Horizon Global Reports Financial Results for Third Quarter 2020
Horizon Global Corporation (NYSE: HZN) reported third-quarter 2020 results, showcasing a significant turnaround with positive net income for the first time in three years. Key financial highlights include:
- Net sales rose by $22.9 million (23.8%) to $119.1 million in Horizon Americas.
- Gross profit increased by $15.7 million due to enhanced sales and operational efficiencies.
- Adjusted EBITDA surged to $15.5 million from $0.6 million year-over-year.
- Cash and availability improved to $78 million, reflecting a $17.1 million increase.
- Achieved positive net income for the first time in three years.
- Significant sales increase of 23.8% in Horizon Americas, totaling $119.1 million.
- Gross profit rose by $15.7 million, driven by increased net sales and efficiencies.
- Adjusted EBITDA reached $15.5 million, a notable increase compared to 2020.
- Gross profit in Horizon Europe-Africa decreased by $0.6 million despite a net sales increase.
PLYMOUTH, Mich.--(BUSINESS WIRE)--Horizon Global Corporation (NYSE: HZN), one of the world’s leading manufacturers of branded towing and trailering equipment, today reported financial results for the third quarter of 2020.
“I want to thank each and every member of our global team for the tremendous efforts and leadership demonstrated during the third quarter of 2020 as we continued to navigate our way through an unprecedented macro-economic environment,” stated Terry Gohl, Horizon Global's President and Chief Executive Officer. “We made a commitment in March to accelerate the deployment of our operational improvement initiatives to ensure that we would emerge from the crisis as a stronger company. The team rose to the occasion and, as a result, we delivered on our customer commitments in a period of increased demand, leading to significant improvements in profitability and cash flow generation. While the business continues to improve each and every day, we are beginning to see the fruits of our labor and the third quarter of 2020 marks the first time in three years that we have generated positive net income.”
2020 Third Quarter Segment Results
Horizon Americas. Net sales increased
Horizon Europe-Africa. Net sales increased
Balance Sheet and Liquidity. Cash and Availability(1) was
Summary
Gohl commented, “We are experiencing an extension of our traditional peak selling season in North America with demand continuing to outpace prior years. Increased take rates in Europe are also favorably impacting our outlook for the remainder of 2020. The increase in demand for our products has resulted in a strong open order book that we expect to capitalize on in the fourth quarter. Our laser-like focus on operational throughput and delivery through lean manufacturing principles positions us to meet heightened demand levels, solidify ourselves as the established market leader and continue to expand our market share in a profitable manner in each of the geographies we serve. We expect all these efforts to create near- and long-term value for our employees, customers and shareholders.”
Conference Call Details
Horizon Global will host a conference call regarding third quarter 2020 earnings on Thursday, November 5, 2020 at 8:30 a.m. Eastern Time. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (866) 652-5200 and from outside the U.S. at (412) 317-6060. Please use the conference identification number 10147302.
The third quarter 2020 results and supplemental materials, including a presentation in PDF format, will be distributed before the market opens on November 5, 2020 and will be available on the Company’s website at www.horizonglobal.com prior to the start of the call.
The conference call will be webcast simultaneously and in its entirety through the Horizon Global website. Shareholders, media representatives and others may participate in the webcast by registering through the investor relations section on the Company’s website.
A replay of the call will be available on Horizon Global’s website or by phone by dialing (877) 344-7529 and from outside the U.S. at (412) 317-0088. Please use the conference identification number 10147302. The telephone replay will be available approximately two hours after the end of the call and continue through November 19, 2020.
About Horizon Global
Headquartered in Plymouth, MI, Horizon Global is the #1 designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products in North America and Europe. The Company serves OEMs, retailers, dealer networks and the end consumer as the category leader in the automotive, leisure and agricultural market segments. Horizon provides its customers with outstanding products and services that reflect the Company's commitment to market leadership, innovation and operational excellence. The Company’s mission is to utilize forward-thinking technology to develop and deliver best in-class products for our customers, engage with our employees and realize value creation for our shareholders.
Horizon Global is home to some of the world’s most recognized brands in the towing and trailering industry, including: Draw-Tite, Reese, Westfalia, BULLDOG, Fulton and Tekonsha. Horizon Global has approximately 3,900 employees.
For more information, please visit www.horizonglobal.com.
Forward-Looking Statements
This release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained herein speak only as of the date they are made and give our current expectations or forecasts of future events. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to, risks and uncertainties with respect to: the impact of the novel coronavirus (COVID-19) pandemic on the Company’s business, results of operations, financial condition and liquidity; the Company’s ability to regain compliance with the New York Stock Exchange’s continued listing standards; the Company’s debt, including the Company’s ability to refinance any debt on commercially reasonable terms or at all; liabilities and restrictions imposed by the Company’s debt instruments; market demand; competitive factors; supply constraints; material and energy costs; technology factors; litigation; government and regulatory actions including the impact of any tariffs, quotas, or surcharges; the Company’s accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company’s business and industry; the success of the Company’s action plan, including the actual amount of savings and timing thereof; the success of the Company’s business improvement initiatives in Europe-Africa, including the amount of savings and timing thereof; the Company’s exposure to product liability claims from customers and end users, and the costs associated therewith; the Company’s ability to meet its covenants in the agreements governing its debt; factors affecting the Company's business that are outside of its control, including natural disasters, pandemics, including the current COVID-19 pandemic, accidents and governmental actions; and other risks that are discussed in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. The risks described herein are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows. We caution readers not to place undue reliance on such statements, which speak only as of the date hereof. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
(1) |
"Cash and Availability" refers to cash and cash equivalents and amounts of cash accessible but undrawn from credit facilities. |
|
(2) |
Please refer to “Company and Business Segment Financial Information” which details certain costs, expense, other charges, that are included in the determination of net income attributable to Horizon Global under GAAP, but that management would not consider important in evaluating the quality of the Company’s operating results. The Company’s management utilizes Adjusted EBITDA as the key measure of company and segment performance and for planning and forecasting purposes, as management believes this measure is most reflective of the operational profitability or loss of the Company and its operating segments and provides management and investors with information to evaluate the operating performance of its business and is representative of its performance used to measure certain of its financial covenants. Adjusted EBITDA should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Horizon Global, which is the most directly comparable financial measure to Adjusted EBITDA that is prepared in accordance with U.S. GAAP. |
|
(3) |
Working Capital defined as "total current assets" excluding "cash, cash equivalents and restricted cash", less "total current liabilities" excluding "current maturities, long-term debt" and "short-term operating lease liabilities". |
Horizon Global Corporation Condensed Consolidated Balance Sheets (dollars in thousands) |
||||||||||
|
|
September 30,
|
|
December 31,
|
||||||
|
|
(unaudited) |
|
|
||||||
Assets |
|
|
|
|
||||||
Current assets: |
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
39,810 |
|
|
|
$ |
11,770 |
|
|
Restricted cash |
|
5,840 |
|
|
|
— |
|
|
||
Receivables, net |
|
106,650 |
|
|
|
71,680 |
|
|
||
Inventories |
|
107,120 |
|
|
|
136,650 |
|
|
||
Prepaid expenses and other current assets |
|
9,910 |
|
|
|
8,570 |
|
|
||
Total current assets |
|
269,330 |
|
|
|
228,670 |
|
|
||
Property and equipment, net |
|
73,670 |
|
|
|
75,830 |
|
|
||
Operating lease right-of-use assets |
|
47,380 |
|
|
|
45,770 |
|
|
||
Goodwill |
|
3,120 |
|
|
|
4,350 |
|
|
||
Other intangibles, net |
|
56,510 |
|
|
|
60,120 |
|
|
||
Deferred income taxes |
|
390 |
|
|
|
430 |
|
|
||
Other assets |
|
7,630 |
|
|
|
5,870 |
|
|
||
Total assets |
|
$ |
458,030 |
|
|
|
$ |
421,040 |
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
||||||
Current liabilities: |
|
|
|
|
||||||
Short-term borrowings and current maturities, long-term debt |
|
$ |
8,740 |
|
|
|
$ |
4,310 |
|
|
Accounts payable |
|
97,170 |
|
|
|
78,450 |
|
|
||
Short-term operating lease liabilities |
|
11,750 |
|
|
|
9,880 |
|
|
||
Accrued liabilities |
|
59,890 |
|
|
|
48,850 |
|
|
||
Total current liabilities |
|
177,550 |
|
|
|
141,490 |
|
|
||
Gross long-term debt |
|
259,020 |
|
|
|
236,550 |
|
|
||
Unamortized debt issuance costs and discount |
|
(23,380 |
) |
|
|
(31,500 |
) |
|
||
Long-term debt |
|
235,640 |
|
|
|
205,050 |
|
|
||
Deferred income taxes |
|
3,400 |
|
|
|
4,040 |
|
|
||
Long-term operating lease liabilities |
|
48,070 |
|
|
|
48,070 |
|
|
||
Other long-term liabilities |
|
15,460 |
|
|
|
13,790 |
|
|
||
Total liabilities |
|
480,120 |
|
|
|
412,440 |
|
|
||
Total Horizon Global shareholders' (deficit) equity |
|
(17,340 |
) |
|
|
12,340 |
|
|
||
Noncontrolling interest |
|
(4,750 |
) |
|
|
(3,740 |
) |
|
||
Total shareholders' (deficit) equity |
|
(22,090 |
) |
|
|
8,600 |
|
|
||
Total liabilities and shareholders' equity |
|
$ |
458,030 |
|
|
|
$ |
421,040 |
|
|
Horizon Global Corporation Condensed Consolidated Statements of Operations (Unaudited - dollars in thousands, except share and per share data) |
||||||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||||
Net sales |
|
$ |
201,630 |
|
|
|
$ |
177,850 |
|
|
|
$ |
485,370 |
|
|
|
$ |
548,170 |
|
|
Cost of sales |
|
(158,260 |
) |
|
|
(149,560 |
) |
|
|
(397,700 |
) |
|
|
(460,010 |
) |
|
||||
Gross profit |
|
43,370 |
|
|
|
28,290 |
|
|
|
87,670 |
|
|
|
88,160 |
|
|
||||
Selling, general and administrative expenses |
|
(34,820 |
) |
|
|
(41,100 |
) |
|
|
(93,680 |
) |
|
|
(113,140 |
) |
|
||||
Net gain (loss) on dispositions of property and equipment |
|
10 |
|
|
|
50 |
|
|
|
(80 |
) |
|
|
1,500 |
|
|
||||
Operating profit (loss) |
|
8,560 |
|
|
|
(12,760 |
) |
|
|
(6,090 |
) |
|
|
(23,480 |
) |
|
||||
Other income (expense), net |
|
690 |
|
|
|
(1,640 |
) |
|
|
(1,430 |
) |
|
|
(6,610 |
) |
|
||||
Interest expense |
|
(7,560 |
) |
|
|
(24,120 |
) |
|
|
(23,970 |
) |
|
|
(50,270 |
) |
|
||||
Income (loss) from continuing operations before income tax |
|
1,690 |
|
|
|
(38,520 |
) |
|
|
(31,490 |
) |
|
|
(80,360 |
) |
|
||||
Income tax (expense) benefit |
|
(100 |
) |
|
|
1,020 |
|
|
|
(170 |
) |
|
|
2,330 |
|
|
||||
Net income (loss) from continuing operations |
|
1,590 |
|
|
|
(37,500 |
) |
|
|
(31,660 |
) |
|
|
(78,030 |
) |
|
||||
Income (loss) from discontinued operations, net of tax |
|
— |
|
|
|
182,750 |
|
|
|
(500 |
) |
|
|
189,520 |
|
|
||||
Net income (loss) |
|
1,590 |
|
|
|
145,250 |
|
|
|
(32,160 |
) |
|
|
111,490 |
|
|
||||
Less: Net loss attributable to noncontrolling interest |
|
(340 |
) |
|
|
(260 |
) |
|
|
(1,010 |
) |
|
|
(840 |
) |
|
||||
Net income (loss) attributable to Horizon Global |
|
$ |
1,930 |
|
|
|
$ |
145,510 |
|
|
|
$ |
(31,150 |
) |
|
|
$ |
112,330 |
|
|
Net income (loss) per share attributable to Horizon Global: |
|
|
|
|
|
|
|
|
||||||||||||
Basic: |
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations |
|
$ |
0.07 |
|
|
|
$ |
(1.47 |
) |
|
|
$ |
(1.19 |
) |
|
|
$ |
(3.05 |
) |
|
Discontinued operations |
|
— |
|
|
|
7.21 |
|
|
|
(0.02 |
) |
|
|
7.50 |
|
|
||||
Total |
|
$ |
0.07 |
|
|
|
$ |
5.74 |
|
|
|
$ |
(1.21 |
) |
|
|
$ |
4.45 |
|
|
Diluted: |
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations |
|
$ |
0.06 |
|
|
|
$ |
(1.47 |
) |
|
|
$ |
(1.19 |
) |
|
|
$ |
(3.05 |
) |
|
Discontinued operations |
|
— |
|
|
|
7.21 |
|
|
|
(0.02 |
) |
|
|
7.50 |
|
|
||||
Total |
|
$ |
0.06 |
|
|
|
$ |
5.74 |
|
|
|
$ |
(1.21 |
) |
|
|
$ |
4.45 |
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||||||
Basic |
|
25,939,741 |
|
|
|
25,329,492 |
|
|
|
25,651,789 |
|
|
|
25,267,310 |
|
|
||||
Diluted |
|
33,329,106 |
|
|
|
25,329,492 |
|
|
|
25,651,789 |
|
|
|
25,267,310 |
|
|
||||
Horizon Global Corporation Condensed Consolidated Statements of Cash Flows (unaudited - dollars in thousands) |
||||||||||
|
|
Nine Months Ended September 30, |
||||||||
|
|
2020 |
|
2019 |
||||||
Cash Flows from Operating Activities: |
|
|
|
|
||||||
Net (loss) income |
|
$ |
(32,160 |
) |
|
|
$ |
111,490 |
|
|
Less: (Loss) income from discontinued operations |
|
(500 |
) |
|
|
189,520 |
|
|
||
Net loss from continuing operations |
|
(31,660 |
) |
|
|
(78,030 |
) |
|
||
|
|
|
|
|
||||||
Adjustments to reconcile net loss from continuing operations to net cash provided by (used for) operating activities: |
|
|
|
|
||||||
Net loss (gain) on dispositions of property and equipment |
|
80 |
|
|
|
(1,500 |
) |
|
||
Depreciation |
|
11,110 |
|
|
|
11,980 |
|
|
||
Amortization of intangible assets |
|
5,040 |
|
|
|
4,800 |
|
|
||
Write off of operating lease assets |
|
— |
|
|
|
4,250 |
|
|
||
Amortization of original issuance discount and debt issuance costs |
|
11,450 |
|
|
|
18,570 |
|
|
||
Deferred income taxes |
|
(820 |
) |
|
|
(3,390 |
) |
|
||
Non-cash compensation expense |
|
2,190 |
|
|
|
1,790 |
|
|
||
Paid-in-kind interest |
|
6,280 |
|
|
|
7,620 |
|
|
||
Increase in receivables |
|
(35,170 |
) |
|
|
(4,680 |
) |
|
||
Decrease in inventories |
|
30,100 |
|
|
|
1,920 |
|
|
||
Increase in prepaid expenses and other assets |
|
(4,080 |
) |
|
|
(2,770 |
) |
|
||
Increase (decrease) in accounts payable and accrued liabilities |
|
29,800 |
|
|
|
(15,560 |
) |
|
||
Other, net |
|
(130 |
) |
|
|
(10,800 |
) |
|
||
Net cash provided by (used for) operating activities for continuing operations |
|
24,190 |
|
|
|
(65,800 |
) |
|
||
Cash Flows from Investing Activities: |
|
|
|
|
||||||
Capital expenditures |
|
(8,090 |
) |
|
|
(8,460 |
) |
|
||
Net proceeds from sale of business |
|
— |
|
|
|
214,570 |
|
|
||
Net proceeds from disposition of property and equipment |
|
70 |
|
|
|
1,470 |
|
|
||
Net cash (used for) provided by investing activities for continuing operations |
|
(8,020 |
) |
|
|
207,580 |
|
|
||
Cash Flows from Financing Activities: |
|
|
|
|
||||||
Proceeds from borrowings on credit facilities |
|
6,440 |
|
|
|
13,780 |
|
|
||
Repayments of borrowings on credit facilities |
|
(3,330 |
) |
|
|
(6,520 |
) |
|
||
Proceeds from Second Lien Term Loan, net of issuance costs |
|
— |
|
|
|
35,520 |
|
|
||
Repayments of borrowings on First Lien Term Loan, inclusive of transaction costs |
|
— |
|
|
|
(173,430 |
) |
|
||
Proceeds from Revolving Credit Facility, net of issuance costs |
|
54,680 |
|
|
|
— |
|
|
||
Repayments of borrowings on Revolving Credit Facility |
|
(28,300 |
) |
|
|
— |
|
|
||
Proceeds from ABL revolving debt, net of issuance costs |
|
8,000 |
|
|
|
68,790 |
|
|
||
Repayments of borrowings on ABL revolving debt |
|
(27,920 |
) |
|
|
(112,510 |
) |
|
||
Proceeds from Paycheck Protection Program Loan |
|
8,670 |
|
|
|
— |
|
|
||
Proceeds from issuance of Series A Preferred Stock |
|
— |
|
|
|
5,340 |
|
|
||
Proceeds from issuance of Warrants |
|
— |
|
|
|
5,380 |
|
|
||
Other, net |
|
(320 |
) |
|
|
(10 |
) |
|
||
Net cash provided by (used for) financing activities for continuing operations |
|
17,920 |
|
|
|
(163,660 |
) |
|
||
Discontinued Operations: |
|
|
|
|
||||||
Net cash (used for) provided by discontinued operating activities |
|
(500 |
) |
|
|
11,430 |
|
|
||
Net cash used for discontinued investing activities |
|
— |
|
|
|
(1,120 |
) |
|
||
Net cash provided by discontinued financing activities |
|
— |
|
|
|
— |
|
|
||
Net cash (used for) provided by discontinued operations |
|
(500 |
) |
|
|
10,310 |
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
290 |
|
|
|
280 |
|
|
||
Cash, Cash Equivalents and Restricted Cash: |
|
|
|
|
||||||
Increase (decrease) for the period |
|
33,880 |
|
|
|
(11,290 |
) |
|
||
At beginning of period |
|
11,770 |
|
|
|
27,650 |
|
|
||
At end of period |
|
$ |
45,650 |
|
|
|
$ |
16,360 |
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
||||||
Cash paid for interest |
|
$ |
4,990 |
|
|
|
$ |
19,730 |
|
|
Cash paid for taxes, net of refunds |
|
$ |
990 |
|
|
|
$ |
480 |
|
|
Appendix I
Horizon Global Corporation
Company and Business Segment Financial Information
(Unaudited - dollars in thousands)
The Company’s management utilizes Adjusted EBITDA(2) as the key measure of company and segment performance and for planning and forecasting purposes, as management believes this measure is most reflective of the operational profitability or loss of the Company and its operating segments and provides management and investors with information to evaluate the operating performance of its business and is representative of its performance used to measure certain of its financial covenants. Adjusted EBITDA(2) should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Horizon Global, which is the most directly comparable financial measure to Adjusted EBITDA(2) that is prepared in accordance with U.S. GAAP. Adjusted EBITDA(2), as determined and measured by Horizon Global, should also not be compared to similarly titled measures reported by other companies. The Company also uses operating income (loss) to measure stand-alone segment performance.
Adjusted EBITDA(2) is defined as net income attributable to Horizon Global before interest expense, income taxes, depreciation and amortization, and before certain items, as applicable such as severance, restructuring, relocation and related business disruption costs, impairment of goodwill and other intangibles, non-cash stock compensation, certain product liability recall and litigation claims, acquisition and integration costs, gains (losses) on business divestitures and other assets, board transition support and non-cash unrealized foreign currency remeasurement costs.
The following table summarizes Adjusted EBITDA(2) for our operating segments for the three months ended September 30, 2020 and 2019:
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Variance |
||||||||||||||||||||||||||||||||||||||
|
|
Horizon
|
|
Horizon
|
|
Corporate |
|
Consolidated |
|
Horizon
|
|
Horizon
|
|
Corporate |
|
Consolidated |
|
Consolidated |
||||||||||||||||||||||||||
|
|
(dollars in thousands) |
|
(dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||
Net income attributable to Horizon Global |
|
|
|
|
|
|
|
$ |
1,930 |
|
|
|
|
|
|
|
|
|
$ |
145,510 |
|
|
|
$ |
(143,580 |
) |
|
|||||||||||||||||
Net loss attributable to noncontrolling interest |
|
|
|
|
|
|
|
(340 |
) |
|
|
|
|
|
|
|
|
(260 |
) |
|
|
(80 |
) |
|
||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
$ |
1,590 |
|
|
|
|
|
|
|
|
|
$ |
145,250 |
|
|
|
$ |
(143,660 |
) |
|
|||||||||||||||||
Interest expense |
|
|
|
|
|
|
|
7,560 |
|
|
|
|
|
|
|
|
|
24,120 |
|
|
|
(16,560 |
) |
|
||||||||||||||||||||
Income tax expense (benefit) |
|
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
|
|
(1,020 |
) |
|
|
1,120 |
|
|
||||||||||||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
5,620 |
|
|
|
|
|
|
|
|
|
6,250 |
|
|
|
(630 |
) |
|
||||||||||||||||||||
EBITDA |
|
$ |
13,870 |
|
|
$ |
7,490 |
|
|
|
$ |
(6,490 |
) |
|
|
$ |
14,870 |
|
|
|
$ |
(1,290 |
) |
|
|
$ |
3,950 |
|
|
|
$ |
171,940 |
|
|
|
$ |
174,600 |
|
|
|
$ |
(159,730 |
) |
|
Net loss attributable to noncontrolling interest |
|
— |
|
|
340 |
|
|
|
— |
|
|
|
340 |
|
|
|
— |
|
|
|
260 |
|
|
|
— |
|
|
|
260 |
|
|
|
80 |
|
|
|||||||||
Income from discontinued operations, net of tax |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(182,750 |
) |
|
|
(182,750 |
) |
|
|
182,750 |
|
|
|||||||||
Severance |
|
— |
|
|
(170 |
) |
|
|
— |
|
|
|
(170 |
) |
|
|
(10 |
) |
|
|
10 |
|
|
|
1,620 |
|
|
|
1,620 |
|
|
|
(1,790 |
) |
|
|||||||||
Restructuring, relocation and related business disruption costs |
|
250 |
|
|
(20 |
) |
|
|
150 |
|
|
|
380 |
|
|
|
(200 |
) |
|
|
— |
|
|
|
4,250 |
|
|
|
4,050 |
|
|
|
(3,670 |
) |
|
|||||||||
Non-cash stock compensation |
|
— |
|
|
— |
|
|
|
870 |
|
|
|
870 |
|
|
|
— |
|
|
|
— |
|
|
|
850 |
|
|
|
850 |
|
|
|
20 |
|
|
|||||||||
Loss (gain) on business divestitures and other assets |
|
420 |
|
|
— |
|
|
|
(20 |
) |
|
|
400 |
|
|
|
320 |
|
|
|
— |
|
|
|
(1,320 |
) |
|
|
(1,000 |
) |
|
|
1,400 |
|
|
|||||||||
Product liability and litigation claims |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
820 |
|
|
|
(4,270 |
) |
|
|
— |
|
|
|
(3,450 |
) |
|
|
3,450 |
|
|
|||||||||
Debt issuance costs |
|
— |
|
|
— |
|
|
|
530 |
|
|
|
530 |
|
|
|
— |
|
|
|
— |
|
|
|
1,310 |
|
|
|
1,310 |
|
|
|
(780 |
) |
|
|||||||||
Unrealized foreign currency remeasurement costs |
|
980 |
|
|
(1,580 |
) |
|
|
(500 |
) |
|
|
(1,100 |
) |
|
|
240 |
|
|
|
650 |
|
|
|
300 |
|
|
|
1,190 |
|
|
|
(2,290 |
) |
|
|||||||||
Other |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
670 |
|
|
|
130 |
|
|
|
(530 |
) |
|
|
270 |
|
|
|
(270 |
) |
|
|||||||||
Adjusted EBITDA |
|
$ |
15,520 |
|
|
$ |
6,060 |
|
|
|
$ |
(5,460 |
) |
|
|
$ |
16,120 |
|
|
|
$ |
550 |
|
|
|
$ |
730 |
|
|
|
$ |
(4,330 |
) |
|
|
$ |
(3,050 |
) |
|
|
$ |
19,170 |
|
|
The following table summarizes Adjusted EBITDA(2) for our operating segments for the nine months ended September 30, 2020 and 2019:
|
|
Nine Months Ended
|
|
Nine Months Ended
|
|
Variance |
||||||||||||||||||||||||||||||||||||||
|
|
Horizon
|
|
Horizon
|
|
Corporate |
|
Consolidated |
|
Horizon
|
|
Horizon
|
|
Corporate |
|
Consolidated |
|
Consolidated |
||||||||||||||||||||||||||
|
|
(dollars in thousands) |
|
(dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Horizon Global |
|
|
|
|
|
|
|
$ |
(31,150 |
) |
|
|
|
|
|
|
|
|
$ |
112,330 |
|
|
|
$ |
(143,480 |
) |
|
|||||||||||||||||
Net loss attributable to noncontrolling interest |
|
|
|
|
|
|
|
(1,010 |
) |
|
|
|
|
|
|
|
|
(840 |
) |
|
|
(170 |
) |
|
||||||||||||||||||||
Net (loss) income |
|
|
|
|
|
|
|
$ |
(32,160 |
) |
|
|
|
|
|
|
|
|
$ |
111,490 |
|
|
|
$ |
(143,650 |
) |
|
|||||||||||||||||
Interest expense |
|
|
|
|
|
|
|
23,970 |
|
|
|
|
|
|
|
|
|
50,270 |
|
|
|
(26,300 |
) |
|
||||||||||||||||||||
Income tax expense (benefit) |
|
|
|
|
|
|
|
170 |
|
|
|
|
|
|
|
|
|
(2,330 |
) |
|
|
2,500 |
|
|
||||||||||||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
16,150 |
|
|
|
|
|
|
|
|
|
16,790 |
|
|
|
(640 |
) |
|
||||||||||||||||||||
EBITDA |
|
$ |
24,160 |
|
|
$ |
3,150 |
|
|
|
$ |
(19,180 |
) |
|
|
$ |
8,130 |
|
|
|
$ |
9,960 |
|
|
|
$ |
4,550 |
|
|
|
$ |
161,710 |
|
|
|
$ |
176,220 |
|
|
|
$ |
(168,090 |
) |
|
Net loss attributable to noncontrolling interest |
|
— |
|
|
1,010 |
|
|
|
— |
|
|
|
1,010 |
|
|
|
— |
|
|
|
840 |
|
|
|
— |
|
|
|
840 |
|
|
|
170 |
|
|
|||||||||
Loss (income) from discontinued operations, net of tax |
|
— |
|
|
— |
|
|
|
500 |
|
|
|
500 |
|
|
|
— |
|
|
|
— |
|
|
|
(189,520 |
) |
|
|
(189,520 |
) |
|
|
190,020 |
|
|
|||||||||
Severance |
|
530 |
|
|
(150 |
) |
|
|
(10 |
) |
|
|
370 |
|
|
|
(200 |
) |
|
|
10 |
|
|
|
1,620 |
|
|
|
1,430 |
|
|
|
(1,060 |
) |
|
|||||||||
Restructuring, relocation and related business disruption costs |
|
1,550 |
|
|
10 |
|
|
|
470 |
|
|
|
2,030 |
|
|
|
1,110 |
|
|
|
(1,410 |
) |
|
|
4,250 |
|
|
|
3,950 |
|
|
|
(1,920 |
) |
|
|||||||||
Non-cash stock compensation |
|
— |
|
|
— |
|
|
|
2,190 |
|
|
|
2,190 |
|
|
|
— |
|
|
|
— |
|
|
|
1,820 |
|
|
|
1,820 |
|
|
|
370 |
|
|
|||||||||
Loss (gain) on business divestitures and other assets |
|
1,020 |
|
|
(180 |
) |
|
|
20 |
|
|
|
860 |
|
|
|
1,280 |
|
|
|
3,630 |
|
|
|
— |
|
|
|
4,910 |
|
|
|
(4,050 |
) |
|
|||||||||
Board transition support |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,450 |
|
|
|
1,450 |
|
|
|
(1,450 |
) |
|
|||||||||
Product liability and litigation claims |
|
— |
|
|
1,510 |
|
|
|
— |
|
|
|
1,510 |
|
|
|
820 |
|
|
|
50 |
|
|
|
— |
|
|
|
870 |
|
|
|
640 |
|
|
|||||||||
Debt issuance costs |
|
— |
|
|
— |
|
|
|
1,840 |
|
|
|
1,840 |
|
|
|
— |
|
|
|
— |
|
|
|
4,350 |
|
|
|
4,350 |
|
|
|
(2,510 |
) |
|
|||||||||
Unrealized foreign currency remeasurement costs |
|
280 |
|
|
860 |
|
|
|
(490 |
) |
|
|
650 |
|
|
|
160 |
|
|
|
1,210 |
|
|
|
440 |
|
|
|
1,810 |
|
|
|
(1,160 |
) |
|
|||||||||
Other |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
870 |
|
|
|
(180 |
) |
|
|
(630 |
) |
|
|
60 |
|
|
|
(60 |
) |
|
|||||||||
Adjusted EBITDA |
|
$ |
27,540 |
|
|
$ |
6,210 |
|
|
|
$ |
(14,660 |
) |
|
|
$ |
19,090 |
|
|
|
$ |
14,000 |
|
|
|
$ |
8,700 |
|
|
|
$ |
(14,510 |
) |
|
|
$ |
8,190 |
|
|
|
$ |
10,900 |
|
|
Segment Information
The following table summarizes financial information for our operating segments for the three months ended September 30, 2020 and 2019:
|
|
Three Months Ended
|
|
Change |
||||||||||||||
|
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||||
|
|
(dollars in thousands) |
||||||||||||||||
Net Sales |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
119,140 |
|
|
|
$ |
96,220 |
|
|
|
$ |
22,920 |
|
|
|
23.8 |
% |
Horizon Europe-Africa |
|
82,490 |
|
|
|
81,630 |
|
|
|
860 |
|
|
|
1.1 |
% |
|||
Total |
|
$ |
201,630 |
|
|
|
$ |
177,850 |
|
|
|
$ |
23,780 |
|
|
|
13.4 |
% |
Gross Profit |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
32,960 |
|
|
|
$ |
17,270 |
|
|
|
$ |
15,690 |
|
|
|
90.9 |
% |
Horizon Europe-Africa |
|
10,410 |
|
|
|
11,020 |
|
|
|
(610 |
) |
|
|
(5.5 |
%) |
|||
Total |
|
$ |
43,370 |
|
|
|
$ |
28,290 |
|
|
|
$ |
15,080 |
|
|
|
53.3 |
% |
Operating Profit (Loss) |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
13,170 |
|
|
|
$ |
(2,230 |
) |
|
|
$ |
15,400 |
|
|
|
690.6 |
% |
Horizon Europe-Africa |
|
2,440 |
|
|
|
1,730 |
|
|
|
710 |
|
|
|
41.0 |
% |
|||
Corporate |
|
(7,050 |
) |
|
|
(12,260 |
) |
|
|
5,210 |
|
|
|
42.5 |
% |
|||
Total |
|
$ |
8,560 |
|
|
|
$ |
(12,760 |
) |
|
|
$ |
21,320 |
|
|
|
167.1 |
% |
Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
15,520 |
|
|
|
$ |
550 |
|
|
|
$ |
14,970 |
|
|
|
2,721.8 |
% |
Horizon Europe-Africa |
|
6,060 |
|
|
|
730 |
|
|
|
5,330 |
|
|
|
730.1 |
% |
|||
Corporate |
|
(5,460 |
) |
|
|
(4,330 |
) |
|
|
(1,130 |
) |
|
|
(26.1 |
%) |
|||
Total |
|
$ |
16,120 |
|
|
|
$ |
(3,050 |
) |
|
|
$ |
19,170 |
|
|
|
628.5 |
% |
The following table summarizes financial information for our operating segments for the nine months ended September 30, 2020 and 2019:
|
|
Nine Months Ended
|
|
Change |
||||||||||||||
|
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||||
|
|
(dollars in thousands) |
||||||||||||||||
Net Sales |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
285,630 |
|
|
|
$ |
300,670 |
|
|
|
$ |
(15,040 |
) |
|
|
(5.0 |
%) |
Horizon Europe-Africa |
|
199,740 |
|
|
|
247,500 |
|
|
|
(47,760 |
) |
|
|
(19.3 |
%) |
|||
Total |
|
$ |
485,370 |
|
|
|
$ |
548,170 |
|
|
|
$ |
(62,800 |
) |
|
|
(11.5 |
%) |
Gross Profit |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
70,720 |
|
|
|
$ |
62,080 |
|
|
|
$ |
8,640 |
|
|
|
13.9 |
% |
Horizon Europe-Africa |
|
16,950 |
|
|
|
26,080 |
|
|
|
(9,130 |
) |
|
|
(35.0 |
%) |
|||
Total |
|
$ |
87,670 |
|
|
|
$ |
88,160 |
|
|
|
$ |
(490 |
) |
|
|
(0.6 |
%) |
Operating Profit (Loss) |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
19,330 |
|
|
|
$ |
5,760 |
|
|
|
$ |
13,570 |
|
|
|
235.6 |
% |
Horizon Europe-Africa |
|
(6,040 |
) |
|
|
120 |
|
|
|
(6,160 |
) |
|
|
(5,133.3 |
%) |
|||
Corporate |
|
(19,380 |
) |
|
|
(29,360 |
) |
|
|
9,980 |
|
|
|
34.0 |
% |
|||
Total |
|
$ |
(6,090 |
) |
|
|
$ |
(23,480 |
) |
|
|
$ |
17,390 |
|
|
|
74.1 |
% |
Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||||
Horizon Americas |
|
$ |
27,540 |
|
|
|
$ |
14,000 |
|
|
|
$ |
13,540 |
|
|
|
96.7 |
% |
Horizon Europe-Africa |
|
6,210 |
|
|
|
8,700 |
|
|
|
(2,490 |
) |
|
|
(28.6 |
%) |
|||
Corporate |
|
(14,660 |
) |
|
|
(14,510 |
) |
|
|
(150 |
) |
|
|
(1.0 |
%) |
|||
Total |
|
$ |
19,090 |
|
|
|
$ |
8,190 |
|
|
|
$ |
10,900 |
|
|
|
133.1 |
% |
Appendix II
Horizon Global Corporation
Reconciliation of Reported Revenue Growth
to Constant Currency Basis
(Unaudited)
We evaluate growth in our operations on both an as reported and a constant currency(1) basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our growth, consistent with how we evaluate our performance. Constant currency revenue results are calculated by translating current year revenue in local currency using the prior year's currency conversion rate. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Our use of this term may vary from the use of similarly-titled measures by other issuers due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
|
|
Horizon
|
|
Horizon
|
|
Consolidated |
|
Horizon
|
|
Horizon
|
|
Consolidated |
||||||
Revenue growth as reported |
|
23.8 |
% |
|
1.1 |
% |
|
13.4 |
% |
|
(5.0) |
% |
|
(19.3) |
% |
|
(11.5) |
% |
Less: currency impact |
|
(0.5) |
% |
|
4.4 |
% |
|
1.7 |
% |
|
(0.3) |
% |
|
0.3 |
% |
|
(0.1) |
% |
Revenue growth at constant currency |
|
24.3 |
% |
|
(3.3) |
% |
|
11.6 |
% |
|
(4.7) |
% |
|
(19.6) |
% |
|
(11.4) |
% |
