Horizon Lines, Inc. (HRZL) reported financial results for the fiscal third quarter ended September 25, 2011. Third-quarter operating revenue from continuing operations increased 8.2% to $321.9 million from $297.6 million a year ago, the Company press release said.
Fuel surcharges accounted for approximately 22.9% of total revenue in the 2011 third quarter, compared with 14.6% of total revenue in the year-ago quarter. The largest factors in the $24.3 million revenue improvement were: a $30.1 million increase in revenue from the new China service and a $22.6 million growth in fuel surcharges. These gains were partially offset by a $18.5 million revenue decline resulting from lost space charter revenue; a $7.5 million decrease in revenue related to domestic volume shortfalls; a $1.5 million decline in terminal services revenue; and a $0.9 million contraction related to domestic container rates and mix.
GAAP operating loss from continuing operations for the third quarter totaled $113.5 million, compared with operating income of $18.1 million a year ago. The GAAP operating loss includes $120.5 million in charges related to goodwill impairment, equipment impairment, antitrust-related legal expenses, and employee severance (see reconciliation tables for specific line-item amounts). The 2010 thirdquarter GAAP operating income includes $3.4 million for equipment impairment, antitrust-related legal expenses and costs for union employee severance. Adjusting for these items, the third-quarter 2011 adjusted operating income from continuing operations totaled $7.1 million, compared with $21.5 million a year ago. Third-quarter 2011 operating results were negatively impacted by the termination of various agreements with Maersk, reduced domestic container volumes and lower rates. These negative factors were partially offset by vessel labor and lease savings and inland rail and trucking savings.
EBITDA from continuing operations totaled a negative $98.6 million for the 2011 third quarter, compared with a positive $33.2 million for the same period a year ago. Adjusted EBITDA from continuing operations for the third quarter of 2011 was $21.9 million, compared with $36.6 million for 2010. EBITDA and adjusted EBITDA for the 2011 and 2010 third quarters were impacted by the same factors affecting operating income.
The company had a weighted daily average of 30.9 million fully diluted shares outstanding for the third quarter of 2011, compared with 31.2 million a year ago.
For the nine months ended September 25, 2011, operating revenue from continuing operations increased 5.9% to $914.8 million from $863.7 million for the same period in 2010. EBITDA from continuing operations totaled negative $86.3 million compared with a positive $73.6 million a year ago. Adjusted EBITDA for the 2011 nine-month period totaled $26.4 million, after excluding the $117.5 million goodwill impairment charge, a $18.2 million net expense reversal related to legal settlement reductions and $13.4 million in antitrust-related legal expenses, equipment impairment charges, refinancing costs and severance-related charges (see reconciliation tables for specific line-item amounts).
Adjusted EBITDA for the 2010 nine-month period totaled $79.3 million, after excluding charges related to antitrust-related legal expenses, equipment impairment and severance-related charges totaling $5.7 million.
The net loss from continuing operations for the 2011 nine-month period totaled $166.8 million, or $5.40 per share, compared with net income from continuing operations of $0.6 million, or $0.02 per share, for the same period a year earlier. The adjusted net loss from continuing operations for the nine-month period of 2011 totaled $54.2 million, or $1.75 per share, compared with adjusted net income from continuing operations of $6.2 million, or $0.19 per share, a year ago.
About Horizon Lines
Horizon Lines, Inc. is the nation's leading domestic ocean shipping and integrated logistics company. The company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii and Puerto Rico. The company also provides integrated, reliable and cost competitive logistics solutions. Horizon Lines, Inc., is based in Charlotte, NC, and trades on the OTCQB Marketplace under symbol HRZL.