ABX Air, Inc. Reports Increase in First Quarter Revenues and Earnings.WILMINGTON, Ohio For other places with the same name, see Wilmington (disambiguation). Wilmington is a city in Clinton County, Ohio, United States. The population was 11,921 at the 2000 census. It is the county seat of Clinton County. -- ABX Air ABX Air (NASDAQ: ABXA) is a cargo airline based in Wilmington, Ohio, USA. It operates scheduled, ad hoc charter and ACMI freight services, including overnight express small-package services and freight in the USA, Canada and Puerto Rico. , Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ABXA) reported today gains in first quarter revenues and earnings for the quarter ended March 31, 2005. Highlights of those results as compared with the first quarter of 2004 include: --First quarter revenues up 25.3% to $346.6 million; --First quarter net earnings up 18.4% to $7.1 million, or $0.12 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share; --Revenues from customers other than DHL DHL abbr. 1. Doctor of Hebrew Letters 2. Doctor of Hebrew Literature grew to $6.4 million in the first quarter, up 87.2%; Earnings from non-DHL sources grew to $2.0 million, a 55.6% increase over the prior year; --Packages handled during the first quarter increased 30.8% to 160.6 million versus the first quarter of 2004; "We are extremely pleased to report another strong quarter," said President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Joe Hete. "In addition to supporting DHL, we were able to sharply increase our revenues and earnings from our non-DHL business. We thank our dedicated and committed employees for making this possible.". For the quarter ended March 31, 2005, ABX ABX Antibiotics ABX Airborne Express ABX Abstracting ABX Albury, New South Wales, Australia - Albury (Airport Code) ABX Automatic Branch Exchange ABx Non-Antibiotics ABX Asset Backed Securities Index ABX Acoustic Bass Extension Air's net earnings were $7.1 million, or $0.12 per diluted share, on revenues of $346.6 million. Net earnings improved from the first quarter of 2004, when ABX Air earned $6.0 million, or $0.10 per diluted share, on revenues of $276.7 million. ABX Air's net earnings of $7.1 million during the first quarter of 2005 included $5.1 million from its two commercial agreements with DHL Express (USA), Inc. ("DHL") and $2.0 million from other (non-DHL) business. ABX Air's net earnings of $6.0 million in the first quarter of 2004 included $4.7 million from the two DHL agreements and $1.3 million from non-DHL business volume. Results Associated with the DHL Agreements Under the two commercial agreements with DHL, the aircraft, crew, maintenance and insurance agreement ("ACMI ACMI Aircraft, Crew, Maintenance and Insurance (wet lease) ACMI Art & Creative Materials Institute ACMI Air Combat Maneuvering Instrumentation ACMI American College of Medical Informatics ACMI Australian Center for the Moving Image agreement") and a hub and line-haul services agreement ("Hub Services agreement"), ABX earns a base mark-up mark-up Noun an amount added to the cost of something to provide the seller with a profit Verb mark up to increase the cost of something by an amount or percentage in order to make a profit of 1.75% on eligible costs and can earn incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. mark-up for meeting certain quarterly cost-related goals as well as annual cost-related and service goals. Any mark-up earned from attainment of the annual cost-related and service goals is recognized in the fourth quarter. ABX Air's first quarter 2005 net earnings of $5.1 million from the two contracts included $4.5 million from the base mark-up and $0.6 million from attainment of cost-related incremental mark-up under the two agreements. The $4.7 million earned during the first quarter of 2004 from the two DHL agreements included $3.7 million from the base mark-up and $1.0 million from attainment of cost-related incremental mark-up under the two agreements. Performance Versus Quarterly Cost-Related Goals: Under the two agreements with DHL, ABX Air has the potential to recognize revenues from an incremental mark-up each quarter based on achieving certain cost-related goals. During the first quarter of 2005, ABX Air earned $0.6 million or 46.5% of the maximum incremental quarterly mark-up. Incremental mark-up from the ACMI agreement totaled $0.5 million, or 86.1% of the maximum quarterly mark-up. Incremental mark-up from the Hub Services agreement totaled $0.1 million, or 11.0% of the maximum quarterly mark-up. During the first quarter of 2004, ABX Air earned $1.0 million, or 85.2% of the maximum quarterly mark-up under the two agreements. Incremental mark-up from the ACMI agreement totaled $0.5 million, or 73.0% of the maximum quarterly mark-up. Incremental mark-up from the Hub Services agreement totaled $0.5 million, or 100% of the maximum quarterly mark-up. The incremental mark-up improvement under the ACMI agreement, as compared to the first quarter of 2004, resulted from flying greater than anticipated aircraft hours during the first quarter of 2005, while incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. lower than anticipated maintenance expenses. The factors contributing to the incremental mark-up decrease under the Hub Services agreement as compared to the prior year included a more severe winter at the main sort hub in Ohio and in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. . Additionally, during January January: see month. 2005, ABX Air replaced a large number of contract workers being supplied to it by a contract employment agency at DHL's main sort hub in Ohio and one of its regional hubs hubs - hub upon becoming concerned with the immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. status of some of those workers. These sort operations were negatively impacted until ABX Air replaced the contract workers. Packages handled during the first quarter of 2005 totaled 160.6 million, a 30.8% increase compared to the first quarter 2004 volume. "DHL is making a significant investment in its main Ohio sort hub and in several of its regional hubs, which will improve shipment throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. capacity and allow DHL to offer greater value to its customers. We look forward to supporting DHL's efforts as it grows its domestic business volumes," stated Hete. Performance Versus Annual Cost-Related and Service Goals: The two commercial agreements with DHL allow ABX Air to earn additional incremental mark-up for meeting certain annual cost and service goals. Incremental mark-up earned on the annual goals is only recognized in the fourth quarter. Maximum incremental mark-up available from the annual cost-related goals is approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 0.81% of eligible, annual costs under both commercial agreements. Maximum incremental mark-up available from the annual service goals is 0.25% of costs subject to mark-up under the ACMI agreement and 0.75% of costs subject to mark-up under the Hub Services agreement. If ABX Air's actual performance for the first three months of 2005 is sustained for the full year, incremental mark-up from the annual service incentives would be equivalent to 40% of the maximum available under the ACMI agreement and 36.7% of the maximum available under the Hub Services agreement. Actual cost and service performance for the first three months of 2005 is not necessarily indicative indicative: see mood. of full year performance, and results during the last nine months of 2005 may improve, or detract from detract from verb 1. lessen, reduce, diminish, lower, take away from, derogate, devaluate << OPPOSITE enhance verb 2. , performance through March 31, 2005. Results Associated with Customers other than DHL Non-DHL revenues grew to $6.4 million in the first quarter of 2005, representing an 87.2% increase over the first quarter of 2004 non-DHL revenues of $3.4 million. Earnings from non-DHL business increased to $2.0 million, up 55.6% as compared to the first quarter of 2004 non-DHL earnings of $1.3 million. The increase in non-DHL revenues was primarily the result of an increase in the level of aircraft maintenance services and parts sales as well as revenues associated with ABX Air's operation of a U.S. postal Postal can refer to:
Other Items/Outlook As the Company previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , DHL intends to reduce the number of aircraft that ABX Air operates on its behalf by the end of 2005, at which time DHL will have completed the consolidation at the main sort hub in Wilmington, Ohio. Additionally, ABX Air has been notified by DHL that it intends to assume administration of those charter aircraft that are currently contracted by ABX Air from other airlines to operate in tertiary tertiary (tûr`shēârē), in the Roman Catholic Church, member of a third order. The third orders are chiefly supplements of the friars—Franciscans (the most numerous), Dominicans, and Carmelites. markets for which the volumes do not justify the use of larger Company-owned aircraft. This transition of such contracted aircraft to DHL is expected to occur during the third quarter of 2005. The expenses associated with such contracted aircraft totaled $5.5 million during the first quarter of 2005. On an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, these expenses are projected at $22.0 million. The annualized impact of the loss of this business volume from ABX Air's ACMI agreement is projected at between $0.4 million and $0.7 million in net earnings and cash flow. For fiscal 2005, the impact on net earnings and cash flows is projected in a range of between $0.2 million and $0.4 million, as the reduction in business volume will be limited to the last half of the year. "We will work diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d with our largest customer to make the consolidation of operations at the main sort hub as seamless See seamless integration. as possible, while continuing to seek opportunities to grow our non-DHL revenue base," stated Hete. ABX Air, Inc. is a cargo airline This article is about the general type of air carrier. For the Israeli cargo airline, see CAL Cargo Air Lines. Cargo airlines (or airfreight carriers, and derivatives of these names) are airlines dedicated to the transport of cargo. with a fleet of 114 in-service in-service In-service training adjective Referring to any form of on-the-job training noun In-service training of an employee aircraft that operates out of Wilmington, Ohio, and 18 hubs throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . ABX Air became an independent public company effective August 16, 2003, as a result of the separation from its former parent company, Airborne airborne /air·borne/ (ar´born) suspended in, transported by, or spread by air. airborne, adj carried through the air. In health care settings, viruses or bacteria may become airborne, e.g. , Inc., which was acquired by DHL Worldwide Express B. V. In addition to providing airlift capacity and sort center staffing to DHL Express (USA), Inc., ABX Air provides charter and maintenance services to a diverse group of customers. With over 8,000 employees, ABX Air is the largest employer in a several county area in southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. Ohio. Except for historical information contained herein, the matters discussed in this release contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. ABX Air's actual results may differ materially from the results discussed in the forward-looking statements. There are a number of important factors that could cause ABX Air's actual results to differ materially from those indicated by such forward-looking statements. These factors include but are not limited to a significant reduction in the scope of services under the commercial agreements with DHL, maintaining cost and service level performance, the ability to generate revenues from sources other than DHL and other factors that are contained from time to time in ABX Air's filings with the U.S. Securities and Exchange Commission, including ABX Air's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . Readers should carefully review this release and should not place undue reliance on ABX Air's forward-looking statements. These forward-looking statements were based on information, plans and estimates as of the date of this release. ABX Air undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
ABX AIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months
Ended March 31
-------------------
2005 2004
--------- ---------
REVENUES $346,594 $276,686
OPERATING EXPENSES:
Salaries, wages and benefits 142,460 120,428
Purchased line-haul 73,835 47,956
Fuel 58,717 42,378
Maintenance, materials and repairs 27,773 27,484
Depreciation and amortization 9,632 9,096
Landing and ramp 9,766 7,867
Rent 2,099 1,606
Other operating expenses 13,137 11,684
--------- ---------
337,419 268,499
--------- ---------
EARNINGS FROM OPERATIONS 9,175 8,187
INTEREST EXPENSE, NET 2,092 2,207
INCOME TAXES - -
--------- ---------
NET EARNINGS $ 7,083 $ 5,980
========= =========
EARNINGS PER SHARE:
Basic and Diluted earnings per share $ 0.12 $ 0.10
========= =========
WEIGHTED AVERAGE SHARES:
Basic and Diluted 58,270 58,270
========= =========
ABX AIR, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
March 31, December 31,
2005 2004
------------- -------------
ASSETS:
Cash $ 52,981 $ 38,749
Accounts receivable, net 51,232 54,677
Other current assets 19,709 17,595
------------- -------------
Total Current Assets 123,922 111,021
Property and equipment, net 357,346 351,646
Other assets 10,074 10,256
------------- -------------
Total Assets $ 491,342 $ 472,923
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities $ 152,127 $ 142,569
Long-term Obligations 244,183 242,405
Stockholders' Equity 95,032 87,949
------------- -------------
Total Liabilities and Stockholders'
Equity $ 491,342 $ 472,923
============= =============
ABX AIR, INC.
EARNINGS SUMMARY
(In thousands)
For the Three Months Ended March 31, 2005
-------------------------------------------
DHL
-------------------------------------------
Hub Other
ACMI Services Reimbursable Subtotal
--------- --------- ------------- ---------
Revenues:
Base $122,698 $136,880 $ 79,955 $339,533
Quarterly incremental
mark-up 561 80 - 641
--------- --------- ------------- ---------
Total revenues 123,259 136,960 79,955 340,174
Operating expenses 118,808 134,526 79,316 332,650
Interest expense (income),
net 1,780 - 639 2,419
--------- --------- ------------- ---------
Total expense 120,588 134,526 79,955 335,069
--------- --------- ------------- ---------
Earnings $ 2,671 $ 2,434 $ - $ 5,105
========= ========= ============= =========
For the Three Months Ended
March 31, 2005
---------------------------
Customers
other than
DHL Total
------------- -------------
Revenues:
Base $ 6,420 $ 345,953
Quarterly incremental mark-up - 641
------------- -------------
Total revenues 6,420 346,594
Operating expenses 4,769 337,419
Interest expense (income), net (327) 2,092
------------- -------------
Total expense 4,442 339,511
------------- -------------
Earnings $ 1,978 $ 7,083
============= =============
For The Three Months Ended March 31, 2004
-------------------------------------------
DHL
-------------------------------------------
Hub Other
ACMI Services Reimbursable Subtotal
--------- --------- ------------- ---------
Revenues:
Base $120,069 $ 96,732 $ 55,474 $272,275
Incremental markup 465 516 - 981
--------- --------- ------------- ---------
Total revenues 120,534 97,248 55,474 273,256
Operating expenses 116,556 95,069 54,715 266,340
Interest expense, net 1,448 - 759 2,207
--------- --------- ------------- ---------
Total expense 118,004 95,069 55,474 268,547
--------- --------- ------------- ---------
Earnings $ 2,530 $ 2,179 - $ 4,709
========= ========= ============= =========
For The Three Months Ended
March 31, 2004
---------------------------
Customers
other than
DHL Total
------------- -------------
Revenues:
Base $ 3,430 $ 275,705
Incremental markup - 981
------------- -------------
Total revenues 3,430 276,686
Operating expenses 2,159 268,499
Interest expense, net - 2,207
------------- -------------
Total expense 2,159 270,706
------------- -------------
Earnings $ 1,271 $ 5,980
============= =============
Note: The results above for customers other than DHL do not reflect an allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of overhead costs overhead costs see fixed costs. . The provisions of the commercial agreements with DHL do not require an allocation of overhead until such time as ABX derives more than 10% of its total revenue from non-DHL sources. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion