ABX Air, Inc., (NASDAQ:ABXA) today filed a Form 12b-25 notification with the Securities and Exchange Commission indicating that it cannot timely file its financial results for the third quarter and nine months ended September 30, 2007, because it is evaluating the appropriateness and adequacy of its accounting and disclosures in light of the failure of DHL Express (USA), Inc. (“DHL”) to pay ABX Air for services performed under its two commercial agreements with DHL, as more specifically described in the Company’s Form 8-K, dated November 9, 2007.
ABX Air announced earlier today that DHL has defaulted under terms of the ACMI Service Agreement and the Hub and Line-Haul Services Agreement, which govern the business relationship between the companies. ABX Air said DHL withheld payments to ABX Air otherwise due for reimbursement of legitimate business expenses under the agreements. DHL has indicated that the withheld amounts relate to portions of certain overhead expenses ABX Air incurred during the second and third quarters of 2007.
Joe Hete, president and CEO of ABX Air, said “We did not expect DHL to take this action this week, so we require additional time to confer with our advisors and update disclosures to reflect the effect of this action on our financial results for the third quarter and nine months ended September 30. We expect to complete that review and report our results for those periods as soon as possible next week, to be followed by an investor conference call.”
In addition, ABX Air stated in its news release and Form 8-K earlier today 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.
Hete said, in response to investor questions on this topic, that, “To the extent DHL’s default under the commercial agreements resulted in technical default under certain covenants of our credit facilities, ABX Air has obtained waivers from those covenants that have continued our access to all existing credit commitments. ”
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.
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.