Horizon Lines, Inc. (formerly NYSE:HRZ, now OTC:HRZL) has just been downgraded from the NYSE to the OTCQB marketplace for failing to keep its market cap above $15 million for thirty consecutive business days.
The company is now appealing, which means that the delisting process has been put on hold.
Although all these developments sound serious enough to be taken into account, they hardly appear to have anything to do with the downtrend HRZL stock has been following for the last six-months. Not to mention that while HRZL was traded around $5 in the first couple of months of 2011, it has now shrunk to $0.285 per share. No wonder that the market cap has behaved accordingly.
Horizon Lines, Inc pretends to be “the nation’s leading domestic ocean shipping and integrated logistics company.” Yet, if its stock market performance continues to deteriorate, HRZL will definitely be having trouble maintaining investor support.
According to the company’s latest 10-Q form, it finished the quarter ended Jun. 26, 2011 with:
- cash reserves of $3.4 million;
- $205 million in current assets, more than 63% of which comprised of receivables;
- $740 million in current liabilities;
- $307 million in operating revenue and a quarterly net loss of $5.4 million.
More than 593 million of HRZL’s current liabilities (approx. 80%) comprise the fraction of the company’s long-term debt. What is more, the total amount of current assets equals to less than 30% of the corresponding liabilities. If HRZL continues to be in the red, a possible return to the NYSE will most probably turn out to be much more challenging than managers expect.
