Horizon Lines Reports First-Quarter Financial Results

Horizon Lines, Inc. today reported financial results for the fiscal first quarter ended March 25, 2012. The company generated slightly improved revenue container volume in the first quarter relative to a year ago, despite challenges that included severe winter weather in Alaska, higher fuel prices and increased expenses. "Hawaii's performance improved significantly on solid customer support and an improving economy. Alaska's results were also better despite record cold and snowfall, which had a significant, adverse impact on customer demand and operations. Alaska was buoyed in part by domestic southbound volume that was driven by a strong seafood market. Earnings declined in Puerto Rico from the same period a year ago, due to continued slow business conditions and vessel service disruptions”, said Stephen H. Fraser, interim President and Chief Executive Officer. 

"In 2012, we are making significant investments in our Jones Act fleet with the dry-docking of three of our Puerto Rico vessels in Asia," Mr. Fraser said. "Although dry-docking our vessels in Asia will add considerable transit expense in 2012, it will also facilitate extensive maintenance and high-quality enhancements that are instrumental in helping maintain service integrity in the Puerto Rico market." 

First-Quarter 2012 Financial Highlights 

Unit revenue per container totaled $4,257 in the 2012 first quarter, compared with $3,896 a year ago. First-quarter unit revenue per container, net of fuel surcharges, was $3,225, up 1.0% from $3,192 a year ago. Bunker fuel costs averaged $693 per metric ton in the first quarter, 26.5% above the average price of $548 per ton in the same quarter a year ago. 

First-quarter operating revenue from continuing operations increased 9.4% to $263.4 million from $240.7 million a year ago. The GAAP operating loss from continuing operations for the first quarter totaled $6.1 million, compared with an operating loss of $9.4 million a year ago.

Outlook 

The company continues to project that 2012 container volumes will increase modestly, in the 1% to 2% range, and that container rates, net of fuel surcharges, will rise slightly from 2011 levels. Fuel prices for 2012 are currently projected in the $725-$730 per-ton range, excluding additional costs for low sulfur fuel that will be required in the Alaska tradelane, effective August 1, 2012. 

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. The company is based in Charlotte, NC.