The North Carolina-based company suspended its quarterly dividend effective immediately and said it was in discussions to sell its logistics business.
Separately, Horizon Lines said it named Stephen Fraser as its interim chief executive and president, succeeding Charles Raymond, who is retiring. Alex Mandl has been named as the chairman.
"The typically slow first quarter is expected to be exacerbated by the seasonality of the company's new China service, which replaces a more consistent month-to-month earnings stream produced by its previous space charter agreement with Maersk," Horizon Lines said in a statement.
The company said it does not expect to be in compliance with its existing financial covenants, but is seeking a credit agreement amendment to address the situation.
Horizon Lines will pay a $45 million fine for participating, the U.S. Justice Department said. The company said it will take a $30 million charge in the fiscal 2010 as a result.
Horizon Lines, which owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals, said it is in discussions with some of its lenders to waive a judgment default that will arise from the plea agreement.
It agreed to plead guilty to one felony count of fixing the price for shipping heavy equipment, medicine and other goods between the continental United States and Puerto Rico.
As a result of the fine, Horizon Lines was seeking to waive or satisfy the default conditions of its credit agreement.
The company participated in the conspiracy between at least May 2002 and April 2008, the department said.
Three former Horizon Lines executives and two former executives of Sea Star Line were sentenced to prison in 2008 as a result of the probe.
Horizon Lines said it was pleased to have the Justice Department probe resolved.
"We now look forward to moving ahead in our discussions with lenders," Michael Avara, Horizon Lines chief financial officer, said in a statement. (Reuters)
