Horizon Lines (HRZ)

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See all Bulls Reasons Bulls: Reasons To Buy Business Strategies beneficial for the company 100% agree Business Strategies beneficial for the company As the company further settles into its post private-equity-come-IPO phase, its operations and financials should normalize, allowing its free-cash flow generating capability to come to the forefront. Despite its earnings warning on 11/19/2007, the company reiterated its... read more View or Edit Reason 2 votes 100% agree Fuel and customers 100% agree Fuel and customers All fuel costs are eventually passed on to customers via standard surcharges, with a lag of 30 to 60 days. Good customer base, with no customer comprising even 10% of business. Additionally, Horizon has been recognized by many of its customers (Walmart, Lowe's, etc) as an... read more View or Edit Reason 2 votes 100% agree Government Intervention 100% agree Government Intervention Possible upside Jones Act provisions limit competition and eliminate foreign operators altogether, making these routes less volatile. The company's close ties with the military (I suspect this is industry-wide), along with the growing trend towards protectionism, makes a... read more View or Edit Reason 2 votes 100% agree See all Bears Reasons Bears: Reasons To Sell Business Liabilities 100% agree Business Liabilities The company has $740M of operating leases related to its fleet held off-balance sheet. This nearly doubles the company's total liabilities to $1.5B. Moreover, Horizon's Jones Act fleet is fairly long in the tooth at an average of 31 years. Replacing each vessel will cost at... read more View or Edit Reason 2 votes 100% agree Highly Leveraged 100% agree Highly Leveraged While the company's recent refinancing lowered its cost of debt and annual interest expense, it also raised the company's leverage ratios. The company's debt-to-equity ratio is around 4. Expect interest expense to be roughly 25-40% of operating income for the foreseeable future.[1] ↑ Horizon Lines Research - Risks View or Edit Reason 2 votes 100% agree Jones act curse 50% agree Jones act curse Horizon Lines is the leading Jones Act operator in the Puerto Rico market. Puerto Rico has been in an economic slowdown for over a year now, impacting the company's results. Furthermore, a bill winding its way through Congress is seeking to retroactively close the tonnage... read more View or Edit Reason 2 votes 50% agree Send the authors a comment or suggestion Be the first to make a suggestion See All Suggestions

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• Alexander & Baldwin (ALEX)

Horizon Lines is a maritime transport and logistics company. It is the only Jones Act shipper to serve the 3 non-contiguous regions of Puerto Rico, Alaska and Hawaii. In addition, the company also ships to Guam as well as Asia as part of an agreement with Moller Maersk.^[1]

[edit] Business

[edit] Competitors

Horizon doesn't have a direct competitor for comparison as it is the only Jones Act shipper to service all three non-contiguous US ports (Puerto Rico, Hawaii/Guam, Alaska). The competitors listed below are also Jones Act shippers but have other operations and/or focus.

Alexander & Baldwin - Hawaii-based operator with operations in sugar & real estate:

• Largest Jones Act shipper in the Hawaii market
• Produces 3% of U.S. sugar output
• Hawaiian real estate may not be as vulnerable as contiguous US real estate
• Heavy focus on automobile cargo, which is lower margin
• Rising fuel costs affecting all shippers
• Entry into foreign markets without Jones Act protection
• Exposure to US housing market.
• Sugar market has not performed like other commodities in recent years.

Kirby (KEX) - Inland tank barge carrier focused mainly on petrochemical liquids transportation with some operations in diesel engine services.

• Market leader in inland transport of petrochemicals.
• Diesel engine segment may experience growth as economies focus on climate change and energy efficiency.
• Petrochemical shipping is more resistant to economic slowdowns.
• Higher capex costs due to large and aging fleet
• 25% of business from 2 customers: Dow Chemicals & ExxonMobil^[2]

 Horizon Lines

	Select All  |  Select None Metrics Average Age of Fleet Average Time Charter Equivalent per Day Earnings Capacity Days Net Earning Days Off-Hire Days Average Vessel Operating Expenses per Day Time Charter Equivalent Revenues Vessels Owned Vessels Chartered In Debt to Equity Average Number of Vessels Revenue Net Income Number of Vessels Percentage Utilization Deadweight Tons Cancel

	Select All  |  Select None Companies American Commercial Lines (ACLI) Alexander & Baldwin (ALEX) Arlington Tankers (ATB) B+H Ocean Carriers (BHO) Capital Product Partners L.P. (CPLP) Double Hull Tankers (DHT) DryShips (DRYS) Diana Shipping (DSX) Eagle Bulk Shipping (EGLE) Euroseas (ESEA) Excel Maritime Carriers (EXM) Frontline (FRO) StealthGas (GASS) Golar LNG (GLNG) General Maritime (GMR) Genco Shipping (GNK) Hornbeck Offshore Services (HOS) Horizon Lines (HRZ) International Shipholding (ISH) Kirby (KEX) K-Sea Transportation Partners LP (KSP) Nordic American Tanker Shipping (NAT) Navios Maritime Holdings (NM) OceanFreight (OCNF) Omega Navigation Enterprises (ONAV) Overseas Shipholding Group (OSG) Aries Maritime Transport (RAMS) Ship Finance International (SFL) Seaspan (SSW) TBS International (TBSI) Tidewater (TDW) Teekay Lng Partners, L.P. (TGP) Teekay Shipping (TK) Grupo TMM, S.A. (TMM) Tsakos Energy Navigation (TNP) Teekay Offshore Partners L.P. (TOO) Trailer Bridge (TRBR) Aktieselskabet Dampskibsselskabet Torm (TRMD) Ultrapetrol (Bahamas) (ULTR) U.S. Shipping Partners L.P. (USS) Knightsbridge Tankers (VLCCF) BRISTOW GROUP (BRS) Firstgroup PLC (FGP-LN) Danaos (DAC) FreeSeas (FREE) PHI (PHII) Rand Logistics (RLOG) Cancel

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+ Select more metrics (16)

Company	Data From	Deadweight Tons	Number of Vessels	Revenue	Percentage Utilization	Net Income
Alexander & Baldwin (ALEX)	2007	397K[3]	18[4]	$1B[5]	Add	$142M[5]
Horizon Lines (HRZ)	2007	Add	21[6]	$1.21B[7]	Add	$28.9M[7]
Kirby (KEX)	2007	Add	1.18K[8]	$929M[9]	Add	$123M[9]
Omega Navigation Enterprises (ONAV)	2006	261K[10]	6[11]	$26.9M[11]	10000%[11]	$4.57M[11]
StealthGas (GASS)	2006	Add	28[12]	$73.3M[13]	98.9%[14]	$18.5M[13]

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[edit] References

1. ↑ Enlightened American Research
2. ↑ Horizon Lines- Competitor Review
3. ↑ 2007 ALEX, 10-K, Item 1, Page 4
4. ↑ 2007 ALEX, 10-K, Item 1 & 2, Page 2
5. ↑ ^{5.0 5.1} 2007 ALEX, 10-K, Item 8, Page 55
6. ↑ 2007 HRZ, 10-K, Item 1, Page 7
7. ↑ ^{7.0 7.1} 2007 HRZ, 10-K, Item 6, Page 30
8. ↑ 2007 KEX, 10-K, Item 1, Page 3
9. ↑ ^{9.0 9.1} 2007 KEX, 10-K, Item 6, Page 23
10. ↑ ONAV -2006, Item 4, pg 17
11. ↑ ^{11.0 11.1 11.2 11.3} ONAV -2006, Item 3, pg 1
12. ↑ GASS - 20-F of 2006, Item 4 pg 20-21 & F-6
13. ↑ ^{13.0 13.1} GASS - 20-F of 2006, Item 3 pg 2
14. ↑ GASS - 20-F of 2006, Item 3 pg 3