Attached files
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EX-99.2 - EX-99.2 - Horizon Lines, Inc. | g26266exv99w2.htm |
EX-99.1 - EX-99.1 - Horizon Lines, Inc. | g26266exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 2011
HORIZON LINES, INC.
(Exact name of registrant as specified in its Charter)
Delaware | 001-32627 | 74-3123672 | ||
(State or Other Jurisdiction of Organization) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
4064 Colony Road, Suite 200
Charlotte, North Carolina 28211
(Address of Principal Executive Offices, including Zip Code)
Charlotte, North Carolina 28211
(Address of Principal Executive Offices, including Zip Code)
(704) 973-7000
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
Horizon Lines, Inc. entered into a plea agreement, dated February 23, 2011, with the United States
of America, under which the Company will plead guilty to a charge of violating federal antitrust
laws solely with respect to the Puerto Rico tradelane. The Company agreed to pay a fine of $45
million over five years without interest, and the Company will record a charge of $30.0 million
against results of operations for its fiscal year ended December 26, 2010, as a reserve for the
payment of the fine, which represents the present value of the expected payments.
A copy of the press release describing the resolution with the Department of Justice is attached as
Exhibit 99.1 hereto, and the information under the heading DOJ Plea Agreement and Civil Antitrust
Update is herein incorporated by reference.
On February 22, 2011, the Company and two other companies providing ocean shipping services in the
Puerto Rico tradelane entered into a Memorandum of Understanding with the Commonwealth of Puerto
Rico and attorneys representing a putative class of indirect purchasers. Under the Memorandum of
Understanding, the Company has agreed to resolve all of the alleged claims of the Commonwealth of
Puerto Rico and the indirect purchasers related to ocean shipping services in the Puerto Rico
tradelane. Pursuant to the Memorandum of Understanding, the parties will enter into a settlement
agreement pursuant to which the Company will agree to pay a total of $1,766,667 as its share of the
settlement amount in exchange for a full release. Such settlement agreement, when negotiated and
entered into by the parties, will be subject to court approval.
Item 2.02. Results of Operation and Financial Condition.
On February 24, 2011, the Company issued a press release announcing certain preliminary financial
results for the fiscal year ended December 26, 2010. A copy of the press release is attached as
Exhibit 99.1 hereto and is incorporated herein by reference.
The information under Item 2.02 and 7.01 under this Current Report, and the information in Exhibit
99.1, except under the heading DOJ Plea Agreement and Civil Antitrust Update, are being furnished
and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, nor shall this information be deemed incorporated by reference into any registration
statement or any other document pursuant to the Securities Act of 1933, as amended, except as shall
be expressly set forth by specific reference in such a filing.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(b) and
(c) On February 23, 2011, the Board of Directors of the Company named Alex J. Mandl as
independent Chairman of the Board, effective March 11, 2011, and the Company appointed Stephen H.
Fraser as the interim President and Chief Executive Officer, to succeed Charles T. Raymond in that
position when he retires effective March 11, 2011.
In addition, the Company named Brian W. Taylor as Executive Vice President and Chief Operating
Officer, to succeed John V. Keenan, who has been granted a leave of absence. The Company also
promoted Michael T. Avara from Senior Vice President and Chief Financial Officer to Executive Vice
President and Chief Financial Officer. Both changes are effective March 11, 2011.
Mr. Mandl, age 67, has served as a Director of the company since June 2007. Mr. Mandl has been the
Chairman of the Board of Gemalto, a global leader in digital security, since December 2007. From
June 2006 to November 2007, he was the Executive Chairman of Gemalto. Mr. Mandl also serves as the
President and CEO and a member of the Board of Gemplus, positions he held since August 2002. He has
served as a principal in ASM Investments, a company focusing on technology investments, since April
2001. Mr. Mandl currently serves on the boards of Gemalto and Dell Inc. Mr. Mandl holds an MBA
from the University of California at Berkeley and a BA in economics from Willamette University.
Mr. Fraser, age 53, has served as a Director of the company since June 2010. From September 2008 to
December 2009, he served as Executive Vice President, Corporate Strategy, at GENCO Supply Chain
Solutions, where he also served as CEO of GENCOs three reverse logistics business units. From May
2000 to January 2008, Mr. Fraser was President and CEO of May Logistics Services and ADS Logistics,
two logistics companies with common ownership. He serves on the boards of Nautilus Holding
Corporation and Focus Products Group. Mr. Fraser holds a BA in Economics and Political Science from
Columbia University.
Mr. Taylor, age 51, previously served as Senior Vice President, Chief Commercial Officer since
December 2010. From January 2010 to December 2010, he served as the Companys Senior Vice
President, International Services and as President of Horizon Logistics Holdings, LLC from August
2007, and Senior Vice President, Sales and Marketing, of the Company from February 2006 through
August 2007. He served as Vice President and General Manager, Hawaii and Guam, of the Company from
June 2000 through January 2006. He received his Bachelor of Commerce and Master of Business
Administration in Economics and Financial Management from Concordia University.
Mr. Avara, age 52, has served as Senior Vice President and Chief Financial Officer of the Company
since 2008. Previously, he served as Vice President, Investor Relations and Treasurer of the
Company from September 2007. Mr. Avara served as Treasurer of the Company from March 2004 through
August 2007, as Vice President, Investor Relations, of the Company from March 2005 through August
2007. Mr. Avara received both a MBA in Finance and a BA in Accounting from Loyola College in
Baltimore, Maryland.
(e) On February 23, 2011, the Company and Mr. Raymond entered into a Separation Agreement,
dated as of such date, in connection with Mr. Raymonds retirement from the
Company as described in Item 5.02(b) of this report. Mr. Raymond has until March 3, 2011 to revoke
certain terms of the Agreement. In the event that Mr. Raymond does not exercise his right to
revoke certain terms of the Agreement, he will become entitled to payment under the Separation
Agreement on March 3, 2011. Under the terms of the Separation Agreement, Mr. Raymond will receive
severance payments totaling $2,281,994. The first seven equal monthly
installments of $140,000
per month will be followed by eighteen equal monthly installments of $72,333. In addition, the
Company will reimburse Mr. Raymond for premiums related to continued health coverage under COBRA
for the period he and his eligible dependents are covered under COBRA. Mr. Raymond will also be
entitled to indemnification and the advancement of legal expenses as provided by the Companys
charter and bylaws and any other applicable documents, and Mr. Raymond has agreed not to sell any shares of the Companys common stock
that he owns for a period of one year.
In
addition, Mr. Keenan currently has an employment agreement with
the Company, and
in connection with Mr. Keenans leave of absence, the
Company agreed that the term of the employment agreement would
continue during the time he is on leave, subject to earlier termination by the Company or Mr. Keenan as otherwise
provided in the employment agreement. The Company also agreed that if Mr. Keenans employment is terminated prior to February 23, 2012 without
Cause, as that term is defined in his employment agreement, the
Company will pay Mr. Keenan an additional 50% of the
severance payment required by the employment agreement.
Item 7.01. Regulation FD Disclosure.
The disclosure under Item 2.02 of this Current Report on Form 8-K is incorporated herein by
reference. In addition, a copy of the press release announcing the matters described in Items
5.02(b) and (c) of this report is furnished herewith as Exhibit 99.2 and incorporated herein by
reference.
Item 8.01. Other Events.
On February 24, 2011, the Company issued a press release announcing that its Board of Directors has
voted to suspend all cash dividends on the Companys outstanding common stock.
SAFE HARBOR STATEMENT
The information contained in this Current Report on Form 8-K (including the exhibits hereto) should
be read in conjunction with our filings made with the Securities and Exchange Commission. This
Current Report on Form 8-K (including the exhibits hereto) contains forward-looking statements
within the meaning of the federal securities laws. These forward-looking statements are intended
to qualify for the safe harbor from liability established by the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are those that do not relate solely to historical
fact. They include, but are not limited to, any statement that may predict, forecast, indicate or
imply future results, performance, achievements or events. Words such as, but not limited to,
will, seeking, scheduled, expects, anticipates and similar expressions or phrases
identify forward-looking statements.
All forward-looking statements involve risk and uncertainties. Factors that may cause expected
results or other anticipated events or circumstances discussed in this press release to not occur
or to differ from expected results include: failure by us or the DOJ to comply with the terms of
the plea agreement; court disapproval of the plea agreement; any new developments relating to
antitrust matters in any of our trades; court disapproval of the class-action settlements in Puerto
Rico; decreases in shipping volumes; volatility in fuel prices; our substantial debt; restrictive
covenants under our debt agreements; or the loss of our key management personnel.
In light of these risks and uncertainties, expected results or other anticipated events or
circumstances discussed in this current report might not occur. We undertake no obligation, and
specifically decline any obligation, to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise. See the section entitled Risk
Factors in our Form 10-K filed with the SEC on February 4, 2010, and in our Form 10-Q for the
period ended June 20, 2010, for a more complete discussion of these risks and uncertainties and for
other risks and uncertainties. Those factors and the other risk factors described therein are not
necessarily all of the important factors that could cause actual results or developments to differ
materially from those expressed in any of our forward-looking statements. Other unknown or
unpredictable factors also could harm our results. Consequently, there can be no assurance that
actual results or developments anticipated by us will be realized or, even if substantially
realized, that they will have the expected consequences.
NON-GAAP FINANCIAL MEASURES
Item 2.02 and 7.01, and Exhibit 99.1 hereto, contain the financial measure adjusted EBITDA.
Adjusted EBITDA is a non-GAAP financial measures within the meaning of Regulation G promulgated by
the Securities and Exchange Commission.
The Company defines adjusted EBITDA as net income plus net interest expense, income taxes,
depreciation and amortization adjusted to exclude unusual items, and the Company believes that this
non-GAAP financial measure provides information that is useful to the Companys investors. The
Company believes that this information is helpful in understanding period-over-period operating
results separate and apart from items that may, or could, have a disproportional positive or
negative impact on the Companys results of operations in any particular period. Additionally, the
Company uses this non-GAAP measures to evaluate its past performance and prospects for future
performance.
The financial measure, adjusted EBITDA, is not a recognized term under GAAP and does not
purport to be an alternative to net income or as a measure of earnings. Because all companies do
not use identical calculations, this presentation of a non-GAAP financial measure may not be
comparable to other similarly titled measures of other companies.
Reconciliation of adjusted EBITDA to the most directly comparable GAAP measure is provided in
the press release filed as Exhibits 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 | Press Release of Horizon Lines, Inc. dated February 24, 2011. |
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99.2 | Press Release of Horizon Lines, Inc. dated February 24, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HORIZON LINES, INC. (Registrant) |
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Date: February 24, 2011 | By: | /s/ Michael T. Avara | ||
Michael T. Avara | ||||
Senior Vice President and Chief Financial Officer |
Exhibit Index
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 | Press Release of Horizon Lines, Inc. dated February 24, 2011. |
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99.2 | Press Release of Horizon Lines, Inc. dated February 24, 2011. |