HORIZON LINES Announces Restructuring Plan
Annualized labor-related savings estimated at $7 - $10 million
CHARLOTTE, NC, November 10, 2008 - Horizon Lines, Inc. today announced a non-union workforce restructuring initiative targeted at reducing annualized labor-related costs by an estimated $7 million to $10 million.
The company intends to reduce its workforce by at least 10%, or approximately 70 of its 700-plus non-union employees. Initially, the company will offer a voluntary severance program to certain eligible non-union employees. If the company is unable to achieve anticipated reductions from the voluntary program, it intends to implement an involuntary severance program for non-union employees. The company expects to complete the workforce reduction initiative by January 31, 2009, and it is expected to result in a fourth-quarter 2008 charge of approximately $3.5 million to $5 million pretax, or $0.11 to $0.16 per fully diluted share. The final annualized savings and associated costs of the initiative will depend on the actual mix of associates who are ultimately included in either the voluntary or involuntary program.
"We continue to face a very difficult macro-economic environment that is having a significant adverse impact on the markets we serve," said Chuck Raymond, Chairman, President and Chief Executive Officer. "We expect these challenges to continue through at least 2009 and are taking the appropriate, necessary steps to adjust our business without impacting our ability to continue providing excellent service to all our customers and execute our business strategy. We also are continuing to evaluate all other non-personnel aspects of our business and assess additional restructuring opportunities to remove costs from our system. At the same time, we will continue to utilize our Horizon EDGE process to improve efficiencies of our ongoing business.
"While our company remains well-capitalized, with strong liquidity, our focus for 2009 will be on conserving cash and removing costs from our organization wherever possible," Mr. Raymond said. "Our executive leadership remains intact and is committed to guiding Horizon Lines through this challenging economic environment."