Horizon Lines counts cost of IPO as profits drop 72%
U.S. Jones Act carrier Horizon Lines said Tuesday that costs related to its recent initial public offering dented its net income, which dropped 72 percent to $3.2 million from $11.3 million posted in the same quarter last year.
Horizon Lines said its third quarter results included $11.3 million in non-recurring expenses related to the IPO for management fees, non-cash stock compensation expenses and transaction expenses.
The Charlotte, N.C.-based carrier’s operating income in the latest quarter slumped 33 percent to $18.4 million from $27.4 million. Revenue improved 15 percent to $289.1 million from $251.1 million.
“This was a very good quarter for Horizon Lines. The economic climate in all three of our trades continued to exhibit steady growth,” said Chuck Raymond, president and chief executive officer.
Horizon Lines said it will use the IPO proceeds to redeem $62.2 million of preferred stock, and pay down $96.2 million of debt by the end of this month.
“The use of IPO proceeds to pay down debt will improve our balance sheet and reduce interest costs commencing in the fourth quarter,” Raymond said.
For the year-to-date, Horizon Lines reported a net income of $16.9 million, compared to deficit of $11 million after nine months last year. Operating income declined 26 percent to $34.2 million, from $46.4 million last year. Revenue improved 16 percent to $817.2 million from $706.9 million.