Horizon Lines, Inc. reported financial results for the fiscal first quarter ended March 27, 2011.

As a result of previously announced plans to discontinue the logistics business, financial results are being presented on a continuing operations basis, excluding the discontinued logistics operations.

On a GAAP basis, the first-quarter net loss from continuing operations totaled $33.3 million, or $1.08 per diluted share, on revenue from continuing operations of $285.4 million.' On an adjusted basis, the first-quarter net loss from continuing operations totaled $28.0 million, or $0.90 per diluted share, after excluding charges totaling $5.4 million after tax, or $0.18 per diluted share. The charges include $2.3 million associated with a severance agreement, $2.2 million for antitrust-related legal fees, $0.6 million for a loss on modification of debt, $0.5 million for the early retirement of certain union employees, and a tax impact of $(0.2) million.

In the year-ago first quarter, Horizon Lines reported a net loss from continuing operations of $11.7 million, or $0.38 per diluted share, on revenue of $274.7 million.' On an adjusted basis, the net loss totaled $10.5 million, or $0.34 per diluted share, after excluding antitrust-related legal expenses and costs for early retirement of certain union employees totaling $1.2 million, or $0.04 per share.

Container volume for the 2011 first quarter totaled 71,529 loads, an 18.6% increase from 60,288 loads for the same period a year ago.' The additional volume was due largely to the company's new China service, which began operating in December 2010.' Excluding China, volume totaled 60,330 loads, an increase of 60 loads, or 0.1%, from 60,270 loads a year ago. 'Relative to the 2010 first quarter, volumes were up in Alaska and Guam, flat in Puerto Rico, and down in Hawaii.

Container rates, net of fuel, for the 2011 first quarter fell 6.4% to $3,072 from $3,283 a year ago. The decline was due to the addition of China volume with lower rates and pricing pressures in Puerto Rico.' Excluding China, container rates, net of fuel, rose 1.2% to $3,324 in the first quarter from a year ago.

The company's vessels delivered 75% on-time performance, measured to the minute, in the first quarter, four percentage points above the 71% on-time performance recorded in the same quarter a year ago.' Vessel utilization was 58%, compared with 60% in 2010, while vessel availability remained near 100%, driven by the company's comprehensive fleet maintenance program.

'"As anticipated, the first quarter was very challenging," said Stephen H. Fraser, President and Chief Executive Officer. "The historically soft quarter was additionally impacted by the termination of various Maersk agreements, and the seasonal slowness associated with the start-up of our new China service in the post Chinese New Year period.' 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.

"We have responded to these volatile conditions by intensely focusing on cost management and customer service," Mr. Fraser continued.' "Already, we have achieved more than $18 million in annualized cost savings by reaching agreements with our vessel union partners, reducing our non-union workforce, generating rate and efficiency savings from our trucking partners, and modifying vessel leases, among other initiatives. Our quality of service has not faltered and we are pleased to have received overwhelming customer support as we work to refinance our debt and position our company for long-term success."