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SECURITIES AND EXCHANGE COMMISSION
þ | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 74-3123672 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
4064 Colony Road, Suite 200, Charlotte, North Carolina | 28211 | |
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
Large accelerated filerþ | Accelerated filero | Non-accelerated filero | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
Yeso Noþ
Form 10-Q/A Index
Page No. | ||||||||
3 | ||||||||
Part I. Financial Information | ||||||||
3 | ||||||||
Part II. Other Information | ||||||||
19 | ||||||||
20 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
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EXPLANATORY NOTE
Horizon Lines, Inc. is filing this amendment (the “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarter ended June 22, 2008 (the “Form 10-Q), filed with the U.S. Securities and Exchange Commission (“SEC”) on July 25, 2008, solely to correct typographical errors in the Outlook on page 28 of that Form 10-Q in “Part 1 – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
The Form 10-Q erroneously stated that we expect 2008 earnings per share of $1.16 — $1.43, excluding any costs related to the Department of Justice antitrust investigation and related legal proceedings and a $0.8 million severance charge for several union employees who elected early retirement. The expected 2008 earnings per share range should be from $1.03 — $1.43.
The Form 10-Q also erroneously stated that including estimated legal expenses and severance costs, we expect earnings per share of $0.97 — $1.24. The expected earnings per share range, including those expenses and costs, should be from $0.84 — $1.24.
This Form 10-Q/A should be read in conjunction with the original Form 10-Q, continues to speak as of the date of the Form 10-Q, and does not modify or update disclosures in the original Form 10-Q except as noted above. Accordingly, this Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update any related disclosures. In particular, any forward-looking statements included in this Form 10-Q/A represent management’s view as of the filing date of the Form 10-Q.
Quarters Ended | Six Months Ended | |||||||||||||||
June 22, | June 24, | June 22, | June 24, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
($ in thousands) | ||||||||||||||||
Operating revenue | $ | 330,958 | $ | 295,701 | $ | 636,905 | $ | 569,365 | ||||||||
Operating expense | 314,274 | 272,796 | 608,620 | 529,981 | ||||||||||||
Operating income | $ | 16,684 | $ | 22,905 | $ | 28,285 | $ | 39,384 | ||||||||
Operating ratio | 95.0 | % | 92.3 | % | 95.6 | % | 93.1 | % | ||||||||
Revenue containers (units) | 71,169 | 72,894 | 137,399 | 139,815 |
Quarters Ended | Six Months Ended | |||||||||||||||
June 22, | June 24, | June 22, | June 24, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 7,235 | $ | 9,560 | $ | 9,326 | $ | 16,612 | ||||||||
Interest expense, net | 8,147 | 11,663 | 17,156 | 22,876 | ||||||||||||
Income tax expense (benefit) | 1,298 | 1,093 | 1,802 | (691 | ) | |||||||||||
Depreciation and amortization | 15,950 | 17,142 | 31,650 | 34,369 | ||||||||||||
EBITDA | $ | 32,630 | $ | 39,458 | $ | 59,934 | $ | 73,166 | ||||||||
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Quarters Ended | ||||||||||||||||
June 22, | June 24, | |||||||||||||||
2008 | 2007 | Change | % Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Operating revenue | $ | 322,170 | $ | 294,229 | $ | 27,941 | 9.5 | % | ||||||||
Operating expense: | ||||||||||||||||
Vessel | 109,943 | 93,158 | 16,785 | 18.0 | % | |||||||||||
Marine | 50,969 | 48,226 | 2,743 | 5.7 | % | |||||||||||
Inland | 53,086 | 49,569 | 3,517 | 7.1 | % | |||||||||||
Land | 37,119 | 31,569 | 5,550 | 17.6 | % | |||||||||||
Rolling stock rent | 10,830 | 10,988 | (158 | ) | (1.4 | )% | ||||||||||
Cost of services | 261,947 | 233,510 | 28,437 | 12.2 | % | |||||||||||
Depreciation and amortization | 10,817 | 10,150 | 667 | 6.6 | % | |||||||||||
Amortization of vessel dry-docking | 4,400 | 4,559 | (159 | ) | (3.5 | )% | ||||||||||
Selling, general and administrative | 26,262 | 20,569 | 5,693 | 27.7 | % | |||||||||||
Miscellaneous expense (income), net | 716 | (350 | ) | 1,066 | 304.6 | % | ||||||||||
Total operating expense | 304,142 | 268,438 | 35,704 | 13.3 | % | |||||||||||
Operating income | $ | 18,028 | $ | 25,791 | $ | (7,763 | ) | (30.1 | )% | |||||||
Operating ratio | 94.4 | % | 91.2 | % | 3.2 | % | ||||||||||
Revenue containers (units) | 71,169 | 72,894 | (1,725 | ) | (2.4 | )% |
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Bunker and intermodal fuel surcharges included in rates | $ | 18,352 | ||
General rate increases | 6,754 | |||
Increase in non-transportation services | 4,614 | |||
Revenue related to acquisition of HSI | 4,449 | |||
Revenue container volume decrease | (6,228 | ) | ||
Total operating revenue increase | $ | 27,941 | ||
Vessel fuel costs increase | $ | 16,303 | ||
Vessel lease expense increase | 2,061 | |||
Labor and other vessel operating decrease | (1,579 | ) | ||
Total vessel expense increase | $ | 16,785 | ||
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Quarters Ended | ||||||||||||
June 22, | June 24, | |||||||||||
2008 | 2007 | % Change | ||||||||||
(in thousands) | ||||||||||||
Land expense: | ||||||||||||
Maintenance | $ | 13,549 | $ | 12,340 | 9.8 | % | ||||||
Terminal overhead | 14,793 | 12,095 | 22.3 | % | ||||||||
Yard and gate | 6,585 | 5,462 | 20.6 | % | ||||||||
Warehouse | 2,192 | 1,672 | 31.1 | % | ||||||||
Total land expense | $ | 37,119 | $ | 31,569 | 17.6 | % | ||||||
Quarters Ended | ||||||||||||
June 22, | June 24, | |||||||||||
2008 | 2007 | % Change | ||||||||||
(in thousands) | ||||||||||||
Depreciation and amortization: | ||||||||||||
Depreciation—owned vessels | $ | 2,554 | $ | 2,723 | (6.2 | )% | ||||||
Depreciation and amortization—other | 3,184 | 2,537 | 25.5 | % | ||||||||
Amortization of intangible assets | 5,079 | 4,890 | 3.9 | % | ||||||||
Total depreciation and amortization | $ | 10,817 | $ | 10,150 | 6.6 | % | ||||||
Amortization of vessel dry-docking | $ | 4,400 | $ | 4,559 | (3.5 | )% | ||||||
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Quarters Ended | ||||||||||||||||
June 22, | June 24, | |||||||||||||||
2008 | 2007 | Change | % Change | |||||||||||||
(in thousands) | ||||||||||||||||
Operating revenue | $ | 8,788 | $ | 1,472 | $ | 7,316 | 497.0 | % | ||||||||
Operating expense: | ||||||||||||||||
Inland | 5,992 | 459 | 5,533 | 1,205.4 | % | |||||||||||
Land | 657 | 476 | 181 | 38.0 | % | |||||||||||
Rolling stock rent | 103 | — | 103 | 100.0 | % | |||||||||||
Cost of services | 6,752 | 935 | 5,817 | 622.1 | % | |||||||||||
Depreciation and amortization | 733 | 2,433 | (1,700 | ) | (70.0 | )% | ||||||||||
Selling, general and administrative | 2,611 | 941 | 1,670 | 177.5 | % | |||||||||||
Miscellaneous expense, net | 36 | 49 | (13 | ) | (26.5 | )% | ||||||||||
Total operating expense | 10,132 | 4,358 | 5,774 | 132.5 | % | |||||||||||
Operating loss | $ | (1,344 | ) | $ | (2,886 | ) | $ | 1,542 | 53.4 | % | ||||||
Quarters Ended | ||||||||||||
June 22, | June 24, | |||||||||||
2008 | 2007 | % Change | ||||||||||
(in thousands) | ||||||||||||
Depreciation and amortization: | ||||||||||||
Depreciation and amortization—other | $ | 489 | $ | 2,433 | (80.0 | )% | ||||||
Amortization of intangible assets | 244 | — | 100.0 | % | ||||||||
Total depreciation and amortization | $ | 733 | $ | 2,433 | (70.0 | )% | ||||||
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Six Months Ended | ||||||||||||||||
June 22, | June 24, | |||||||||||||||
2008 | 2007 | Change | % Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Operating revenue | $ | 620,015 | $ | 566,322 | $ | 53,693 | 9.5 | % | ||||||||
Operating expense: | ||||||||||||||||
Vessel | 213,370 | 175,880 | 37,490 | 21.3 | % | |||||||||||
Marine | 100,196 | 93,992 | 6,204 | 6.6 | % | |||||||||||
Inland | 100,098 | 95,214 | 4,884 | 5.1 | % | |||||||||||
Land | 72,321 | 63,101 | 9,220 | 14.6 | % | |||||||||||
Rolling stock rent | 22,837 | 22,010 | 827 | 3.8 | % | |||||||||||
Cost of services | 508,822 | 450,197 | 58,625 | 13.0 | % | |||||||||||
Depreciation and amortization | 21,426 | 21,223 | 203 | 1.0 | % | |||||||||||
Amortization of vessel dry-docking | 8,775 | 8,319 | 456 | 5.5 | % | |||||||||||
Selling, general and administrative | 48,884 | 41,680 | 7,204 | 17.3 | % | |||||||||||
Miscellaneous expense, net | 1,230 | 2 | 1,228 | 61,400 | % | |||||||||||
Total operating expense | 589,137 | 521,421 | 67,716 | 13.0 | % | |||||||||||
Operating income | $ | 30,878 | $ | 44,901 | $ | (14,023 | ) | (31.2 | )% | |||||||
Operating ratio | 95.0 | % | 92.1 | % | 3.1 | % | ||||||||||
Revenue containers (units) | 137,399 | 139,815 | (2,416 | ) | (1.7 | )% |
Bunker and intermodal fuel surcharges included in rates | $ | 32,912 | ||
General rate increases | 13,771 | |||
Revenue related to acquisition of HSI | 8,646 | |||
Increase in non-transportation services | 7,059 | |||
Revenue container volume decrease | (8,695 | ) | ||
Total operating revenue increase | $ | 53,693 | ||
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Vessel fuel costs increase | $ | 31,593 | ||
Vessel lease expense increase | 8,203 | |||
Labor and other vessel operating decrease | (2,306 | ) | ||
Total vessel expense increase | $ | 37,490 | ||
Six Months Ended | ||||||||||||
June 22, | June 24, | |||||||||||
2008 | 2007 | % Change | ||||||||||
(in thousands) | ||||||||||||
Land expense: | ||||||||||||
Maintenance | $ | 26,112 | $ | 24,382 | 7.1 | % | ||||||
Terminal overhead | 28,677 | 24,184 | 18.6 | % | ||||||||
Yard and gate | 13,477 | 11,203 | 20.3 | % | ||||||||
Warehouse | 4,055 | 3,332 | 21.7 | % | ||||||||
Total land expense | $ | 72,321 | $ | 63,101 | 14.6 | % | ||||||
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Six Months Ended | ||||||||||||
June 22, | June 24, | |||||||||||
2008 | 2007 | % Change | ||||||||||
(in thousands) | ||||||||||||
Depreciation and amortization: | ||||||||||||
Depreciation—owned vessels | $ | 5,051 | $ | 5,452 | (7.4 | )% | ||||||
Depreciation and amortization—other | 6,220 | 5,990 | 3.8 | % | ||||||||
Amortization of intangible assets | 10,155 | 9,781 | 3.8 | % | ||||||||
Total depreciation and amortization | $ | 21,426 | $ | 21,223 | 1.0 | % | ||||||
Amortization of vessel dry-docking | $ | 8,775 | $ | 8,319 | 5.5 | % | ||||||
Six Months Ended | ||||||||||||||||
June 22, | June 24, | |||||||||||||||
2008 | 2007 | Change | % Change | |||||||||||||
(in thousands) | ||||||||||||||||
Operating revenue | $ | 16,890 | $ | 3,043 | $ | 13,847 | 455.0 | % | ||||||||
Operating expense: | ||||||||||||||||
Inland | 11,375 | 967 | 10,408 | 1,076.3 | % | |||||||||||
Land | 1,262 | 964 | 298 | 30.9 | % | |||||||||||
Rolling stock rent | 210 | — | 210 | 100.0 | % | |||||||||||
Cost of services | 12,847 | 1,931 | 10,916 | 565.3 | % | |||||||||||
Depreciation and amortization | 1,449 | 4,827 | (3,378 | ) | (70.0 | )% | ||||||||||
Selling, general and administrative | 5,120 | 1,723 | 3,397 | 197.2 | % | |||||||||||
Miscellaneous expense, net | 67 | 79 | (12 | ) | (15.2 | )% | ||||||||||
Total operating expenses | 19,483 | 8,559 | 10,924 | 127.6 | % | |||||||||||
Operating loss | $ | (2,593 | ) | $ | (5,517 | ) | $ | 2,924 | 53.0 | % | ||||||
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Six Months Ended | ||||||||||||
June 22, | June 24, | |||||||||||
2008 | 2007 | % Change | ||||||||||
(in thousands) | ||||||||||||
Depreciation and amortization: | ||||||||||||
Depreciation and amortization—other | $ | 941 | $ | 4,827 | (80.5 | )% | ||||||
Amortization of intangible assets | 508 | — | 100.0 | % | ||||||||
Total depreciation and amortization | $ | 1,449 | $ | 4,827 | (70.0 | )% | ||||||
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Decrease in vessel payments in excess of accrual | $ | 20,669 | ||
Increase in accounts payable and accrued liabilities, net | 11,819 | |||
Decrease in management bonus payments in excess of accrual | 12,998 | |||
Decrease in accounts receivable | 6,053 | |||
Other increases in working capital, net | 5,214 | |||
Earnings adjusted for non-cash charges | (11,189 | ) | ||
$ | 45,564 | |||
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• | Prior to May 15, 2012, if during any calendar quarter, and only during such calendar quarter, if the last reported sale price of the Company’s common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter exceeds 120% of the applicable conversion price in effect on the last trading day of the immediately preceding calendar quarter; | |
• | Prior to May 15, 2012, if during the five business day period immediately after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock on such date and the conversion rate on such date; | |
• | If, at any time, a change in control occurs or if the Company is a party to a consolidation, merger, binding share exchange or transfer or lease of all or substantially all of its assets, pursuant to which the Company’s common stock would be converted into cash, securities or other assets; or | |
• | At any time after May 15, 2012 through the fourth scheduled trading day immediately preceding August 15, 2012. |
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Quarter Ended | Six Months Ended | |||||||
June 22, 2008 | June 22, 2008 | |||||||
Pretax income | $ | 8,533 | $ | 11,128 | ||||
Interest expense | 8,216 | 17,259 | ||||||
Rentals | 8,738 | 17,691 | ||||||
Total fixed charges | $ | 16,954 | $ | 34,950 | ||||
Pretax earnings plus fixed charges | $ | 25,487 | $ | 46,078 | ||||
Ratio of earnings to fixed charges | 1.50 | x | 1.32 | x |
Quarter Ended June 22, 2008 | Six Months Ended June 22, 2008 | |||||||||||||||||||||||
As | As | As | As | |||||||||||||||||||||
Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||
Interest expense, net | $ | 8,147 | $ | 2,206 | $ | 10,353 | $ | 17,156 | $ | 4,357 | $ | 21,513 | ||||||||||||
Income tax expense | 1,298 | (829 | ) | 469 | 1,802 | (1,638 | ) | 164 | ||||||||||||||||
Net income | 7,235 | (1,377 | ) | 5,858 | 9,326 | (2,719 | ) | 6,607 | ||||||||||||||||
Net income per share | ||||||||||||||||||||||||
Basic | 0.24 | (0.05 | ) | 0.19 | 0.31 | (0.09 | ) | 0.22 | ||||||||||||||||
Diluted | 0.24 | (0.05 | ) | 0.19 | 0.31 | (0.09 | ) | 0.22 |
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Year Ended December 23, 2007 | ||||||||||||
As | As | |||||||||||
Reported | Adjustments | Adjusted | ||||||||||
Interest expense, net | $ | 41,672 | $ | 3,204 | $ | 44,876 | ||||||
Income tax benefit | (13,983 | ) | (1,205 | ) | (15,188 | ) | ||||||
Net income | 28,859 | (1,999 | ) | 26,860 | ||||||||
Net income per share | ||||||||||||
Basic | 0.87 | (0.06 | ) | 0.81 | ||||||||
Diluted | 0.85 | (0.06 | ) | 0.79 |
Fiscal Year | ||||
2008 | $ | 8,901 | ||
2009 | 10,011 | |||
2010 | 11,060 | |||
2011 | 11,765 | |||
2012 | 4,821 |
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31.1* | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Filed herewith. |
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HORIZON LINES, INC. | ||||
By: | /s/ MICHAEL T. AVARA | |||
Michael T. Avara | ||||
Senior Vice President & Chief Financial Officer (Principal Financial Officer & Authorized Signatory) |
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Exhibit | ||
No. | Description | |
31.1* | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Filed herewith. |
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