Costs associated with layoffs and a hefty legal bill connected with its ongoing antitrust troubles have led to losses at Horizon Lines.
An accounting write-down of goodwill and intangible assets, costs associated with layoffs and a hefty legal bill connected with its ongoing antitrust troubles have led to losses at Horizon Lines in the fourth quarter.
The fourth quarter net loss of $18.8m includes total one-offs of $32.4m, including the $25.4m impairment charge on intangibles, $3.2m on Horizon"s non-union workforce reduction and $3.8m in legal fees.
The company had earned a net profit of $10.7m in the fourth quarter of 2007.Annual net profit for 2008 fell to one-ninth of a year ago, to $3.1m. Annual revenues were up to $1.3bn from $1.2bn a year ago.
Economic woes factored into the numbers, Horizon said. Horizon Lines is the only Jones Act container line to be active in all lanes. Of these, the company said Puerto Rico was in the third year of recession, while Hawaii continued a sharp downturn. Only Alaska showed a slight volume increase.
?We faced an extremely challenging environment in the fourth quarter, but we performed well under the circumstances,? said Horizon chairman and chief executive Chuck Raymond.
Horizon remained committed to cost-cutting and was actively considering scrapping a spare vessel to save $700,000 a year on lay-up costs and generate $1m in sale proceeds, Mr Raymond said.
Horizon"s previously announced round of employee layoffs saw its non-union permanent, temporary and consultant workforce cut by more than 16%, with annual savings estimated at $11m.