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ABX AIR ISSUES DEFAULT NOTICE TO DHL
WILMINGTON, OH - Nov. 9, 2007 - ABX
Air (NASDAQ:ABXA) today said it has notified its principal customer,
DHL, that it considers DHL in default under terms of the two principal
commercial agreements between the companies, and that ABX Air is reviewing
its options while continuing to maintain full service to DHL and its
customers.
ABX Air said in a Form 8-K filing with the Securities and Exchange
Commission today that DHL has withheld payments to ABX Air otherwise due
for reimbursement of legitimate expenses under the ACMI Service Agreement
and the Hub and Line-Haul Services Agreement, which govern the business
relationship between the companies.
The dispute centers on a claim by DHL that certain ABX Air expenses are no
longer eligible for reimbursement in full by DHL under the agreements,
because ABX Air’s revenues from other customers have exceeded a 10%
threshold of ABX Air’s total revenues. ABX Air’s position is that DHL has
improperly excluded from its calculation certain ABX Air revenues that
stem from reimbursements for fuel expenses that ABX Air incurred on behalf
of DHL. When such fuel-related revenues are properly included in the
calculation, ABX Air’s revenues from other customers have not exceeded the
10% threshold in the agreement. In addition, DHL is claiming that ABX
Air’s costs in maintaining its public company status and certain
professional fees incurred by ABX with respect to an unsolicited
indication of interest from ASTAR Air Cargo are not recoverable under the
agreements.
Joe Hete, president and CEO of ABX Air, said, "As the events described in
our 8-K filing indicate, our decision to declare DHL in default of our
ACMI and Hub Services commercial agreements was taken only after intensive
efforts on our part to resolve this issue directly with DHL, or to
continue normal operations under explicit language in the agreements for
working together while disputed matters are resolved through arbitration.
Unfortunately, DHL has chosen a course that leaves us with no alternative,
as a public company, other than to inform our shareholders of the steps we
are obliged to take to defend their interests.
"At the same time, I want to reaffirm that ABX Air is today, and intends
to remain, DHL’s principal U.S. business partner. As we pursue a solution
to this matter under terms of the agreements, we intend to continue to
provide DHL and its customers with dedicated, efficient, and high-quality
air and ground logistics services, subject to the terms of our commercial
agreements.
"We are aware of the disclosures yesterday by the management of DHL’s
parent company, Deutsche Post World Net, that growth in DHL’s U.S. network
has slowed considerably in recent months, and that DHL’s U.S. operations
are "the critical issue" for that company. While we are eager to support
DHL in its efforts to build market share, growth, and profitability in the
U.S., that process cannot be furthered at the expense of the shareholders
of ABX Air."
ABX Air also stated that the refusal of DHL to pay the amounts due to ABX
Air under the agreements may cause it to be in default under certain of
its credit facilities. Should this be the case, ABX Air will consider
whether to seek reimbursement from DHL for any damages or liabilities ABX
Air may incur as a result of any such default.
ABX Air said its alternatives include, but are not limited to, pursuing
the dispute resolution process set forth in the agreements, negotiating
with DHL to resolve the disputed issues, or any other option available to
ABX Air at law or in equity.
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About ABX Air
ABX Air (www.abxair.com)
is an air cargo services provider operating out of Wilmington, Ohio,
and 15 hubs throughout the United States. In addition to providing
airlift capacity and sort facility staffing to DHL, ABX Air is a
Part 121 operator and holds a Part 145 FAA Repair certificate. It
provides charter, maintenance and package handling services to a
diverse group of customers. ABX Air is the largest employer in a
several-county area in southwestern Ohio.
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Except for historical information
contained herein, the matters discussed in this release contain
forward-looking statements that involve risks and uncertainties. ABX
Air, Inc.'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 the Company's actual results to
differ materially from those indicated by such forward-looking
statements. These factors include, but are not limited to,
uncertainty as to the outcome of the commercial disputes with DHL,
uncertainty as to the impact that these disputes may have on our
financing arrangements, 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
and Quarterly Reports on Form 10-Q. Readers should carefully review
this release and should not place undue reliance on the Company'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.
For more information, contact:
Quint Turner
ABX Air, Inc.
(937) 382-5591
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