Horizon Lines’ said its net loss widened to $33.3 million in the first quarter from $11.7 million during the same period a year earlier because of host of factors, including a decline in shipping volumes on its Hawaii route and previously announced plans to discontinue its logistics business.
Horizon attributed $5.4 million of the loss to costs associated with closing its logistics business, legal fees, and a debt modification plan. Excluding one-time charges Horizon said it lost $28 million in the quarter, or 90 cents a share, compared with a loss of $28 million, or 34 cents a share a year earlier.
“As anticipated, the first quarter was very challenging,” said Stephen Frazer, Horizon’s president and chief executive officer.
It what is traditionally a soft quarter for the shipping business Horizon also had to deal with the shut down of its logistics operations and the start-up of its new China service, he said.
“These factors were further exacerbated by a steep decline in international rates, a sharp rise in fuel prices, and the ongoing slow business conditions in Puerto Rico and Hawaii,” Frazer said.
Compared with the first quarter of 2010 container volumes were up in Alaska and Guam, flat in Puerto Rico, and down in Hawaii, according to Horizon.
The company said despite the decline in its Hawaii business it was optimistic about the future.
“The company believes the steady military sector and continuing strength in tourism, even in the wake of the Japan disaster, could lead to modest volume growth as the year progresses.”
Separately, Horizon Lines said yesterday that a federal court has reduced a criminal fine imposed on it for fixing shipping prices, easing concerns of a possible bankruptcy. The fine was reduced to $15 million from $45 million.
“The fine reduction…will facilitate our efforts to secure new long-term financing. We remain in constructive discussions as we continue to move forward with our refinancing efforts,” Chief Financial Officer Michael Avara said in a statement.
The reduced fine of $15 million is payable over five years without interest, the company said.
In February, the company had pleaded guilty to one felony count of fixing the price for shipping heavy equipment, medicine and other goods to Puerto Rico.
Horizon’s shares closed down 37 cents at $1.77 today on the New York Stock Exchange.