Horizon Lines, Inc.
reported results for the third quarter ended September 25, 2005, with solid quarter-over-quarter growth in key financial
Operating revenue for the third quarter of 2005 was $289.1 million, an
increase of $38.0 million or 15.1% from the $251.1 million for the third
quarter of 2004. The improvement was led by volume growth, increased bunker
fuel surcharges to offset rising fuel costs, cargo mix and rate improvement,
new vessel management contracts and growth in other non-transportation
Operating income was $18.4 million in the 2005 third quarter compared to
$27.4 million for the same period last year. The decline in operating income
was primarily attributable to non-recurring expenses associated with the
Company's initial public offering (IPO), and higher non-cash amortization
expense resulting from the purchase price accounting basis step-up
intangible assets associated with the July 2004 acquisition of the Company.
Results for the third quarter included non-recurring expenses related to
the IPO for management fees, non-cash stock compensation expenses and
transaction expenses totaling $11.3 million. In addition, non-cash
amortization of intangible assets increased by $4.2 million in the third
quarter of 2005, compared to 2004. Absent these non-recurring IPO related
expenses and the increase in amortization expense, third quarter 2005
operating income would have been $33.9 million, an increase of $5.9 million
over third quarter 2004 on a comparable basis.
Net income for the 2005 third quarter, which includes the above mentioned
items, was $3.2 million compared to $11.3 million for the third quarter of
2004. Basic earnings per share for the third quarter of 2005 was $.14. Basic
earnings per share on a pro forma basis would have been $.37, adjusted to give
effect to the consummation of the issuance and sale of the Company of the
shares of its common stock pursuant to its initial public offering, use of
proceeds therefrom, and the related transactions, as if they occurred as of
December 27, 2004.