Kitty Hawk reports USPS success
US air cargo operator Kitty Hawk, Inc. has reported that its wholly owned subsidiaries, Kitty Hawk Cargo, Inc. and Kitty Hawk Aircargo, Inc., have successfully completed their contracts with the United States Postal Service. As a result of the successful completion of the USPS contracts, as well as improved financial performance of the company's expedited ground freight operations, Kitty Hawk expects to report its highest quarterly revenue since it began trading on the American Stock Exchange as well as solid profitability for the fourth quarter.
"The total revenue generated by Kitty Hawk as a result of this past year's C-NET operations has made the USPS our largest single customer for 2006," said Robert W. Zoller, President & CEO of Kitty Hawk, Inc. "Coupled with our acquisition and integration of Air Container Transport, Inc. in late June of 2006, the growth of Kitty Hawk's expedited air and ground network will result in expected 2006 fourth quarter revenue in excess of $80 million. For the year, revenue is expected to exceed $220 million, an increase of more than 41% over the $156 million in revenues recorded for 2005.
"We expect to be solidly profitable in the fourth quarter and currently expect that fourth quarter cash generation from operations, combined with existing debt financing, will be sufficient, based on current business conditions and outlook, to fund the execution of the Company's 2007 operating plan. Our fourth quarter financial performance has allowed us to fully repay all the cash borrowings from our revolving line of credit at year end," Mr. Zoller added.
Under the USPS contracts, Kitty Hawk managed a daytime multi-modal air and ground network for the holiday season mail from November 28 through December 24 through its hub in Ft. Wayne, Indiana ("C-NET") as well as provided its own aircraft in support of C-NET in addition to its scheduled overnight air and expedited ground networks. The daytime network operated from approximately 21 cities across the nation with a majority of the operation transiting through Kitty Hawk's state of the art 240,000 sq ft Fort Wayne, Indiana hub and sort facility. Kitty Hawk managed more than 5,000 truck departures, 1,500 aircraft flights, 4,500 cargo containers and approximately seven million cubic feet of aircraft capacity to meet the USPS' holiday shipping requirements.
"This year's C-NET was a significantly larger undertaking compared to recent years and encompassed multi-modal air and ground operations," continued Mr. Zoller.