HRZL Horizon Lines Reports Third-Quarter Financial
Post# of 94185
Posted On: 11/05/2013 8:40:57 AM
HRZL Horizon Lines Reports Third-Quarter Financial Results
CHARLOTTE, N.C., Nov. 5, 2013 /PRNewswire/ -- Horizon Lines, Inc. (OTCQB: HRZL) today reported financial results for the fiscal third quarter ended September 22, 2013.
(Logo: http://photos.prnewswire.com/prnh/20121119/MM15928LOGO )
Financial results are being presented on a continuing operations basis, excluding the discontinued trans-Pacific container shipping operations.
Comparison of GAAP and Non-GAAP Results from Continuing Operations
Quarter Ended
(in millions, except per share data)*
9/22/2013
9/23/2012
GAAP:
Operating revenue
$ 273.7
$ 279.6
Operating income
$ 17.9
$ 13.2
Net income
$ 1.6
$ 1.4
Net income per diluted share
$ 0.02
$ 0.02
Non-GAAP:*
EBITDA
$ 31.3
$ 26.4
Adjusted operating income
$ 21.6
$ 13.7
Adjusted EBITDA
$ 35.0
$ 27.0
Adjusted net income
$ 5.2
$ 2.3
Adjusted net income per diluted share
$ 0.06
$ 0.03
* See attached schedules for reconciliation of third-quarter 2013 and 2012 reported GAAP results to Non-GAAP results. Per-share amounts reflect the weighted average of 88.8 million fully diluted shares outstanding for the 2013 third quarter, compared with 90.7 million fully diluted shares for the 2012 period.
"Horizon Lines third-quarter adjusted EBITDA increased 29.6% over the same period a year ago, driven largely by reduced vessel charter expense, increased non-transportation revenue, lower dry-dock transit and crew-related expenses and reduced overhead," said Sam Woodward, President and Chief Executive Officer. "The factors driving adjusted EBITDA growth were partially offset by reduced fuel recovery and certain contractual and inflationary increases in operating expenses more than offsetting a modest improvement in rates, net of fuel. Results represent the third consecutive quarter with double-digit percentage growth in adjusted EBITDA over prior-year results, adding further momentum to our improvement of Horizon Lines' financial performance."
Third-Quarter 2013 Financial Highlights
Volume, Rate & Fuel Cost – Container volume for the 2013 third quarter totaled 59,059 revenue loads, down 4.0% from 61,514 loads for the same period a year ago. The decline was primarily the result of the reduced number of sailings between Jacksonville and San Juan. Unit revenue per container totaled $4,236 in the 2013 third quarter, compared with $4,245 a year ago. Third-quarter unit revenue per container, net of fuel surcharges, was $3,263, up 1.4% from $3,218 a year ago. Vessel fuel costs averaged $642 per metric ton in the third quarter, 1.1% below the average price of $649 per ton in the same quarter a year ago.
Operating Revenue – Third-quarter operating revenue declined 2.1% to $273.7 million from $279.6 million a year ago. The factors driving the $5.9 million revenue decrease were a $8.0 million volume contraction, largely due to reduced sailings out of Jacksonville, and lower fuel surcharges of $5.4 million. These negative items were partially offset by a $4.7 million increase in non-transportation revenue and a $2.8 million increase in container revenue rates. The improvement in non-transportation revenue was primarily due to an increase in certain transportation services agreements and terminal services.
Operating Income – Operating income for the third quarter totaled $17.9 million, compared with $13.2 million a year ago. 2013 third-quarter operating income includes expenses totaling $3.7 million primarily associated with the impairment of excess equipment and an adjustment to previously recorded restructuring charges associated with changes to the Puerto Rico service. 2012 third-quarter operating income includes $0.5 million for antitrust-related legal expenses, severance and refinancing costs. Excluding these items, third-quarter 2013 adjusted operating income totaled $21.6 million, compared with $13.7 million a year ago. The $7.9 million improvement was primarily driven by a $3.9 million reduction in vessel lease expense and a $3.1 million increase in non-transportation revenue. (See reconciliation tables for specific line-item amounts.)
EBITDA – EBITDA totaled $31.3 million for the 2013 third quarter, compared with $26.4 million for the same period a year ago. Adjusted EBITDA for the third quarter of 2013 was $35.0 million, an increase of 29.6% from $27.0 million for 2012. EBITDA and adjusted EBITDA for the 2013 and 2012 third quarters were impacted by the same factors affecting operating income. Additionally, 2012 adjusted EBITDA reflects the exclusion of $0.3 million of non-cash gains 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 – The third-quarter net income from continuing operations totaled $1.6 million, or $0.02 per diluted share, on a weighted average of 88.8 million fully diluted shares outstanding. This compares with a year-ago net income of $1.4 million, or $0.02 per diluted share, on a weighted average of 90.7 million fully diluted shares outstanding. On an adjusted basis, the third-quarter net income from continuing operations totaled $5.2 million, or $0.06 per diluted share, compared with an adjusted net income of $2.3 million, or $0.03 per diluted share, a year ago. Adjusted net income for the 2013 and 2012 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 payments associated with antitrust-related legal settlements and the withdrawal from a multiemployer pension plan, and includes the tax impact of the adjustments. (See reconciliation tables for specific line-item amounts.)
Nine-Month Results – For the fiscal 2013 nine-month period, operating revenue decreased 4.4% to $777.9 million from $813.9 million for the same period in 2012. EBITDA totaled $68.5 million compared with $31.4 million a year ago. Nine-month 2013 adjusted EBITDA totaled $77.9 million, versus $53.0 million for the same period in 2012. The $24.9 million improvement was primarily due to a reduction in vessel lease expense, lower dry-dock transit and crew-related expenses, higher non-transportation revenue, reduced overhead, and gains on the sale of assets, partially offset by reduced fuel recovery, higher vessel operating expenses and certain contractual and inflationary increases in operating expenses more than offsetting a modest improvement in rates, net of fuel. The net loss from continuing operations for the 2013 nine-month period totaled $19.3 million, or $0.54 per share on 35.5 million weighted average shares outstanding, compared with a net loss of $56.5 million, or $2.98 per share on 18.9 million weighted average shares outstanding, for the prior year. The adjusted net loss from continuing operations for the 2013 nine-month period totaled $9.4 million, or $0.27 per share, contrasted with an adjusted net loss from continuing operations of $33.5 million, or $1.77 per share, for the comparable year-ago period. (See reconciliation tables for specific line items excluded from adjusted EBITDA and adjusted net loss.)
Shares Outstanding – The company had a weighted daily average of 36.2 million basic shares outstanding for the third quarter of 2013, and 35.5 million weighted average basic shares outstanding for the first nine months of the year. The company had a weighted daily average of 88.8 million diluted shares outstanding for the third quarter of 2013, and 35.5 million weighted average shares outstanding for the first nine months of the year. In 2012, the company had a weighted daily average of 90.7 million diluted shares outstanding for the third quarter, and 18.9 million weighted average shares outstanding for the nine-month period. Shares outstanding reflect the company's 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 25, 2013, the equivalent of 92.4 million fully diluted shares of the company's stock was outstanding, consisting of 39.4 million shares of common stock and warrants convertible into 53.0 million shares of common stock.
Liquidity & Debt Structure – The company had total liquidity of $69.6 million as of September 22, 2013, consisting of cash of $2.4 million and $67.2 million available under its asset-based loan (ABL) revolving credit facility. Funded debt outstanding totaled $501.5 million, consisting of: $221.6 million of 11.00% first-lien secured notes due October 15, 2016; $171.0 million of 13.00% – 15.00% second-lien secured notes due October 15, 2016, bearing interest at 15.00% being paid in kind with additional second-lien secured notes; a $75.8 million term loan to fund the January 2013 purchase of the company's Alaska vessels, bearing interest at 10.25% and maturing September 30, 2016; a $20.0 million super-priority term loan, also for purchase of the Alaska vessels, bearing interest at 8.00% and maturing September 30, 2016; $2.0 million of 6.00% convertible notes, due April 15, 2017; and $10.9 million in capital leases. There were no borrowings on the company's ABL facility, which matures October 5, 2016. The company's weighted average interest rate for funded debt was 12.2%. Availability under the ABL credit facility is based on a percentage of eligible accounts receivable and customary reserves, with a maximum of $100.0 million of borrowing availability. Letters of credit issued against the ABL facility totaled $12.9 million at September 22, 2013.
Please see attached schedules for the reconciliation of third-quarter 2013 and 2012 reported GAAP results and Non-GAAP adjusted results.
Outlook
Management expects 2013 revenue container volumes to be below 2012 levels primarily due to the elimination of one weekly sailing from Jacksonville, Florida to San Juan, Puerto Rico. The June 2013 addition of a bi-weekly Jacksonville sailing to our southbound service between Houston, Texas and San Juan is allowing us to capture incremental volumes while utilizing an in service vessel. We expect revenue container rates to increase marginally and these increases are necessary to partially mitigate increases in expenses associated with our revenue container volumes, including our vessel payroll costs and benefits, stevedoring, port charges, wharfage, inland transportation costs, and rolling stock costs, among others.
During 2012, the company incurred considerable expenses associated with the dry-docking of our Puerto Rico vessels in Asia. Although we are dry-docking four of our west coast vessels in 2013 and we dry-docked four vessels in 2012, the expenses will be significantly lower in 2013 due to the much shorter transit and out of service times for our west coast vessels.
Vessel lease expense will be approximately $13.8 million lower than 2012 expenses due to the acquisition of three of our Jones Act qualified vessels off of charter on January 31, 2013. The lower vessel lease expense will be partially offset by approximately $8.5 million of additional interest expense in 2013 in connection with debt incurred for the acquisition of the vessels.
The company will also have overhead savings associated with the reduction of its non-union workforce beyond the reductions associated with the Puerto Rico service change. We continually evaluate our processes for potential efficiencies and have employed numerous cost-saving initiatives. For example, our move from Elizabeth, New Jersey, to Philadelphia, Pennsylvania will produce significant advantages for our customers and will also yield long term-cost efficiencies for us. These reductions will be partially offset by higher incentive and stock based compensation expenses and other administrative expenses.
As a result of these factors, management expects 2013 financial results to exceed 2012 results, with 2013 adjusted EBITDA projected between $87.0 million and $95.0 million, compared with $66.0 million in fiscal 2012.
The company remains focused on continuing to further improve liquidity. Based upon our current level of operations, we believe cash flow from operations and cash on hand, together with borrowings available under the ABL Facility, will be adequate to meet our liquidity needs for the remainder of fiscal 2013. Total liquidity during the remainder of 2013 is expected to range between a low of approximately $50.0 million in fiscal November to a high of approximately $60.0 million at the end of the fiscal year. The decline in liquidity from the $69.6 million at the end of the third quarter is primarily due to the payment of $13.4 million of semi-annual debt service on the first-lien secured notes in October and a $5.3 million one-time payment in November to settle a multiemployer pension plan withdrawal liability. Liquidity is expected to rebound during December due to the normal seasonal cash collection peak.
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 expenses and income, 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 press 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 owns a fleet of 13 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; prices for our services; government investigations and legal proceedings; suspension or debarment by the federal government; failure to comply 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 2012 Form 10-K filed with the SEC on March 12, 2013, 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.
(tables follow)
Horizon Lines, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except per share data)
September 22,
December 23,
2013
2012
Assets
Current assets
Cash
$ 2,353
$ 27,839
Accounts receivable, net of allowance of $3,346 and $3,465 at
September 22, 2013 and December 23, 2012, respectively
110,455
99,685
Materials and supplies
24,943
29,521
Assets held for sale
7,702
-
Deferred tax asset
3,801
4,626
Other current assets
6,714
8,563
Total current assets
155,968
170,234
Property and equipment, net
224,881
160,050
Goodwill
198,793
198,793
Intangible assets, net
38,112
48,573
Other long-term assets
25,100
23,584
Total assets
$ 642,854
$ 601,234
Liabilities and Stockholders' Deficiency
Current liabilities
Accounts payable
$ 42,659
$ 46,584
Current portion of long-term debt, including capital lease
8,950
3,608
Accrued vessel rent
-
4,902
Other accrued liabilities
92,236
87,358
Total current liabilities
143,845
142,452
Long-term debt, including capital lease, net of current portion
500,287
434,222
Deferred rent
-
9,081
Deferred tax liability
4,425
4,662
Other long-term liabilities
26,458
27,559
Total liabilities
675,015
617,976
Stockholders' deficiency
Preferred stock, $.01 par value, 30,500 shares authorized; no shares
issued or outstanding
-
-
Common stock, $.01 par value, 150,000 shares authorized, 38,885
shares issued and outstanding as of September 22, 2013, and 100,000 shares
authorized, 34,434 issued and outstanding as of December 23, 2012
999
954
Additional paid in capital
383,466
381,445
Accumulated deficit
(415,732)
(397,958)
Accumulated other comprehensive loss
(894)
(1,183)
Total stockholders' deficiency
(32,161)
(16,742)
Total liabilities and stockholders' deficiency
$ 642,854
$ 601,234
Horizon Lines, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Quarter Ended
Nine Months Ended
September 22,
September 23,
September 22,
September 23,
2013
2012
2013
2012
Operating revenue
$ 273,663
$ 279,604
$ 777,938
$ 813,898
Operating expense:
Vessel
72,205
83,850
221,627
264,718
Marine
53,435
53,832
153,386
156,176
Inland
48,425
46,902
135,447
140,228
Land
36,054
38,069
107,688
111,557
Rolling stock rent
9,940
10,875
29,511
31,542
Cost of services (excluding depreciation expense)
220,059
233,528
647,659
704,221
Depreciation and amortization
9,216
9,319
28,366
30,116
Amortization of vessel dry-docking
4,221
3,954
10,430
10,589
Selling, general and administrative
18,853
19,447
56,691
60,492
Restructuring charge
1,042
-
6,294
-
Impairment charge
2,619
-
2,637
257
Miscellaneous (income) expense, net
(265)
134
(3,738)
51
Total operating expense
255,745
266,382
748,339
805,726
Operating income
17,918
13,222
29,599
8,172
Other expense:
Interest expense, net
17,015
13,808
49,649
49,036
Loss (gain) on conversion of debt
-
368
(5)
36,789
Loss (gain) on change in value of debt conversion features
23
(255)
(136)
(19,385)
Other expense, net
6
8
16
32
Income (loss) from continuing operations before income tax benefit
874
(707)
(19,925)
(58,300)
Income tax benefit
(729)
(2,150)
(603)
(1,805)
Net income (loss) from continuing operations
1,603
1,443
(19,322)
(56,495)
Net income (loss) from discontinued operations
2,477
414
1,548
(20,228)
Net income (loss)
$ 4,080
$ 1,857
$ (17,774)
$ (76,723)
Basic net income (loss) per share:
Continuing operations
$ 0.04
$ 0.05
$ (0.54)
$ (2.98)
Discontinued operations
0.07
0.01
0.04
(1.07)
Basic net income (loss) per share
$ 0.11
$ 0.06
$ (0.50)
$ (4.05)
Diluted net income (loss) per share:
Continuing operations
$ 0.02
$ 0.02
$ (0.54)
$ (2.98)
Discontinued operations
0.03
0.00
0.04
(1.07)
Diluted net income (loss) per share
$ 0.05
$ 0.02
$ (0.50)
$ (4.05)
Number of weighted average shares used in calculation:
Basic
36,215
33,642
35,521
18,943
Diluted
88,803
90,745
35,521
18,943
Horizon Lines, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 22,
September 23,
2013
2012
Cash flows from operating activities:
Net loss from continuing operations
$ (19,322)
$ (56,495)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation
18,472
16,015
Amortization of other intangible assets
9,894
14,101
Amortization of vessel dry-docking
10,430
10,589
Amortization of deferred financing costs
2,419
1,977
Gain on change in value of conversion features
(136)
(19,385)
Restructuring charge
6,294
-
Impairment charge
2,637
257
(Gain) loss on conversion of debt
(5)
36,789
Deferred income taxes
(418)
(170)
Gain on equipment disposals
(4,369)
(170)
Stock-based compensation
2,336
1,274
Payment-in-kind interest expense
18,815
14,946
Accretion of interest on debt
742
3,963
Other non-cash interest accretion
975
1,543
Changes in operating assets and liabilities:
Accounts receivable
(10,770)
(9,988)
Materials and supplies
4,321
153
Other current assets
1,726
(902)
Accounts payable
(3,925)
12,937
Accrued liabilities
6,017
8,515
Vessel rent
(777)
(9,918)
Vessel dry-docking payments
(12,284)
(14,578)
Accrued legal settlements
(6,500)
(5,500)
Other assets/liabilities
9
128
Net cash provided by operating activities from continuing operations
26,581
6,081
Net cash provided by (used) in operating activities from discontinued operations
2,431
(23,875)
Cash flows from investing activities:
Purchases of property and equipment
(106,417)
(9,511)
Proceeds from the sale of property and equipment
7,929
1,407
Net cash used in investing activities from continuing operations
(98,488)
(8,104)
Cash flows from financing activities:
Proceeds from issuance of debt
95,000
-
Borrowing under ABL facility
15,500
42,500
Payments under ABL facility
(58,000)
-
Payments on long-term debt
(1,125)
(3,359)
Payments of financing costs
(5,637)
(5,679)
Payments on capital lease obligations
(1,748)
(1,356)
Net cash provided by financing activities
43,990
32,106
Net (decrease) increase in cash from continuing operations
(27,917)
30,083
Net increase (decrease) in cash from discontinued operations
2,431
(23,875)
Net (decrease) increase in cash
(25,486)
6,208
Cash at beginning of period
27,839
21,147
Cash at end of period
$ 2,353
$ 27,355
Horizon Lines, Inc.
Adjusted Operating Income Reconciliation
(in thousands)
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Operating Income
$ 17,918
$ 13,222
$ 29,599
$ 8,172
Adjustments:
Restructuring Charge
1,042
-
6,294
-
Antitrust Legal Expenses
18
234
266
1,418
Impairment Charge
2,619
-
2,637
257
Union/Other Severance
9
234
327
1,513
Refinancing Costs
-
23
-
972
Total Adjustments
3,688
491
9,524
4,160
Adjusted Operating Income
$ 21,606
$ 13,713
$ 39,123
$ 12,332
Horizon Lines, Inc.
Adjusted Net Income (Loss) Reconciliation
(in thousands)
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Net Income (Loss)
$ 4,080
$ 1,857
$ (17,774)
$ (76,723)
Net Income (Loss) from Discontinued Operations
2,477
414
1,548
(20,228)
Net Income (Loss) from Continuing Operations
1,603
1,443
(19,322)
(56,495)
Adjustments:
Restructuring Charge
1,042
-
6,294
-
Accretion of Non-Cash Interest
462
421
1,123
1,543
Antitrust Legal Expenses
18
234
266
1,418
Impairment Charge
2,619
-
2,637
257
Union/Other Severance
9
234
327
1,513
Loss (Gain) on Change in Value of Debt Conversion Features
23
(255)
(136)
(19,385)
Loss (Gain) on Conversion of Debt/Other Refinancing Costs
-
391
(5)
37,761
Tax Impact of Adjustments
(600)
(152)
(599)
(152)
Total Adjustments
3,573
873
#
9,907
22,955
Adjusted Net Income (Loss) from Continuing Operations
$ 5,176
$ 2,316
$ (9,415)
$ (33,540)
Horizon Lines, Inc.
Adjusted Net Income (Loss) Per Share Reconciliation
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Diluted Net Income (Loss) Per Share
$ 0.05
$ 0.02
$ (0.50)
$ (4.05)
Diluted Net Income (Loss) Per Share from Discontinued Operations
0.03
-
0.04
(1.07)
Diluted Net Income (Loss) Per Share from Continuing Operations
0.02
0.02
(0.54)
(2.98)
Adjustments Per Share:
Restructuring Charge
0.01
-
0.18
-
Accretion of Non-Cash Interest
-
0.01
0.03
0.08
Antitrust Legal Expenses
-
-
-
0.07
Impairment Charge
0.03
-
0.07
0.01
Union/Other Severance
-
-
0.01
0.08
Loss (Gain) on Change in Value of Debt Conversion Features
-
-
-
(1.01)
Loss (Gain) on Conversion of Debt/Other Refinancing Costs
-
-
-
1.99
Tax Impact of Adjustments
-
-
(0.02)
(0.01)
Total Adjustments
0.04
0.01
0.27
1.21
Diluted Adjusted Net Income (Loss) Per Share from Continuing Operations
$ 0.06
$ 0.03
$ (0.27)
$ (1.77)
Horizon Lines, Inc.
EBITDA and Adjusted EBITDA Reconciliation
(in thousands)
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Net Income (Loss)
$ 4,080
$ 1,857
$ (17,774)
$ (76,723)
Net Income (Loss) from Discontinued Operations
2,477
414
1,548
(20,228)
Net Income (Loss) from Continuing Operations
1,603
1,443
(19,322)
(56,495)
Interest Expense, Net
17,015
13,808
49,649
49,036
Income Tax Benefit
(729)
(2,150)
(603)
(1,805)
Depreciation and Amortization
13,437
13,273
38,796
40,705
EBITDA
31,326
26,374
68,520
31,441
Restructuring Charge
1,042
-
6,294
-
Antitrust Legal Expenses
18
234
266
1,418
Impairment Charge
2,619
-
2,637
257
Union/Other Severance
9
234
327
1,513
Loss (Gain) on Change in Value of Debt Conversion Features
23
(255)
(136)
(19,385)
Loss (Gain) on Conversion of Debt/Other Refinancing Costs
-
391
(5)
37,761
Adjusted EBITDA
$ 35,037
$ 26,978
$ 77,903
$ 53,005
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 to facilitate internal comparisons to competitors' results and the marine container shipping and logistics industry in general. Adjusted EBITDA excludes certain charges in order to evaluate our operating performance, and when determining the payment of discretionary bonuses.
Horizon Lines, Inc.
2013 Estimated EBITDA and Adjusted EBITDA Reconciliation
(in thousands)
2013
Net Loss
$ (39,593) - (31,593)
Net Income from Discontinued Operations
1,548
Net Loss from Continuing Operations
(41,141) - (33,141)
Interest Expense, Net
67,000
Tax Benefit
(655)
Depreciation and Amortization
52,100
EBITDA
77,304 - 85,304
Impairment Charges
2,637
Restructuring Charges/Severance
6,800
Antitrust Legal Expenses
400
Gain on Conversion of Debt/Other Refinancing Costs
(136)
Gain on Change in Value of Debt Conversion Features
(5)
Adjusted EBITDA
$ 87,000 - 95,000
SOURCE Horizon Lines, Inc.
Copyright 2013 PR Newswire
CHARLOTTE, N.C., Nov. 5, 2013 /PRNewswire/ -- Horizon Lines, Inc. (OTCQB: HRZL) today reported financial results for the fiscal third quarter ended September 22, 2013.
(Logo: http://photos.prnewswire.com/prnh/20121119/MM15928LOGO )
Financial results are being presented on a continuing operations basis, excluding the discontinued trans-Pacific container shipping operations.
Comparison of GAAP and Non-GAAP Results from Continuing Operations
Quarter Ended
(in millions, except per share data)*
9/22/2013
9/23/2012
GAAP:
Operating revenue
$ 273.7
$ 279.6
Operating income
$ 17.9
$ 13.2
Net income
$ 1.6
$ 1.4
Net income per diluted share
$ 0.02
$ 0.02
Non-GAAP:*
EBITDA
$ 31.3
$ 26.4
Adjusted operating income
$ 21.6
$ 13.7
Adjusted EBITDA
$ 35.0
$ 27.0
Adjusted net income
$ 5.2
$ 2.3
Adjusted net income per diluted share
$ 0.06
$ 0.03
* See attached schedules for reconciliation of third-quarter 2013 and 2012 reported GAAP results to Non-GAAP results. Per-share amounts reflect the weighted average of 88.8 million fully diluted shares outstanding for the 2013 third quarter, compared with 90.7 million fully diluted shares for the 2012 period.
"Horizon Lines third-quarter adjusted EBITDA increased 29.6% over the same period a year ago, driven largely by reduced vessel charter expense, increased non-transportation revenue, lower dry-dock transit and crew-related expenses and reduced overhead," said Sam Woodward, President and Chief Executive Officer. "The factors driving adjusted EBITDA growth were partially offset by reduced fuel recovery and certain contractual and inflationary increases in operating expenses more than offsetting a modest improvement in rates, net of fuel. Results represent the third consecutive quarter with double-digit percentage growth in adjusted EBITDA over prior-year results, adding further momentum to our improvement of Horizon Lines' financial performance."
Third-Quarter 2013 Financial Highlights
Volume, Rate & Fuel Cost – Container volume for the 2013 third quarter totaled 59,059 revenue loads, down 4.0% from 61,514 loads for the same period a year ago. The decline was primarily the result of the reduced number of sailings between Jacksonville and San Juan. Unit revenue per container totaled $4,236 in the 2013 third quarter, compared with $4,245 a year ago. Third-quarter unit revenue per container, net of fuel surcharges, was $3,263, up 1.4% from $3,218 a year ago. Vessel fuel costs averaged $642 per metric ton in the third quarter, 1.1% below the average price of $649 per ton in the same quarter a year ago.
Operating Revenue – Third-quarter operating revenue declined 2.1% to $273.7 million from $279.6 million a year ago. The factors driving the $5.9 million revenue decrease were a $8.0 million volume contraction, largely due to reduced sailings out of Jacksonville, and lower fuel surcharges of $5.4 million. These negative items were partially offset by a $4.7 million increase in non-transportation revenue and a $2.8 million increase in container revenue rates. The improvement in non-transportation revenue was primarily due to an increase in certain transportation services agreements and terminal services.
Operating Income – Operating income for the third quarter totaled $17.9 million, compared with $13.2 million a year ago. 2013 third-quarter operating income includes expenses totaling $3.7 million primarily associated with the impairment of excess equipment and an adjustment to previously recorded restructuring charges associated with changes to the Puerto Rico service. 2012 third-quarter operating income includes $0.5 million for antitrust-related legal expenses, severance and refinancing costs. Excluding these items, third-quarter 2013 adjusted operating income totaled $21.6 million, compared with $13.7 million a year ago. The $7.9 million improvement was primarily driven by a $3.9 million reduction in vessel lease expense and a $3.1 million increase in non-transportation revenue. (See reconciliation tables for specific line-item amounts.)
EBITDA – EBITDA totaled $31.3 million for the 2013 third quarter, compared with $26.4 million for the same period a year ago. Adjusted EBITDA for the third quarter of 2013 was $35.0 million, an increase of 29.6% from $27.0 million for 2012. EBITDA and adjusted EBITDA for the 2013 and 2012 third quarters were impacted by the same factors affecting operating income. Additionally, 2012 adjusted EBITDA reflects the exclusion of $0.3 million of non-cash gains 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 – The third-quarter net income from continuing operations totaled $1.6 million, or $0.02 per diluted share, on a weighted average of 88.8 million fully diluted shares outstanding. This compares with a year-ago net income of $1.4 million, or $0.02 per diluted share, on a weighted average of 90.7 million fully diluted shares outstanding. On an adjusted basis, the third-quarter net income from continuing operations totaled $5.2 million, or $0.06 per diluted share, compared with an adjusted net income of $2.3 million, or $0.03 per diluted share, a year ago. Adjusted net income for the 2013 and 2012 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 payments associated with antitrust-related legal settlements and the withdrawal from a multiemployer pension plan, and includes the tax impact of the adjustments. (See reconciliation tables for specific line-item amounts.)
Nine-Month Results – For the fiscal 2013 nine-month period, operating revenue decreased 4.4% to $777.9 million from $813.9 million for the same period in 2012. EBITDA totaled $68.5 million compared with $31.4 million a year ago. Nine-month 2013 adjusted EBITDA totaled $77.9 million, versus $53.0 million for the same period in 2012. The $24.9 million improvement was primarily due to a reduction in vessel lease expense, lower dry-dock transit and crew-related expenses, higher non-transportation revenue, reduced overhead, and gains on the sale of assets, partially offset by reduced fuel recovery, higher vessel operating expenses and certain contractual and inflationary increases in operating expenses more than offsetting a modest improvement in rates, net of fuel. The net loss from continuing operations for the 2013 nine-month period totaled $19.3 million, or $0.54 per share on 35.5 million weighted average shares outstanding, compared with a net loss of $56.5 million, or $2.98 per share on 18.9 million weighted average shares outstanding, for the prior year. The adjusted net loss from continuing operations for the 2013 nine-month period totaled $9.4 million, or $0.27 per share, contrasted with an adjusted net loss from continuing operations of $33.5 million, or $1.77 per share, for the comparable year-ago period. (See reconciliation tables for specific line items excluded from adjusted EBITDA and adjusted net loss.)
Shares Outstanding – The company had a weighted daily average of 36.2 million basic shares outstanding for the third quarter of 2013, and 35.5 million weighted average basic shares outstanding for the first nine months of the year. The company had a weighted daily average of 88.8 million diluted shares outstanding for the third quarter of 2013, and 35.5 million weighted average shares outstanding for the first nine months of the year. In 2012, the company had a weighted daily average of 90.7 million diluted shares outstanding for the third quarter, and 18.9 million weighted average shares outstanding for the nine-month period. Shares outstanding reflect the company's 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 25, 2013, the equivalent of 92.4 million fully diluted shares of the company's stock was outstanding, consisting of 39.4 million shares of common stock and warrants convertible into 53.0 million shares of common stock.
Liquidity & Debt Structure – The company had total liquidity of $69.6 million as of September 22, 2013, consisting of cash of $2.4 million and $67.2 million available under its asset-based loan (ABL) revolving credit facility. Funded debt outstanding totaled $501.5 million, consisting of: $221.6 million of 11.00% first-lien secured notes due October 15, 2016; $171.0 million of 13.00% – 15.00% second-lien secured notes due October 15, 2016, bearing interest at 15.00% being paid in kind with additional second-lien secured notes; a $75.8 million term loan to fund the January 2013 purchase of the company's Alaska vessels, bearing interest at 10.25% and maturing September 30, 2016; a $20.0 million super-priority term loan, also for purchase of the Alaska vessels, bearing interest at 8.00% and maturing September 30, 2016; $2.0 million of 6.00% convertible notes, due April 15, 2017; and $10.9 million in capital leases. There were no borrowings on the company's ABL facility, which matures October 5, 2016. The company's weighted average interest rate for funded debt was 12.2%. Availability under the ABL credit facility is based on a percentage of eligible accounts receivable and customary reserves, with a maximum of $100.0 million of borrowing availability. Letters of credit issued against the ABL facility totaled $12.9 million at September 22, 2013.
Please see attached schedules for the reconciliation of third-quarter 2013 and 2012 reported GAAP results and Non-GAAP adjusted results.
Outlook
Management expects 2013 revenue container volumes to be below 2012 levels primarily due to the elimination of one weekly sailing from Jacksonville, Florida to San Juan, Puerto Rico. The June 2013 addition of a bi-weekly Jacksonville sailing to our southbound service between Houston, Texas and San Juan is allowing us to capture incremental volumes while utilizing an in service vessel. We expect revenue container rates to increase marginally and these increases are necessary to partially mitigate increases in expenses associated with our revenue container volumes, including our vessel payroll costs and benefits, stevedoring, port charges, wharfage, inland transportation costs, and rolling stock costs, among others.
During 2012, the company incurred considerable expenses associated with the dry-docking of our Puerto Rico vessels in Asia. Although we are dry-docking four of our west coast vessels in 2013 and we dry-docked four vessels in 2012, the expenses will be significantly lower in 2013 due to the much shorter transit and out of service times for our west coast vessels.
Vessel lease expense will be approximately $13.8 million lower than 2012 expenses due to the acquisition of three of our Jones Act qualified vessels off of charter on January 31, 2013. The lower vessel lease expense will be partially offset by approximately $8.5 million of additional interest expense in 2013 in connection with debt incurred for the acquisition of the vessels.
The company will also have overhead savings associated with the reduction of its non-union workforce beyond the reductions associated with the Puerto Rico service change. We continually evaluate our processes for potential efficiencies and have employed numerous cost-saving initiatives. For example, our move from Elizabeth, New Jersey, to Philadelphia, Pennsylvania will produce significant advantages for our customers and will also yield long term-cost efficiencies for us. These reductions will be partially offset by higher incentive and stock based compensation expenses and other administrative expenses.
As a result of these factors, management expects 2013 financial results to exceed 2012 results, with 2013 adjusted EBITDA projected between $87.0 million and $95.0 million, compared with $66.0 million in fiscal 2012.
The company remains focused on continuing to further improve liquidity. Based upon our current level of operations, we believe cash flow from operations and cash on hand, together with borrowings available under the ABL Facility, will be adequate to meet our liquidity needs for the remainder of fiscal 2013. Total liquidity during the remainder of 2013 is expected to range between a low of approximately $50.0 million in fiscal November to a high of approximately $60.0 million at the end of the fiscal year. The decline in liquidity from the $69.6 million at the end of the third quarter is primarily due to the payment of $13.4 million of semi-annual debt service on the first-lien secured notes in October and a $5.3 million one-time payment in November to settle a multiemployer pension plan withdrawal liability. Liquidity is expected to rebound during December due to the normal seasonal cash collection peak.
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 expenses and income, 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 press 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 owns a fleet of 13 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; prices for our services; government investigations and legal proceedings; suspension or debarment by the federal government; failure to comply 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 2012 Form 10-K filed with the SEC on March 12, 2013, 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.
(tables follow)
Horizon Lines, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except per share data)
September 22,
December 23,
2013
2012
Assets
Current assets
Cash
$ 2,353
$ 27,839
Accounts receivable, net of allowance of $3,346 and $3,465 at
September 22, 2013 and December 23, 2012, respectively
110,455
99,685
Materials and supplies
24,943
29,521
Assets held for sale
7,702
-
Deferred tax asset
3,801
4,626
Other current assets
6,714
8,563
Total current assets
155,968
170,234
Property and equipment, net
224,881
160,050
Goodwill
198,793
198,793
Intangible assets, net
38,112
48,573
Other long-term assets
25,100
23,584
Total assets
$ 642,854
$ 601,234
Liabilities and Stockholders' Deficiency
Current liabilities
Accounts payable
$ 42,659
$ 46,584
Current portion of long-term debt, including capital lease
8,950
3,608
Accrued vessel rent
-
4,902
Other accrued liabilities
92,236
87,358
Total current liabilities
143,845
142,452
Long-term debt, including capital lease, net of current portion
500,287
434,222
Deferred rent
-
9,081
Deferred tax liability
4,425
4,662
Other long-term liabilities
26,458
27,559
Total liabilities
675,015
617,976
Stockholders' deficiency
Preferred stock, $.01 par value, 30,500 shares authorized; no shares
issued or outstanding
-
-
Common stock, $.01 par value, 150,000 shares authorized, 38,885
shares issued and outstanding as of September 22, 2013, and 100,000 shares
authorized, 34,434 issued and outstanding as of December 23, 2012
999
954
Additional paid in capital
383,466
381,445
Accumulated deficit
(415,732)
(397,958)
Accumulated other comprehensive loss
(894)
(1,183)
Total stockholders' deficiency
(32,161)
(16,742)
Total liabilities and stockholders' deficiency
$ 642,854
$ 601,234
Horizon Lines, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Quarter Ended
Nine Months Ended
September 22,
September 23,
September 22,
September 23,
2013
2012
2013
2012
Operating revenue
$ 273,663
$ 279,604
$ 777,938
$ 813,898
Operating expense:
Vessel
72,205
83,850
221,627
264,718
Marine
53,435
53,832
153,386
156,176
Inland
48,425
46,902
135,447
140,228
Land
36,054
38,069
107,688
111,557
Rolling stock rent
9,940
10,875
29,511
31,542
Cost of services (excluding depreciation expense)
220,059
233,528
647,659
704,221
Depreciation and amortization
9,216
9,319
28,366
30,116
Amortization of vessel dry-docking
4,221
3,954
10,430
10,589
Selling, general and administrative
18,853
19,447
56,691
60,492
Restructuring charge
1,042
-
6,294
-
Impairment charge
2,619
-
2,637
257
Miscellaneous (income) expense, net
(265)
134
(3,738)
51
Total operating expense
255,745
266,382
748,339
805,726
Operating income
17,918
13,222
29,599
8,172
Other expense:
Interest expense, net
17,015
13,808
49,649
49,036
Loss (gain) on conversion of debt
-
368
(5)
36,789
Loss (gain) on change in value of debt conversion features
23
(255)
(136)
(19,385)
Other expense, net
6
8
16
32
Income (loss) from continuing operations before income tax benefit
874
(707)
(19,925)
(58,300)
Income tax benefit
(729)
(2,150)
(603)
(1,805)
Net income (loss) from continuing operations
1,603
1,443
(19,322)
(56,495)
Net income (loss) from discontinued operations
2,477
414
1,548
(20,228)
Net income (loss)
$ 4,080
$ 1,857
$ (17,774)
$ (76,723)
Basic net income (loss) per share:
Continuing operations
$ 0.04
$ 0.05
$ (0.54)
$ (2.98)
Discontinued operations
0.07
0.01
0.04
(1.07)
Basic net income (loss) per share
$ 0.11
$ 0.06
$ (0.50)
$ (4.05)
Diluted net income (loss) per share:
Continuing operations
$ 0.02
$ 0.02
$ (0.54)
$ (2.98)
Discontinued operations
0.03
0.00
0.04
(1.07)
Diluted net income (loss) per share
$ 0.05
$ 0.02
$ (0.50)
$ (4.05)
Number of weighted average shares used in calculation:
Basic
36,215
33,642
35,521
18,943
Diluted
88,803
90,745
35,521
18,943
Horizon Lines, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 22,
September 23,
2013
2012
Cash flows from operating activities:
Net loss from continuing operations
$ (19,322)
$ (56,495)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation
18,472
16,015
Amortization of other intangible assets
9,894
14,101
Amortization of vessel dry-docking
10,430
10,589
Amortization of deferred financing costs
2,419
1,977
Gain on change in value of conversion features
(136)
(19,385)
Restructuring charge
6,294
-
Impairment charge
2,637
257
(Gain) loss on conversion of debt
(5)
36,789
Deferred income taxes
(418)
(170)
Gain on equipment disposals
(4,369)
(170)
Stock-based compensation
2,336
1,274
Payment-in-kind interest expense
18,815
14,946
Accretion of interest on debt
742
3,963
Other non-cash interest accretion
975
1,543
Changes in operating assets and liabilities:
Accounts receivable
(10,770)
(9,988)
Materials and supplies
4,321
153
Other current assets
1,726
(902)
Accounts payable
(3,925)
12,937
Accrued liabilities
6,017
8,515
Vessel rent
(777)
(9,918)
Vessel dry-docking payments
(12,284)
(14,578)
Accrued legal settlements
(6,500)
(5,500)
Other assets/liabilities
9
128
Net cash provided by operating activities from continuing operations
26,581
6,081
Net cash provided by (used) in operating activities from discontinued operations
2,431
(23,875)
Cash flows from investing activities:
Purchases of property and equipment
(106,417)
(9,511)
Proceeds from the sale of property and equipment
7,929
1,407
Net cash used in investing activities from continuing operations
(98,488)
(8,104)
Cash flows from financing activities:
Proceeds from issuance of debt
95,000
-
Borrowing under ABL facility
15,500
42,500
Payments under ABL facility
(58,000)
-
Payments on long-term debt
(1,125)
(3,359)
Payments of financing costs
(5,637)
(5,679)
Payments on capital lease obligations
(1,748)
(1,356)
Net cash provided by financing activities
43,990
32,106
Net (decrease) increase in cash from continuing operations
(27,917)
30,083
Net increase (decrease) in cash from discontinued operations
2,431
(23,875)
Net (decrease) increase in cash
(25,486)
6,208
Cash at beginning of period
27,839
21,147
Cash at end of period
$ 2,353
$ 27,355
Horizon Lines, Inc.
Adjusted Operating Income Reconciliation
(in thousands)
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Operating Income
$ 17,918
$ 13,222
$ 29,599
$ 8,172
Adjustments:
Restructuring Charge
1,042
-
6,294
-
Antitrust Legal Expenses
18
234
266
1,418
Impairment Charge
2,619
-
2,637
257
Union/Other Severance
9
234
327
1,513
Refinancing Costs
-
23
-
972
Total Adjustments
3,688
491
9,524
4,160
Adjusted Operating Income
$ 21,606
$ 13,713
$ 39,123
$ 12,332
Horizon Lines, Inc.
Adjusted Net Income (Loss) Reconciliation
(in thousands)
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Net Income (Loss)
$ 4,080
$ 1,857
$ (17,774)
$ (76,723)
Net Income (Loss) from Discontinued Operations
2,477
414
1,548
(20,228)
Net Income (Loss) from Continuing Operations
1,603
1,443
(19,322)
(56,495)
Adjustments:
Restructuring Charge
1,042
-
6,294
-
Accretion of Non-Cash Interest
462
421
1,123
1,543
Antitrust Legal Expenses
18
234
266
1,418
Impairment Charge
2,619
-
2,637
257
Union/Other Severance
9
234
327
1,513
Loss (Gain) on Change in Value of Debt Conversion Features
23
(255)
(136)
(19,385)
Loss (Gain) on Conversion of Debt/Other Refinancing Costs
-
391
(5)
37,761
Tax Impact of Adjustments
(600)
(152)
(599)
(152)
Total Adjustments
3,573
873
#
9,907
22,955
Adjusted Net Income (Loss) from Continuing Operations
$ 5,176
$ 2,316
$ (9,415)
$ (33,540)
Horizon Lines, Inc.
Adjusted Net Income (Loss) Per Share Reconciliation
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Diluted Net Income (Loss) Per Share
$ 0.05
$ 0.02
$ (0.50)
$ (4.05)
Diluted Net Income (Loss) Per Share from Discontinued Operations
0.03
-
0.04
(1.07)
Diluted Net Income (Loss) Per Share from Continuing Operations
0.02
0.02
(0.54)
(2.98)
Adjustments Per Share:
Restructuring Charge
0.01
-
0.18
-
Accretion of Non-Cash Interest
-
0.01
0.03
0.08
Antitrust Legal Expenses
-
-
-
0.07
Impairment Charge
0.03
-
0.07
0.01
Union/Other Severance
-
-
0.01
0.08
Loss (Gain) on Change in Value of Debt Conversion Features
-
-
-
(1.01)
Loss (Gain) on Conversion of Debt/Other Refinancing Costs
-
-
-
1.99
Tax Impact of Adjustments
-
-
(0.02)
(0.01)
Total Adjustments
0.04
0.01
0.27
1.21
Diluted Adjusted Net Income (Loss) Per Share from Continuing Operations
$ 0.06
$ 0.03
$ (0.27)
$ (1.77)
Horizon Lines, Inc.
EBITDA and Adjusted EBITDA Reconciliation
(in thousands)
Quarter Ended
September 22, 2013
Quarter Ended
September 23, 2012
Nine Months Ended
September 22, 2013
Nine Months Ended
September 23, 2012
Net Income (Loss)
$ 4,080
$ 1,857
$ (17,774)
$ (76,723)
Net Income (Loss) from Discontinued Operations
2,477
414
1,548
(20,228)
Net Income (Loss) from Continuing Operations
1,603
1,443
(19,322)
(56,495)
Interest Expense, Net
17,015
13,808
49,649
49,036
Income Tax Benefit
(729)
(2,150)
(603)
(1,805)
Depreciation and Amortization
13,437
13,273
38,796
40,705
EBITDA
31,326
26,374
68,520
31,441
Restructuring Charge
1,042
-
6,294
-
Antitrust Legal Expenses
18
234
266
1,418
Impairment Charge
2,619
-
2,637
257
Union/Other Severance
9
234
327
1,513
Loss (Gain) on Change in Value of Debt Conversion Features
23
(255)
(136)
(19,385)
Loss (Gain) on Conversion of Debt/Other Refinancing Costs
-
391
(5)
37,761
Adjusted EBITDA
$ 35,037
$ 26,978
$ 77,903
$ 53,005
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 to facilitate internal comparisons to competitors' results and the marine container shipping and logistics industry in general. Adjusted EBITDA excludes certain charges in order to evaluate our operating performance, and when determining the payment of discretionary bonuses.
Horizon Lines, Inc.
2013 Estimated EBITDA and Adjusted EBITDA Reconciliation
(in thousands)
2013
Net Loss
$ (39,593) - (31,593)
Net Income from Discontinued Operations
1,548
Net Loss from Continuing Operations
(41,141) - (33,141)
Interest Expense, Net
67,000
Tax Benefit
(655)
Depreciation and Amortization
52,100
EBITDA
77,304 - 85,304
Impairment Charges
2,637
Restructuring Charges/Severance
6,800
Antitrust Legal Expenses
400
Gain on Conversion of Debt/Other Refinancing Costs
(136)
Gain on Change in Value of Debt Conversion Features
(5)
Adjusted EBITDA
$ 87,000 - 95,000
SOURCE Horizon Lines, Inc.
Copyright 2013 PR Newswire
(0)
(0)Scroll down for more posts ▼