<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
SEPTEMBER 17, 1997
KITTY HAWK, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
State of Delaware 0-25202 75-2564006
(STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.)
1515 West 20th Street
P.O. Box 612787
Dallas/Fort Worth International Airport, Texas 75261
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (972) 456-2200
Not Applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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<PAGE> 2
The undersigned Registrant hereby amends the following items,
financial statements, exhibits and other portions of its Current Report on Form
8-K, originally filed with the Securities and Exchange Commission on October 2,
1997, as set forth herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
On September 17, 1997, Kitty Hawk, Inc., through its wholly owned
subsidiary Kitty Hawk Aircargo, Inc., acquired sixteen Boeing 727 aircraft and
certain related contracts (the "Acquisition of the AIA 727 Fleet") from
American International Airways, Inc. ("AIA"). The purpose of this amended Form
8-K is to file required financial statements relating to the Acquisition of the
AIA 727 Fleet, including required pro forma financial information. The
following financial statements relating to the Acquisition of the AIA 727 Fleet
are attached hereto:
(a) Financial Statements
<TABLE>
<CAPTION>
FINANCIAL STATEMENT INDEX PAGE
------------------------- ----
<S> <C>
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Statements of Certain Assets Sold of AIA as of June 30, 1997 (Unaudited) and December 31,
1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Statements of Revenues and Direct Expenses for the six months ended June 30, 1997 and 1996
(Unaudited) and for the years ended December 31, 1996 and 1995 . . . . . . . . . . . . . . F-4
Notes to Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
</TABLE>
(b) Pro Forma Financial Information
<TABLE>
<CAPTION>
PRO FORMA FINANCIAL STATEMENTS INDEX PAGE
------------------------------------ ----
<S> <C>
Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Unaudited Pro Forma Balance Sheet at June 30, 1997 . . . . . . . . . . . . . . . . . . . . F-9
Unaudited Pro Forma Statement of Operations for the twelve months ended December 31, 1996 . F-10
Unaudited Pro Forma Statement of Operations for the six months ended June 30, 1997 . . . . F-11
Notes to Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . F-12
</TABLE>
(c) Exhibits
2.1 Agreement for Sale and Purchase of AIA 727 Fleet, dated as of
July 31, 1997, by and among, AIA, the Company, Kalitta Flying Service,
Inc., Conrad Kalitta and Kitty Hawk Aircargo, Inc. (1)
23.1 Consent of Deloitte & Touche LLP. (2)
- ---------------------
(1) Previously filed.
(2) Filed herewith.
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the
Agreement for Sale and Purchase of the AIA 727 Fleet have been omitted. The
Company hereby agrees to furnish such schedules and exhibits upon request of
the Securities and Exchange Commission.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
KITTY HAWK, INC.
Date: November 6, 1997 By: /s/ RICHARD R. WADSWORTH
--------------------------------
Name: Richard R. Wadsworth
Title: Senior Vice President --
Finance, Chief Financial
Officer and Secretary
3
<PAGE> 4
AMERICAN INTERNATIONAL AIRWAYS, INC.
Statements of Certain Assets Sold of AIA for the Six Months Ended June 30,
1997 (Unaudited) and the Years Ended December 31, 1996 and 1995, and the
Related Statements of Revenues and Direct Expenses for the Six Months Ended
June 30, 1997 and 1996 (Unaudited) and for the Years Ended December 31, 1996
and 1995, and Independent Auditors' Report
F-1
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
American International Airways, Inc.
Ypsilanti, Michigan
We have audited the accompanying statements of certain assets sold of American
International Airways, Inc. ("AIA") as of December 31, 1996 and 1995, and the
related statements of revenues and direct expenses for the years then ended.
These statements are the responsibility of AIA's management. Our responsibility
is to express an opinion on these statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of certain assets sold of AIA
and the related statements of revenues and direct expenses are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements of certain assets sold of AIA and
the related statements of revenues and direct expenses. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the statements of
certain assets sold of AIA and the related statements of revenues and direct
expenses. We believe that our audits provide a reasonable basis for our
opinion.
The accompanying statements of certain assets sold of AIA and the related
statements of revenues and direct expenses were prepared for the purpose of
complying with the Purchase Agreement as discussed in Note 2 and are not
intended to be a complete presentation of the financial position and results of
operations of AIA and related companies.
In our opinion, the accompanying statements referred to above present fairly,
in all material respects, the certain assets sold of AIA as of December 31,
1996 and 1995, and the related revenues and direct expenses for the years then
ended, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Ann Arbor, Michigan
September 29, 1997
F-2
<PAGE> 6
AMERICAN INTERNATIONAL AIRWAYS, INC.
STATEMENTS OF CERTAIN ASSETS SOLD OF AIA
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996 AND 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
----------- ---------------------------
1997 1996 1995
(UNAUDITED)
<S> <C> <C> <C>
AIRCRAFT, AT COST $36,835,183 $36,715,178 $33,704,207
LESS ACCUMULATED DEPRECIATION 15,015,136 12,871,603 9,009,568
----------- ----------- -----------
NET BOOK VALUE OF ASSETS $21,820,047 $23,843,575 $24,694,639
=========== =========== ===========
</TABLE>
See accompanying notes.
F-3
<PAGE> 7
AMERICAN INTERNATIONAL AIRWAYS, INC.
STATEMENTS OF REVENUES AND DIRECT EXPENSES
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED) AND
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
--------------------------------- ---------------------------------
1997 1996 1996 1995
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Third-party customer revenue $ 13,387,085 $ 9,613,470 $ 20,311,118 $ 18,241,309
Related party revenue 7,351,273 9,005,627 18,158,957 6,849,286
-------------- -------------- -------------- --------------
Total revenues 20,738,358 18,619,097 38,470,075 25,090,595
DIRECT EXPENSES:
Depreciation 2,143,533 1,932,964 3,889,737 2,212,339
Insurance 668,307 669,019 1,326,124 974,463
Flight crew compensation and
travel related expenses 6,209,087 5,464,808 11,641,195 8,742,751
Maintenance 9,171,933 4,180,374 9,478,540 9,840,280
-------------- -------------- -------------- --------------
Total direct expenses 18,192,860 12,247,165 26,335,596 21,769,833
-------------- -------------- -------------- --------------
EXCESS OF REVENUES
OVER DIRECT EXPENSES $ 2,545,498 $ 6,371,932 $ 12,134,479 $ 3,320,762
============== ============== ============== ==============
</TABLE>
See accompanying notes.
F-4
<PAGE> 8
AMERICAN INTERNATIONAL AIRWAYS, INC.
NOTES TO STATEMENTS
- -------------------------------------------------------------------------------
1. PROPOSED MERGER AND SALE OF BOEING 727 AIRCRAFT
On September 22, 1997, American International Airways, Inc. and its 60%
owned partnership, American International Cargo ("AIC") (collectively,
"AIA"); Kalitta Flying Services, Inc. ("KFS"), O.K. Turbines, Inc.
("O.K."), American International Travel, Inc. ("AIT") and Flight One
Logistics, Inc. ("FOL") (collectively referred to as the "Companies"), the
sole stockholder of the Companies, and Kitty Hawk, Inc. ("Kitty Hawk")
entered into a merger agreement, under which each of the respective
Companies will be merged with separate subsidiaries of Kitty Hawk, with
each of the Companies surviving the merger as a direct, wholly owned
subsidiary of Kitty Hawk. On October 23, 1997, the merger agreement was
amended so that at the effective time of the merger, the outstanding
shares of capital stock of four Companies (AIA, AIT, FOL and O.K.) will be
converted into the right to receive their pro rata portion of 4,099,150
shares of Kitty Hawk common stock (unaudited). The outstanding shares of
capital stock of KFS will be converted into the right to receive
$20,000,000.
As an interim step toward the merger, on August 27, 1997, the Companies
entered into an agreement to sell to Kitty Hawk sixteen Boeing 727
aircraft constituting the majority of the Companies' Boeing 727 Fleet (the
"Boeing 727 Fleet") as set forth in an "Agreement for Sale and Purchase of
AIA 727 Fleet" (the "Purchase Agreement") dated July 31, 1997, for $51
million.
As a part of this transaction, which closed on September 17, 1997, the
Companies assigned to Kitty Hawk all of its customer contracts relating to
the aircraft. The purchase agreement provides the Companies the option to
repurchase, no later than March 31, 1998, all except three of the 727
aircraft from Kitty Hawk at Kitty Hawk's purchase price, less $14 million
for the three aircraft not subject to the option, plus any costs incurred
by Kitty Hawk to maintain the repurchased aircraft. Similarly, Kitty Hawk
has the option to require the Companies to repurchase, no later than
December 31, 1997, all except three of the 727 aircraft at Kitty Hawk's
purchase price less $14 million for the three aircraft not subject to the
option, plus any costs incurred by Kitty Hawk to maintain the repurchased
aircraft.
2. BASIS OF PRESENTATION
The accompanying statements of certain assets sold of AIA and the related
statements of revenues and direct expenses were prepared for the purpose
of complying with the Purchase Agreement and are not intended to be a
complete presentation of the financial position and results of operations
of AIA. Prior to the purchase, these assets were part of the larger AIA
aircraft fleet, were an integral part of AIA's operations and did not
constitute a legal or reporting entity for which financial statements were
prepared.
Revenues represent charges for aircraft usage billed to third party
customers under contracts and charges to American International Freight
("AIF"), a division of AIA, and AIC under lease arrangements. Contract and
lease arrangements require AIA to supply aircraft, crew, maintenance, and
insurance ("ACMI") and to meet certain on-time performance standards.
Customers, including AIF and AIC, are responsible for substantially all
other operating expenses, including fuel. These contracts have been
assigned to Kitty Hawk under the Purchase Agreement. Also, upon the
consummation of this transaction, Kitty Hawk will continue the leases of
the Boeing 727 Fleet to AIF and AIC to meet their scheduled freight
service requirements.
F-5
<PAGE> 9
Direct expenses include depreciation, insurance, flight crew compensation
and travel related expenses, and maintenance. Maintenance is comprised
primarily of labor, parts and supplies associated with the maintenance,
repair and overhaul of aircraft and engines and maintenance services
provided by others. Since a portion of maintenance expenses are
accumulated and accounted for in AIA's accounting system without regard to
the type of aircraft, these expenses have been allocated to the Boeing 727
Fleet based upon the percentage of the historical cost of the Boeing 727
Fleet to the historical cost of the Companies' total Fleet. Allocated
expenses amounted to $1.9 million, $2.4 million, $5.2 million and $5.4
million for the six months ended June 30, 1997 and 1996 (unaudited) and
for the years ended December 31, 1996 and 1995, respectively.
3. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The statements have been prepared on the accrual
basis of accounting.
INTERIM STATEMENTS - The statements of certain assets sold of AIA and the
related statements of revenues and direct expenses for the six months
ended June 30, 1997 and 1996 reflect all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of certain
assets sold of AIA and the related revenue and direct expenses for such
periods. The revenue and direct expenses for the six months ended June 30,
1997 are not necessarily indicative of the revenue and direct expenses for
the full year.
BOEING 727 AIRCRAFT are carried at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over an estimated
useful life of seven years.
REVENUE RECOGNITION - Revenue is recognized upon completion of a flight.
FOREIGN TRANSACTIONS - All significant monetary transactions of AIA are
denominated in U.S. currency.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
MAJOR CUSTOMERS - AIA had Boeing 727 Fleet sales to major customers
representing the following percentages:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
------------ ------------
1997 1996 1996 1995
(UNAUDITED)
<S> <C> <C> <C> <C>
Third-party customer 38% 24% 23% 34%
Third-party customer -- 17% 12% 14%
Third-party customer 14% -- -- --
Related party customer 26% 39% 38% 26%
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
At December 31, 1996, AIA was in violation of certain restrictive
covenants included in the credit agreements associated with the Boeing 727
fleet. In September 1997, AIA's lenders waived such non-compliance and
released the assets as collateral in order for this transaction to be
consummated.
F-6
<PAGE> 10
Currently, thirteen of the Boeing 727 aircraft do not comply with the
Federal Aviation Administration's Stage III noise control standards. AIA
has estimated that modification costs would be $24 million for the
aircraft to be in compliance with the Stage III noise control standards
which go into effect by January 1, 2000.
******
F-7
<PAGE> 11
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following sets forth Unaudited Pro Forma Financial Information of Kitty
Hawk, Inc. (the "Company") for the twelve months ended December 31, 1996 and
the six months ended June 30, 1997, in each case giving effect to the
Acquisition of the AIA 727 Fleet. The Company's Unaudited Pro Forma Statement
of Operations Information presents the Acquisition of the AIA 727 Fleet as if
it had been consummated at the beginning of 1996. The Company's Unaudited Pro
Forma Balance Sheet Information presents the Acquisition of the AIA 727 Fleet
as if it had been consummated on June 30, 1997.
The Unaudited Pro Forma Financial Information of the Company is presented
for illustrative purposes only and does not purport to present the financial
position or results of operation of the Company had the Acquisition of the AIA
727 Fleet occurred on the dates indicated, nor are they necessarily indicative
of the results of operations which may be expected to occur in the future. The
Unaudited Pro Forma Financial Information should be read in conjunction with
the separate historical financial statements of the Company included in its
Form 10-Q for the period ended June 30, 1997 and its Transition Report on Form
10-K/A for the transition period from September 1, 1996 to December 31, 1996
and the statements of assets and revenues and direct expenses of certain assets
sold of AIA appearing elsewhere in this Form 8- K.
The historical balance sheet information of the Company has been derived
from the unaudited June 30, 1997 balance sheet included in its Form 10-Q for
the period ended June 30, 1997. The balance sheet information for the AIA 727
Fleet has been derived from the unaudited statements of assets of certain
assets sold of AIA as of June 30, 1997 included elsewhere in this Form 8-K. The
historical statement of operations data for the Company for the twelve months
ended December 31, 1996 has been derived from unaudited information presented
in Footnote 10 to the Company's audited financial statements included in its
Transition Report on Form 10-K/A for the transition period from September 1,
1996 to December 31, 1996. The historical statement of operations data for the
Company for the six months ended June 30, 1997 has been derived from the
unaudited statement of operations included in its Form 10-Q for the period
ended June 30, 1997. The statement of operations data for the AIA 727 Fleet for
the twelve months ended December 31, 1996 has been derived from the audited
statements of revenues and direct expenses of certain assets sold of AIA
appearing elsewhere in this Form 8-K. The statement of operations data for the
AIA 727 Fleet for the six months ended June 30, 1997 has been derived from the
unaudited statement of revenues and direct expenses of certain assets sold of
AIA appearing elsewhere in this Form 8-K.
The pro forma adjustments relating to the acquisition of the AIA 727 Fleet
represent the Company's preliminary determination of these adjustments and are
based upon available information and certain assumptions the Company considers
reasonable under the circumstances. Final amounts could differ from those set
forth therein and those differences could be material. The unaudited interim
financial statements of the Company and the AIA 727 Fleet referred to above
include, in the opinion of management of the Company and of AIA, all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results of the Company and of the AIA 727 Fleet for
the unaudited interim period.
F-8
<PAGE> 12
UNAUDITED PRO FORMA FINANCIAL INFORMATION
BALANCE SHEET
June 30, 1997
<TABLE>
<CAPTION>
Historical
------------------------------ Pro Forma
AIA 727 -----------------------------
Kitty Hawk Fleet Adjustments Combined
---------- -------- ----------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 8,952 $ (5,260) 2a $ 3,692
Trade accounts receivable 15,122 15,122
Inventory and aircraft supplies 4,435 4,435
Prepaid expenses and other current assets 5,366 5,366
--------- -------- ---------
Total current assets 33,875 (5,260) 28,615
Property and equipment, net 83,483 $ 21,820 33,364 2b,c,e 138,667
--------- -------- -------- ---------
Total assets $ 117,358 $ 21,820 $ 28,104 $ 167,282
========= ======== ======== =========
Current Liabilities:
Accounts payable and accrued expenses $ 18,513 $ 3,003 2c $ 21,516
Current maturities of long-term debt 4,774 4,774
--------- -------- ---------
Total current liabilities 23,287 3,003 26,290
Long-term debt 29,277 45,900 2d 75,177
Deferred income taxes 2,545 1,021 2e 3,566
Stockholders' equity, net 62,249 62,249
--------- -------- ---------
Total liabilities and stockholders' equity $ 117,358 $ 49,924 $ 167,282
========= ======== =========
</TABLE>
See accompanying notes.
F-9
<PAGE> 13
UNAUDITED PRO FORMA FINANCIAL INFORMATION
STATEMENT OF OPERATIONS
Twelve months ended December 31, 1996
<TABLE>
<CAPTION>
Historical
------------------------------ Pro Forma
AIA 727 -----------------------------
Kitty Hawk Fleet Adjustments Combined
---------- -------- ----------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues:
Air freight carrier $ 55,504 $ 38,470 $ 93,974
Air logistics 77,168 77,168
---------- -------- ---------
Total revenues 132,672 38,470 171,142
Costs of Revenues:
Air freight carrier 40,860 26,336 $ 2,065 1a 69,261
Air logistics 67,938 67,938
---------- -------- ----------- ---------
Total costs of revenues 108,798 26,336 2,065 137,199
Gross profit 23,874 $ 12,134 (2,065) 33,943
========
General and administrative expenses 8,943 75 1b 9,018
Non-qualified employee profit sharing 1,243 1,243
Stock option grants to executives 4,231 4,231
---------- ----------- ---------
Total operating expenses 14,417 75 14,492
Operating income 9,457 (2,140) 19,451
Other Income (Expense):
Interest expense, net (2,062) (3,902) 1c (5,964)
Other, net 291 291
---------- ----------- ---------
Income before income taxes 7,686 (6,042) 13,778
Income taxes 3,038 2,408 1d 5,446
---------- ----------- ---------
Net income $ 4,648 $ (8,450) $ 8,332
========== =========== =========
Net income per share $ 0.55 $ 0.98
========== =========
Weighted average common and common
equivalent shares outstanding 8,477 8,477
========== =========
</TABLE>
See accompanying notes.
F-10
<PAGE> 14
UNAUDITED PRO FORMA FINANCIAL INFORMATION
STATEMENT OF OPERATIONS
Six Months ended June 30 , 1997
<TABLE>
<CAPTION>
Historical
------------------------------ Pro Forma
AIA 727 -----------------------------
Kitty Hawk Fleet Adjustments Combined
---------- -------- ----------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues:
Air freight carrier $ 33,237 $ 20,738 $ 53,975
Air logistics 27,232 27,232
-------- -------- --------
Total revenues 60,469 20,738 81,207
Costs of Revenues:
Air freight carrier 22,844 18,193 $ (1,385) 1a 39,652
Air logistics 24,819 24,819
-------- -------- -------- --------
Total costs of revenues 47,663 18,193 (1,385) 64,471
Gross profit 12,806 $ 2,545 1,385 16,736
========
General and administrative expenses 4,884 38 1b 4,922
Non-qualified employee profit sharing 672 672
-------- -------- --------
Total operating expenses 5,556 38 5,594
Operating income 7,250 1,347 11,142
Other Income (Expense):
Interest expense, net (1,049) (1,951) 1c (3,000)
Other, net 424 424
-------- -------- --------
Income before income taxes 6,625 (604) 8,566
Income taxes 2,650 776 1d 3,426
-------- -------- --------
Net income $ 3,975 $ (1,380) $ 5,140
======== ======== ========
Net income per share $ 0.38 $ 0.49
======== ========
Weighted average common and common
equivalent shares outstanding 10,452 10,452
======== ========
</TABLE>
See accompanying notes.
F-11
<PAGE> 15
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(Dollars in thousands)
1. Pro Forma Statement of Operations - The Company's Pro Forma Statement of
Operations data for the twelve months ended December 31, 1996 and the six
months ended June 30, 1997 includes the following adjustments:
<TABLE>
<CAPTION>
Twelve months
ended Six months
December 31, ended June 30,
1996 1997
--------------- --------------
<S> <C> <C>
a. Costs of revenues
o Increasing depreciation expense from the
step-up in fair value of acquired aircraft
and adjusting the useful lives of the
acquired aircraft to 10 years $ 1,628 $ 615
o Conform AIA's aircraft maintenance
accounting policy to that of Kitty Hawk 437 (2,000)
------- --------
2,065 (1,385)
b. Additional general and administrative
personnel 75 38
c. Increase interest expense 3,902 1,951
d. Tax expense:
o Adjustment to reflect income tax expense
on the gross profit of the AIA 727 Fleet at
Kitty Hawk's historical effective rate 4,804 1,018
o Adjustment to reflect income tax benefit
on the pro forma adjustments at Kitty
Hawk's historical effective rate (2,396) (242)
------- --------
2,408 776
------- --------
$ 8,450 $ 1,380
======= ========
</TABLE>
No income tax expense has been reflected on the AIA 727 Fleet statement of
operations data as AIA filed income taxes under Subchapter S of the U.S.
Federal Income Tax Code.
Interest expense on the long-term debt assumes an interest rate of 8.5%.
F-12
<PAGE> 16
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (continued)
2. Pro Forma Balance Sheet - The Company's Pro Forma Balance Sheet data as of
June 30, 1997 includes the following adjustments:
<TABLE>
<CAPTION>
As of June 30,
1997
--------------
<S> <C>
a. Cash payment to AIA and related acquisition expenses $ (5,260)
b. Record AIA 727 Fleet at fair value, less carrying value of
assets acquired 29,340
c. Adjusting accrued maintenance to conform AIA's accounting
policy to that of Kitty Hawk 3,003
d. Record long-term debt 45,900
e. Record deferred taxes related to accrued maintenance 1,021
</TABLE>
Effective with the acquisition of the AIA 727 Fleet, the Company borrowed
$45,900 to finance the purchase of the AIA 727 Fleet. The note bears
interest at the applicable rate under the agreement, plus 1.0% from January
1 through December 31, 1999, and 1.5% beginning January 1, 2000 and matures
on June 30, 2001. Interest only is payable through March 31, 1998. The loan
begins to amortize on June 30, 1998 with equal quarterly installments of
principal and interest until maturity.
F-13
<PAGE> 17
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
2.1 Agreement for Sale and Purchase of AIA 727 Fleet, dated as of
July 31, 1997, by and among, AIA, the Company, Kalitta Flying
Service, Inc., Conrad Kalitta and Kitty Hawk Aircargo, Inc.(1)
23.1 Consent of Deloitte & Touche, LLP.(2)
- -----------
(1) Previously filed.
(2) Filed herewith.
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the
Agreement for Sale and Purchase of the AIA 727 Fleet have been omitted. The
Company hereby agrees to furnish such schedules and exhibits upon request of
the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 23.1
To the Board of Directors and Stockholder of
American International Airways, Inc. and Related Companies
Ypsilanti, Michigan
We consent to the incorporation by reference in Registration
Statements 333-15667, 333-28553 and 333-23597 of Kitty Hawk, Inc. on Forms
S-8, pertaining to the Kitty Hawk, Inc. Amended and Restated Annual Incentive
Compensation Plan, Kitty Hawk, Inc. Amended and Restated Employee Stock
Purchase Plan and Kitty Hawk, Inc. Amended and Restated Omnibus Securities
Plan, respectively, of our report dated September 29, 1997, with respect
to the statements of certain assets sold of AIA for the years ended
December 31, 1996 and 1995, and the related statements of revenues and
direct expenses for the years then ended, appearing in the Current Report -
Form 8-KA of Kitty Hawk, Inc. dated November 6, 1997.
/s/ Deloitte & Touche LLP
Ann Arbor, Michigan
November 6, 1997
