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Horizon Lines Reports Third-Quarter Financial Results

Volume Improves 3.4% and Rate, Net of Fuel, Rises 2.9% from a Year Ago

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CHARLOTTE, N.C., Oct. 29, 2012 /PRNewswire/ -- Horizon Lines, Inc. (OTCQB: HRZL) today reported financial results for the fiscal third quarter ended September 23, 2012.

Financial results are presented on a continuing operations basis, excluding the previously discontinued trans-Pacific FSX service and logistics operations.

Comparison of GAAP and Non-GAAP Results from Continuing Operations

Quarter Ended

(in millions, except per share data)*

9/23/2012


9/25/2011





GAAP:




Operating revenue

$279.6


$267.6

Net income (loss)

$1.4


$(111.7)

Net income (loss) per diluted share 

$0.02


$(90.36)





Non-GAAP:*




EBITDA

$26.4


$(85.3)

Adjusted EBITDA

$27.0


$33.0

Adjusted net income

$2.3


$6.1

Adjusted net income per diluted share

$0.03


$4.93

* See attached schedules for reconciliation of third-quarter 2012 and 2011 reported GAAP results to Non-GAAP results.  Per-share amounts reflect the weighted average of 90.7 million fully diluted shares outstanding for the 2012 third quarter, compared with 1.2 million shares for the 2011 period.

"Horizon Lines generated a 3.4% improvement in container volume and a 2.9% increase in container revenue, net of fuel surcharges, for the third quarter, relative to the same period a year ago," said Sam Woodward, President and Chief Executive Officer. "Volume increases in Hawaii and Alaska offset volume weakness in Puerto Rico. However, third-quarter adjusted EBITDA of $27.0 million declined by $6.0 million from a year ago, largely due to $4.6 million of incremental transit and crew costs associated with dry-docking three Puerto Rico vessels in China. We are doing this to facilitate extensive maintenance and high-quality enhancements in the most cost-efficient manner possible in order to improve vessel reliability and service integrity in Puerto Rico.

"Excluding these incremental dry-dock transit and crew costs, the remaining adjusted EBITDA shortfall of $1.4 million reflects a decline in non-transportation revenue, as well as increased maintenance, terminal operations, vessel operating and overhead costs, primarily due to contractual rate increases, port security fees and higher container volumes," Mr. Woodward said. "These negative variances were partially offset by increased volume, associated improved fuel-cost recovery and modest container rate improvements."    

Reviewing each trade lane, Alaska's seasonally strong summer business benefited from increased northbound automobile shipments and southbound seafood volume. Hawaii's positive volume trend continued during the quarter, driven in part by stronger tourism. Puerto Rico revenue container loads contracted on lower volume. Reduced shipments in Puerto Rico were partially offset by stabilizing container rates and increased refrigerated cargo volume relative to a year ago.

Third-Quarter 2012 Financial Highlights      

  • Volume, Rate & Fuel Cost – Container volume for the 2012 third quarter totaled 61,514 revenue loads, up 3.4% from 59,518 loads for the same period a year ago. Unit revenue per container totaled $4,245 in the 2012 third quarter, compared with $4,171 in 2011.  Unit revenue per container, net of fuel surcharges, was $3,218, up 2.9% from $3,127 a year ago.  Vessel fuel costs averaged $649 per metric ton in the third quarter, down 1.4% from the average price of $658 per ton for the same quarter in 2011.
  • Operating Revenue – Third-quarter operating revenue from continuing operations increased 4.5% to $279.6 million from $267.6 million a year ago.  The factors driving the $12.0 million revenue improvement were: a $6.3 million gain in volume; a $5.6 million increase from higher container revenue rates; and a $0.7 million rise from fuel surcharges. These increases were partially offset by a $0.6 million decline in non-transportation services revenue.  
  • Operating Income – GAAP operating income from continuing operations for the 2012 third quarter totaled $13.2 million, compared with an operating loss of $99.7 million a year ago. GAAP operating income for the 2012 third quarter includes costs of $0.5 million for antitrust-related legal expenses, severance and refinancing costs. The GAAP operating loss for the 2011 third quarter includes a $117.5 million goodwill impairment charge and $0.8 million for antitrust-related legal expenses and employee severance (see reconciliation tables for specific line-item amounts).  Adjusting for these items, third-quarter 2012 adjusted operating income totaled $13.7 million, compared with $18.6 million a year ago.
  • EBITDA – EBITDA from continuing operations totaled $26.4 million for the 2012 third quarter, compared with a negative $85.3 million for the same period a year ago.  Adjusted EBITDA from continuing operations for the third quarter of 2012 was $27.0 million, compared with $33.0 million for 2011. EBITDA and adjusted EBITDA for the 2012 and 2011 third quarters were impacted by the same factors affecting operating income. Additionally, 2012 adjusted EBITDA excludes a $0.3 million gain on marking the conversion feature in the company's convertible debt to fair value, as well as a $0.4 million loss on the conversion of debt to equity (see reconciliation tables for specific line item amounts).
  • Net Income – On a GAAP basis, third-quarter net income from continuing operations totaled $1.4 million, or $0.02 per diluted share on a weighted average of 90.7 million fully diluted shares outstanding. This compares with a 2011 third-quarter net loss from continuing operations of $111.7 million, or $90.36­­ per share on 1.2 million weighted average shares outstanding. On an adjusted basis, 2012 third-quarter net income from continuing operations totaled $2.3 million, or $0.03 per fully diluted share, compared with net income of $6.1 million, or $4.93 per fully diluted share, a year ago.  Adjusted net income for the 2012 and 2011 third quarters reflects the same items impacting adjusted EBITDA in each period. Additionally, adjusted net income for both periods excludes the non-cash accretion of antitrust-related legal settlements and includes the tax impact of the adjustments (see reconciliation tables for specific line item amounts).  
  • Nine-Month Results – For the fiscal 2012 nine-month period, operating revenue from continuing operations increased 6.8% to $813.9 million from $762.1 million for the same period in 2011. EBITDA from continuing operations totaled $31.4 million, compared with negative $47.3 million a year ago. Nine-month 2012 adjusted EBITDA totaled $53.0 million, compared with $63.2 million for the same period in 2011.  Net incremental costs for the 2012 period, including transit and crew costs associated with vessels being dry-docked in China, negatively impacted 2012 nine-month adjusted EBITDA by approximately $10.3 million. Nine-month adjusted EBITDA for 2012 excludes net costs totaling $21.6 million, comprised of $3.2 million for severance, antitrust-related legal expenses and equipment impairment, as well as an $18.4 million primarily non-cash net loss that reflects a $37.8 million loss on the conversion of debt to equity, partially offset by a $19.4 million gain from marking the conversion feature in the company's convertible debt to fair value. Adjusted EBITDA for the 2011 nine-month period excludes $120.3 million in goodwill and equipment impairment charges, an $18.2 million expense reversal related to net legal settlement reductions, and charges of $8.4 million for antitrust-related legal expenses, severance and refinancing costs (see reconciliation tables for specific line-item amounts).  The net loss from continuing operations for the 2012 nine-month period totaled $56.5 million, or $2.98 per share on 18.9 million weighted average shares outstanding, compared with a net loss from continuing operations of $127.4 million, or $103.24 per share on 1.2 million weighted average shares outstanding, for the prior year.  The adjusted net loss from continuing operations for the 2012 nine-month period totaled $33.5 million, or $1.77 per share, compared with an adjusted net loss from continuing operations of $17.3 million, or $13.99 per share, for the comparable year-ago period.
  • Shares Outstanding – The company had a weighted daily average of 33.6 million basic and 90.7 million fully diluted shares outstanding for the third quarter of 2012, and 18.9 million basic and fully diluted shares for the first nine months of the year.  This compares with a weighted average of 1.2 million basic and fully diluted shares outstanding for corresponding periods a year ago. Shares outstanding reflect the previously disclosed financial restructuring and 1-for-25 reverse stock split in the fourth quarter of 2011, a mandatory debt-for-equity exchange in the first quarter of 2012, and a further financial restructuring in the second quarter of 2012.  At October 24, 2012, the equivalent of 91.8 million fully diluted shares of the company's stock were outstanding, consisting of 34.4 million shares of common stock and warrants convertible into 57.4 million shares of common stock.  
  • Liquidity, Credit Facility Compliance & Debt Structure – Based on accounts receivable outstanding as of September 23, 2012, the company had total liquidity of $46.3 million, consisting of $18.9 million of asset-based loan ("ABL") borrowing availability and $27.4 million in cash. Outstanding debt totaled $432.9 million, consisting of: $223.9 million of 11.00% first-lien senior secured notes due October 15, 2016; $157.8 million of second-lien senior secured notes due October 15, 2016, bearing interest at 15.00%, being paid in kind with additional second-lien secured notes; and $42.5 million drawn on the ABL facility, bearing interest at a weighted average of 4.18%.  Also remaining outstanding were $2.7 million of 6.00% convertible secured notes due April 15, 2017, and a $6.0 million capital lease.  The company's weighted average interest rate for funded debt was 11.8%. Availability under the ABL facility is based on a percentage of eligible accounts receivable and customary reserves, with a maximum of $100.0 million.  Letters of credit issued against the ABL facility totaled $17.1 million at September 23, 2012. 

Please see attached schedules for the reconciliation of third-quarter and nine-month 2012 and 2011 reported GAAP results and Non-GAAP adjusted results.

Outlook

For the full fiscal year, container volumes are projected to increase slightly from 2011 levels, due to modestly improving economic conditions and consumer sentiment in certain of the company's markets.  Container rates, net of fuel surcharges, are expected to rise slightly, mitigating much of the contractual rate increases the company is incurring this year from its vessel union partners, transportation service providers and for other marine services.  During 2011, many of the company's union partners and transportation service providers reduced or maintained rate levels to assist the company in its cost-savings initiatives, which included a reduction in non-union workforce.

Fuel prices are projected to remain at historically high levels, averaging $700 per ton in the fourth quarter and $690-$695 per ton for the full year.

The company expects cash flow from operations and available cash will be adequate to meet liquidity needs over the next 12 months, and projects total liquidity to approximate $40 million at the end of the current fiscal year.    

Use of Non-GAAP Measures

Horizon Lines reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The company also believes that the presentation of certain non-GAAP measures, i.e., EBITDA and results excluding certain costs and expenses, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance without the impact of significant special items. The company further feels these non-GAAP measures enhance the user's overall understanding of the company's current financial performance relative to past performance and provide a better baseline for modeling future earnings expectations. Non-GAAP measures are reconciled in the financial tables accompanying this news release. The company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the company's reported GAAP results. 

About Horizon Lines

Horizon Lines, Inc. is one of the nation's leading domestic ocean shipping companies and the only ocean cargo carrier serving all three noncontiguous domestic markets of Alaska, Hawaii and Puerto Rico from the continental United States.  The company maintains a fleet of 15 fully Jones Act qualified vessels and operates five port terminals in Alaska, Hawaii and Puerto Rico.  A trusted partner for many of the nation's leading retailers, manufacturers and U.S. government agencies, Horizon Lines provides reliable transportation services that leverage its unique combination of ocean transportation and inland distribution capabilities to deliver goods that are vital to the prosperity of the markets it serves. The company is based in Charlotte, NC, and its stock trades on the over-the-counter market under the symbol HRZL.

Forward Looking Statements

The information contained in this press release should be read in conjunction with our filings made with the Securities and Exchange Commission.  This press release contains "forward-looking statements" within the meaning of the federal securities laws.  Forward-looking statements are those that do not relate solely to historical fact.  They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events.  Words such as, but not limited to, "believe," "anticipate," "plan," "targets," "projects," "will," "expect," "would," "could," "should," "may," and similar expressions or phrases identify forward-looking statements.

Factors that may cause expected results or anticipated events or circumstances discussed in this press release to not occur or to differ from expected results include: volatility in fuel prices; decreases in shipping volumes; our ability to maintain adequate liquidity to operate our business; our ability to make interest payments on our outstanding indebtedness; work stoppages, strikes and other adverse union actions; the reaction of our customers and business partners to our announcements and filings, including those referred to herein; government investigations and legal proceedings; suspension or debarment by the federal government; compliance with safety and environmental protection and other governmental requirements; failure to comply with the terms of our probation; increased inspection procedures and tighter import and export controls; repeal or substantial amendment of the coastwise laws of the United States, also known as the Jones Act;  catastrophic losses and other liabilities; the successful start-up of any Jones-Act competitor; failure to comply with the various ownership, citizenship, crewing, and U.S. build requirements dictated by the Jones Act; the arrest of our vessels by maritime claimants; severe weather and natural disasters; and the aging of our vessels and unexpected substantial dry-docking or repair costs for our vessels.

All forward-looking statements involve risk and uncertainties. In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this press release might not occur. The forward-looking statements included in the press release are made only as of the date they are made and the company undertakes no obligation to update any such statements, except as otherwise required by applicable law. See the section entitled "Risk Factors" in our 2011 Form 10-K filed with the SEC on April 10, 2012, for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences.  

 

Horizon Lines, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except per share data)














September 23,


December 25,


2012


2011

Assets




Current assets




Cash

$27,355


$21,147

Accounts receivable, net of allowance of $3,473 and $6,416 at




September 23, 2012 and December 25, 2011, respectively

115,874


105,949

Materials and supplies

27,860


28,091

Deferred tax asset

4,685


10,608

Assets of discontinued operations

7,159


12,975

Other current assets

8,097


7,196





Total current assets

191,030


185,966

Property and equipment, net

159,391


167,145

Goodwill

198,793


198,793

Intangible assets, net

51,448


69,942

Other long-term assets

19,845


17,963





Total assets

$620,507


$639,809





Liabilities and Stockholders' Equity (Deficiency)




Current liabilities




Accounts payable

$44,619


$31,683

Current portion of long-term debt, including capital lease

3,277


6,107

Accrued vessel rent

7,090


13,652

Current liabilities of discontinued operations

2,917


45,313

Other accrued liabilities

90,111


97,097





Total current liabilities

148,014


193,852

Long-term debt, including capital lease, net of current portion

429,395


509,741

Deferred rent

10,199


13,553

Deferred tax liability

4,609


10,702

Liabilities of discontinued operations

772


51,293

Other long-term liabilities

24,490


26,654





Total liabilities

617,479


805,795





Stockholders' equity (deficiency)




Preferred stock, $.01 par value, 30,500 shares authorized; no shares 




    issued or outstanding

-


-

Common stock, $.01 par value, 100,000 shares authorized, 34,168




shares issued and outstanding as of September 23, 2012 and 




2,421 shares issued and 2,269 shares outstanding as of




December 25, 2011

952


605

Treasury stock, 152 shares at cost as of December 25, 2011

-


(78,538)

Additional paid in capital

380,328


213,135

Accumulated deficit

(379,983)


(303,260)

Accumulated other comprehensive income

1,731


2,072





Total stockholders' equity (deficiency)

3,028


(165,986)





Total liabilities and stockholders' equity (deficiency)

$620,507


$639,809

 

 

 

Horizon Lines, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)










Quarter Ended


Nine Months Ended


September 23,


September 25,


September 23,


September 25,


2012


2011


2012


2011









Operating revenue

$279,604


$267,629


$813,898


$762,080

Operating expense:








Vessel

83,850


77,814


264,718


231,547

Marine

53,832


47,570


156,176


143,073

Inland

46,902


45,664


140,228


132,599

Land

38,069


35,422


111,557


106,196

Rolling stock rent

10,875


10,306


31,542


30,400

Cost of services (excluding depreciation expense)

233,528


216,776


704,221


643,815

Depreciation and amortization

9,319


10,533


30,116


32,357

Amortization of vessel dry-docking

3,954


3,732


10,589


11,871

Selling, general and administrative

19,447


19,017


60,492


62,721

Goodwill impairment

-


117,506


-


117,506

Impairment charge

-


-


257


2,818

Legal settlements

-


-


-


(18,202)

Miscellaneous expense (income), net

134


(268)


51


130









Total operating expense

266,382


367,296


805,726


853,016









Operating income (loss) 

13,222


(99,667)


8,172


(90,936)

Other expense:








Interest expense, net

13,808


13,418


49,036


37,044

Loss on conversion/modification of debt

368


30


36,789


633

Gain on change in value of debt conversion features

(255)


-


(19,385)


-

Other expense (income), net

8


(91)


32


(70)









Loss from continuing operations before income tax benefit

(707)


(113,024)


(58,300)


(128,543)

Income tax benefit

(2,150)


(1,339)


(1,805)


(1,143)









Net income (loss) from continuing operations

1,443


(111,685)


(56,495)


(127,400)

Net income (loss) from discontinued operations

414


(14,682)


(20,228)


(38,454)









Net income (loss)

$1,857


$(126,367)


$(76,723)


$(165,854)









Basic net income (loss) per share:








Continuing operations

$0.05


$(90.36)


$(2.98)


$(103.24)

Discontinued operations

0.01


(11.88)


(1.07)


(31.16)

Basic net income (loss) per share

$0.06


$(102.24)


$(4.05)


$(134.40)









Diluted net income (loss) per share:








Continuing operations

$0.02


$(90.36)


$(2.98)


$(103.24)

Discontinued operations

0.00


(11.88)


(1.07)


(31.16)

Diluted net income (loss) per share

$0.02


$(102.24)


$(4.05)


$(134.40)









Number of weighted average shares used in calculation:








Basic

33,642


1,236


18,943


1,234

Diluted

90,745


1,236


18,943


1,234

 

Horizon Lines, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)






Nine Months Ended


September 23,


September 25,


2012


2011





Cash flows from operating activities:




Net loss from continuing operations

$(56,495)


$(127,400)

Adjustments to reconcile net loss to net cash used in operating activities:




Depreciation

16,015


17,118

Amortization of other intangible assets

14,101


15,239

Amortization of vessel dry-docking

10,589


11,871

Amortization of deferred financing costs

1,977


3,167

Goodwill impairment

-


117,506

Gain on change in value of conversion features

(19,385)


-

Impairment charge

257


2,818

Legal settlements

-


(18,202)

Loss on conversion/modification of debt

36,789


633

Deferred income taxes

(170)


1,244

Gain on equipment disposals

(170)


(814)

Stock-based compensation

1,274


582

Payment-in-kind interest expense

14,946


-

Accretion of interest on convertible notes

3,963


8,732

Accretion of interest on legal settlements

1,543


547

Changes in operating assets and liabilities:




Accounts receivable

(9,988)


(19,139)

Materials and supplies

153


94

Other current assets

(902)


(501)

Accounts payable

12,937


(7,181)

Accrued liabilities

8,515


(10,120)

Vessel rent

(9,918)


1,623

Vessel dry-docking payments

(14,578)


(8,038)

Accrued legal settlements

(5,500)


(2,768)

Other assets/liabilities

128


(869)





Net cash provided by (used in) operating activities from continuing operations

6,081


(13,858)

Net cash used in operating activities from discontinued operations

(23,875)


(38,736)





Cash flows from investing activities:




Purchases of property and equipment

(9,511)


(9,527)

Proceeds from the sale of property and equipment

1,407


2,111





Net cash used in investing activities from continuing operations

(8,104)


(7,416)

Net cash used in investing activities from discontinued operations

-


(544)





Cash flows from financing activities:




Borrowing under ABL facility

42,500


-

Borrowing under revolving credit facility

-


104,500

Borrowing under bridge loan

-


14,657

Payments on revolving credit facility

-


(14,500)

Payments on long-term debt

(3,359)


(14,063)

Payments of financing costs

(5,679)


(17,934)

Payments on capital lease obligations

(1,356)


(1,201)





Net cash provided by financing activities

32,106


71,459





Net increase in cash from continuing operations

30,083


50,185

Net decrease in cash from discontinued operations

(23,875)


(39,280)

Net increase in cash

6,208


10,905

Cash at beginning of period

21,147


2,751





Cash at end of period

$27,355


$13,656





Supplemental disclosure of non-cash financing activity:




Second lien notes issued to SFL

$40,000


$ -

Conversion of debt to equity

$283,278


$ -

Notes issued as payment-in-kind

$15,730


$ -

 


 

Horizon Lines, Inc.

Adjusted Operating Income Reconciliation

(in thousands)










 Quarter Ended September 23, 2012 


Quarter Ended   September 25, 2011 


Nine Months Ended September 23, 2012 


 Nine Months Ended September 25, 2011 

Operating Income (Loss) 

$13,222


$(99,667)


$8,172


$(90,936)









Adjustments:








Antitrust Legal Expenses

234


678


1,418


3,805

Union/Other Severance

234


101


1,513


3,047

Refinancing Costs

23


-


972


905

Goodwill Impairment

-


117,506


-


117,506

Impairment Charge

-


-


257


2,818

Legal Settlements

-


-


-


(18,202)

Total Adjustments

491


118,285


4,160


109,879









Adjusted Operating  Income

$13,713


$18,618


$12,332


$18,943

 









Horizon Lines, Inc.

Adjusted Net Income (Loss) Reconciliation

(in thousands)










Quarter Ended

September 23, 2012 


Quarter
Ended September 25, 2011 


Nine Months Ended September 23, 2012 


 Nine Months Ended September 25, 2011 

Net Income (Loss) 

$1,857


$(126,367)


$(76,723)


$(165,854)

Net Income (Loss) from  Discontinued Operations

414


(14,682)


(20,228)


(38,454)

Net Income (Loss) Income from Continuing Operations

1,443


(111,685)


(56,495)


(127,400)









Adjustments:








Accretion of Legal Settlements

421


263


1,543


547

Loss on Conversion/Modification of Debt/Other Refinancing Costs

391


30


37,761


1,538

Antitrust Legal Expenses

234


678


1,418


3,805

Union/Other Severance

234


101


1,513


3,047

Gain on Change in Value of Debt Conversion Features

(255)


-


(19,385)


-

Goodwill Impairment

-


117,506


-


117,506

Impairment Charge

-


-


257


2,818

Legal Settlements

-


-


-


(18,202)

Tax Impact of Adjustments

(152)


(797)


(152)


(924)

Total Adjustments

873


117,781


22,955


110,135









Adjusted Net Income (Loss) from Continuing Operations 

$2,316


$6,096


$(33,540)


$(17,265)

 









Horizon Lines, Inc.

Adjusted Net Income (Loss) Per Share Reconciliation










Quarter Ended September 23, 2012 


Quarter Ended September 25, 2011 


Nine Months Ended September 23, 2012 


Nine Months Ended September 25, 2011 

Net Income (Loss) Per Share

$0.02


$(102.24)


$(4.05)


$(134.40)

Net Income (Loss) Per Share from Discontinued Operations

-


(11.88)


(1.07)


(31.16)

Net Income (Loss) Per Share from Continuing Operations

0.02


(90.36)


(2.98)


(103.24)









Adjustments Per Share:








Accretion of Legal Settlements

0.01


0.21


0.08


0.44

Loss on Conversion/Modification of Debt/Other Refinancing Costs

-


0.02


1.99


1.25

Antitrust Legal Expenses

-


0.55


0.07


3.08

Union/Other Severance

-


0.08


0.08


2.47

Gain on Change in Value of Debt Conversion Features

-


-


(1.02)


-

Goodwill Impairment

-


95.07


-


95.23

Impairment Charge

-


-


0.01


2.28

Legal Settlements

-


-


-


(14.75)

Tax Impact of Adjustments

-


(0.64)


-


(0.75)

Total Adjustments

0.01


95.29


1.21


89.25









Adjusted Net Income (Loss) Per Share from Continuing Operations

$0.03


$4.93


$(1.77)


$(13.99)


 

Horizon Lines, Inc.

EBITDA and Adjusted EBITDA Reconciliation

(in thousands)










Quarter Ended September 23, 2012 


Quarter Ended September 25, 2011 


Nine Months Ended September 23, 2012 


Nine Months Ended September 25, 2011 

Net Income (Loss)

$1,857


$(126,367)


$(76,723)


$(165,854)

Net Income (Loss) from Discontinued Operations

414


(14,682)


(20,228)


(38,454)

Net Income (Loss) from Continuing Operations

1,443


(111,685)


(56,495)


(127,400)









Interest Expense, Net

13,808


13,418


49,036


37,044

Tax Expense

(2,150)


(1,339)


(1,805)


(1,143)

Depreciation and Amortization

13,273


14,265


40,705


44,228

EBITDA

26,374


(85,341)


31,441


(47,271)

Loss on Conversion/Modification of Debt/Other Refinancing Costs

391


30


37,761


1,538

Antitrust Legal Expenses

234


678


1,418


3,805

Union/Other Severance

234


101


1,513


3,047

Gain on Change in Value of Debt Conversion Features

(255)


-


(19,385)


-

Goodwill Impairment

-


117,506


-


117,506

Impairment Charge

-


-


257


2,818

Legal Settlements

-


-


-


(18,202)

Adjusted EBITDA

$26,978


$32,974


$53,005


$63,241

















Note:  EBITDA is defined as net income plus net interest expense, income taxes, depreciation and amortization.  We believe that EBITDA is a meaningful measure for investors as (i) EBITDA is a component of the measure used by our board of directors and management team to evaluate our operating performance  and (ii) EBITDA is a measure used by our management team to make day-to-day operating decisions.  Adjusted EBITDA excludes certain charges in order to evaluate our operating performance, for making day-to-day operating decisions and when determining the payment of discretionary bonuses.     

 

SOURCE Horizon Lines, Inc.



RELATED LINKS
http://www.horizonlines.com

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