into a
contract with the United States Postal Service ("USPS") to manage a
daytime air and ground cargo network ("C-NET") for the holiday
season mail from November 28 through December 24, 2006. Based on
successful performance of the contract, the total revenue to Kitty
Hawk is estimated to be $29.33 million. The contract value includes
the previously reported USPS award of $10.5 million towards the
C-NET network, but does not include separate contracts with the
USPS to charter seven of Kitty Hawk's own aircraft to operate in
the C-NET network. The daytime C-NET will operate through Kitty
Hawk's Fort Wayne, Indiana sort facility and will be in addition to
Kitty Hawk's own scheduled overnight air freight network. The C-NET
is anticipated to include, in addition to seven (7) of Kitty Hawk's
own aircraft, approximately 130 trucks procured by Kitty Hawk, over
200 seasonal employees at Kitty Hawk's Fort Wayne sort facility and
approximately 29 aircraft contracted by the USPS. Kitty Hawk is
also responsible for the ground handling at all cities that are
part of the C-NET. "Kitty Hawk team members are honored the United
States Postal Service has recognized the capabilities of our
unique, seamless and independent overnight air and expedited ground
freight transportation network. These capabilities include our
240,000 square foot Fort Wayne, Indiana air and ground hub as well
as the team's ability to manage this significant coast-to-coast
daytime network for holiday mail and priority freight shipments. We
expect that successful performance of this contract will position
Kitty Hawk for improved profitability during the fourth quarter,"
commented Robert W. Zoller, President and CEO. "Throughout the
1990's Kitty Hawk's all cargo aircraft have worked on behalf of the
USPS," added Steven Markhoff, Senior Vice President and Chief
Operating Officer of Kitty Hawk Cargo. "However, the 2006 C-NET is
the single largest project our team has been awarded by the USPS in
recent years and for the first time draws on all of the Company's
experience managing and operating our extensive North American
expedited air and ground freight network. We look forward to
successfully executing this Network and possibly serving future
USPS programs," Mr. Markhoff concluded. The contract provides for
minimum payments and agreed upon volumes from the USPS ranging from
approximately 250,000 cubic feet of mail per day in weeks one and
two to approximately 300,000 cubic feet of mail in weeks three and
four. C-NET is scheduled to run six days per week for each of the
four weeks. Kitty Hawk is responsible for the complete management
of C-NET and is subject to performance penalties for inexcusable
delays, as defined in the Contract, attributed to Kitty Hawk's
performance. 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 operate the C-NET
network which could result in monetary performance penalties
imposed by the USPS, 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.
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