Horizon Global Corporation (NYSE: HZN):
Business Update
- First quarter diluted earnings per
share of $(0.41)
- First quarter adjusted diluted earnings
per share(1) of $(0.17)
- Second quarter earnings per share
guidance
- Diluted earnings per share between
$0.61 and $0.66
- Adjusted diluted earnings per share(2)
between $0.67 and $0.72
- First half 2017 earnings per share
guidance
- Diluted earnings per share between
$0.23 and $0.28
- Adjusted diluted earnings per share(2)
between $0.52 and $0.57
- Full-year 2017 earnings per share
guidance
- Diluted earnings per share increased to
between $0.50 and $0.60
- Adjusted diluted earnings per share(2)
increased to between $0.94 and $1.04
- Share repurchase program for up to 1.5
million shares authorized by Board of Directors
- Westfalia integration and synergies on
track; double-digit organic revenue growth in Europe-Africa
segment
- Enhanced capital structure; 2017
interest cost reduction of $6.2 million before loss on
extinguishment of debt
Horizon Global Corporation (NYSE: HZN), one of the world’s
leading manufacturers of branded towing and trailering equipment,
today reported first quarter 2017 financial results. The Company
remains positive regarding its outlook and has increased earnings
per share guidance for the full year 2017.
“During the first quarter, total Company revenue growth was over
39%, with double-digit organic growth in both our Europe-Africa and
Asia-Pacific operations,” said A. Mark Zeffiro, President and Chief
Executive Officer of Horizon Global. “This revenue growth, coupled
with lower-than-planned corporate costs, was more than offset by
lower-than-expected performance in our Americas business. The slow
start to the year in the Americas was driven by several factors,
including overall market conditions with softness in GDP growth and
lower retail sales. The first quarter also saw a shift in the
timing of customer orders into the second quarter of this year,
with this shift partially attributable to the ramp up of our new
ERP system in the Americas. Importantly, Horizon Americas entered
the second quarter with significant customer orders ready for
delivery.
“We remain on track with our Company’s performance expectations
for the first half of the year. The overall integration of the
Westfalia business is progressing as planned, and we are confident
we will achieve synergy benefits during the year of approximately
€9 million. We are seeing financial and commercial benefits as the
industry leader in the European towing and trailering market beyond
the planned synergies from the integration.
“We continue to drive progress on our key financial priorities -
expanding our operating margin, improving our capital structure and
organically growing the business to extract maximum value for our
shareholders. Our confidence in our business remains strong, as
evidenced by today’s announcement of the Company’s share repurchase
program and the increase in our full-year earnings per share
guidance.”
2017 First Quarter Segment
Highlights
Horizon Global reports results for three reportable segments
based on geography. These segments include: Horizon Americas,
Horizon Europe-Africa, and Horizon Asia-Pacific.
Horizon Americas. Net sales decreased 11.6 percent,
driven by several factors, including a shift in customer orders
from the first quarter into the second quarter and the impact of
the new ERP system on order processing in North America. Operating
profit decreased $4.9 million to $5.2 million, or 5.3 percent of
net sales, attributable, in part, to lower sales volumes and an
unfavorable product sales mix.
Horizon Europe-Africa. Net sales increased by $65.8
million, driven by the acquisition of Westfalia and strong growth
in the OE channel, both in new and existing programs, which
resulted in double-digit organic growth. Operating profit decreased
$0.7 million to $(0.4) million, or 0.4 percent of net sales, as a
result of higher severance and restructuring costs associated with
the integration of Westfalia. Adjusted operating profit(3)
increased to $1.6 million, or 2.0 percent of net sales.
Horizon Asia-Pacific. Net sales increased 18.1 percent,
or 13.5 percent on a constant currency basis(4), driven by a new
customer in the industrial channel and strong growth in the OE
channel. Operating profit increased $0.8 million to $3.1 million,
or 11.4 percent of net sales, on increased sales volumes. This 160
basis point improvement resulted from productivity initiatives and
lower input costs driven by a stronger Australian dollar.
Share Repurchase Program
In April, the Horizon Global Board of Directors authorized a
share repurchase program. Under the program, Horizon Global may
repurchase up to 1.5 million shares of the Company’s common stock
in amounts and at prices as the Company deems appropriate, on the
open market or through privately negotiated transactions, depending
on market conditions and subject to other factors.
Commented Zeffiro, “We strongly believe that our growth
prospects and long-term strategy are not reflected in the Company’s
current share price. This share repurchase program offers us the
flexibility to enhance shareholder value through opportunistic
repurchases of our common stock and demonstrates our steadfast
confidence in the strength of our business and our team’s ability
to execute against our strategic plan.”
Outlook
“We are raising our full-year earnings per share guidance,” said
Zeffiro. “We are committed to drive growth across our multiple
geographies, confident in our global team’s ability to execute
against our plan and motivated by our desire to deliver value to
our shareholders. We remain focused on margin improvement and our
goal of achieving a 10.0 percent adjusted operating profit margin
for the enterprise.”
For second quarter 2017, the Company expects:
- Revenues between $235 million to $245
million
- Diluted earnings per share between
$0.61 and $0.66
- Adjusted diluted earnings per share(2)
between $0.67 and $0.72
For full-year 2017, the Company expects:
- Revenue growth of 30 to 35 percent;
unchanged
- Operating profit between $40 million
and $46 million, up 370 to 410 basis points; unchanged
- Adjusted operating profit(2) between
$53 million and $59 million, up 60 to 100 basis points;
unchanged
- Operating cash between $40.0 million
and $50.0 million; unchanged
- Diluted earnings per share between
$0.50 and $0.60; increased
- Adjusted diluted earnings per share(2)
between $0.94 and $1.04; increased
Conference Call Details
Horizon Global will host a conference call regarding first
quarter 2017 earnings on Thursday, May 4, 2017 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 (844) 711-8052
and from outside the U.S. at (832) 900-4641. Please use the
conference identification number 1710291.
The conference call will be webcast simultaneously and in its
entirety through the Horizon Global website. An earnings
presentation will also be available on the Horizon Global website
at the time of the conference call. 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 (800) 585-8367 and from outside the
U.S. at (404) 537-3406. Please use the conference identification
number 1710291. The telephone replay will be available
approximately two hours after the end of the call and continue
through May 18, 2017.
About Horizon Global
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, Australia 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: BULLDOG,
Draw-Tite, Fulton, Hayman Reese, Reese, ROLA, Tekonsha, and
Westfalia. Horizon Global has approximately 4300 employees in 64
facilities across 20 countries.
For more information, please
visit www.horizonglobal.com.
Safe Harbor Statement
This release contains “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995, including the
preliminary results for the year ended December 31, 2016 and
expected synergies from the Westfalia acquisition. 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 finalization of the Company’s results for the
quarter and year ended December 31, 2016, including the completion
of purchase accounting for the Westfalia transaction; the Company’s
leverage; liabilities imposed by the Company’s debt instruments;
market demand; competitive factors; supply constraints; material
and energy costs; technology factors; litigation; government and
regulatory actions; the Company’s accounting policies; future
trends; general economic and currency conditions; various
conditions specific to the Company’s business and industry; the
spin-off from TriMas Corporation; risks inherent in the achievement
of cost synergies and timing thereof in connection with the
Westfalia acquisition, including whether the acquisition will be
accretive; the Company’s ability to promptly and effectively
integrate Westfalia; the performance and costs of integration of
Westfalia; the timing and amount of repurchases of the Company’s
common stock, if any; 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) Appendix I details certain costs, expenses, other
charges, gains or income, collectively described as “Special
Items,” that are included in the determination of net income under
GAAP, but that management would consider important in evaluating
the quality of the Company’s operating results as they are not
indicative of the Company’s core operating results or may obscure
trends useful in evaluating the Company’s continuing activities.
Accordingly, the Company presents adjusted net income and adjusted
diluted earnings per share excluding these Special Items to help
investors evaluate our operating performance and trends in our
business consistent with how management evaluates such performance
and trends. (2) Excluding “Special Items”. Included in
Appendix IV, “2017 Guidance Reconciliation,” this non-GAAP measure
has been reconciled to the most comparable GAAP measure. “Special
Items” detail certain costs, expenses, other charges, gains or
income, that are included in the determination of operating profit
under GAAP, but that management would not consider important in
evaluating the quality of the Company’s operating results as they
are not indicative of the Company’s core operating results or may
obscure trends useful in evaluating the Company’s continuing
activities. (3) Please refer to “Company and Business
Segment Financial Information,” which details certain costs,
expenses, other charges, gains or income, collectively described as
‘’Special Items,’’ that are included in the determination of
operating profit under GAAP, but that management would not consider
important in evaluating the quality of the Company’s operating
results as they are not indicative of the Company’s core operating
results or may obscure trends useful in evaluating the Company’s
continuing activities. Accordingly, the Company presents adjusted
operating profit excluding these Special Items to help investors
evaluate our operating performance and trends in our business
consistent with how management evaluates such performance and
trends. Further, the Company presents adjusted operating profit
excluding these Special Items to provide investors with a better
understanding of the Company’s view of first quarter results as
compared to prior periods. (4) We evaluate growth in our
operations on both an as reported basis and a constant currency
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 period
revenue in local currency using the prior period’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. See Appendix II for reconciliation.
Horizon Global Corporation Condensed Consolidated Balance
Sheets (Dollars in thousands) March
31, 2017 December 31, 2016
(unaudited) Assets Current assets: Cash and cash
equivalents $ 30,160 $ 50,240 Receivables, net 104,780 77,570
Inventories 155,920 146,020 Prepaid expenses and other current
assets 13,540 12,160 Total current assets 304,400
285,990 Property and equipment, net 99,770 93,760 Goodwill 125,950
120,190 Other intangibles, net 84,660 86,720 Deferred income taxes
6,870 9,370 Other assets 15,630 17,340 Total assets $
637,280 $ 613,370
Liabilities and Shareholders'
Equity Current liabilities: Current maturities, long-term debt
$ 12,160 $ 22,900 Accounts payable 107,200 111,450 Accrued
liabilities 59,910 63,780 Total current liabilities
179,270 198,130 Long-term debt 268,750 327,040 Deferred income
taxes 26,890 25,730 Other long-term liabilities 30,110
30,410 Total liabilities 505,020 581,310 Commitments and
contingent liabilities — — Total Horizon Global shareholders'
equity 132,860 32,360 Noncontrolling interest (600 ) (300 ) Total
shareholders' equity 132,260 32,060 Total liabilities
and shareholders' equity $ 637,280 $ 613,370
Horizon Global Corporation Condensed Consolidated
Statements of Income (Loss) (Unaudited - dollars in
thousands, except per share amounts) Three months
endedMarch 31, 2017 2016 Net sales
$ 203,280 $ 146,110 Cost of sales (157,890 ) (108,500 ) Gross
profit 45,390 37,610 Selling, general and administrative expenses
(46,120 ) (29,690 ) Net gain (loss) on dispositions of property and
equipment 70 (110 ) Operating profit (loss) (660 ) 7,810
Other expense, net: Interest expense (5,890 ) (4,270 ) Loss
on extinguishment of debt (4,640 ) — Other expense, net (550 ) (610
) Other expense, net (11,080 ) (4,880 ) Income (loss) before income
tax benefit (expense) (11,740 ) 2,930 Income tax benefit (expense)
1,580 (740 ) Net income (loss) (10,160 ) 2,190 Less: Net
(loss) attributable to noncontrolling interest (300 ) — Net
income (loss) attributable to Horizon Global $ (9,860 ) $ 2,190
Net income (loss) per share attributable to Horizon
Global: Basic $ (0.41 ) $ 0.12 Diluted $ (0.41 ) $ 0.12
Weighted average common shares outstanding: Basic 23,839,944
18,095,101 Diluted 23,839,944 18,231,562
Horizon Global
Corporation Condensed Consolidated Statements of Cash
Flows (Unaudited - dollars in thousands) Three
months endedMarch 31, 2017 2016
Cash Flows from Operating Activities: Net income (loss) $
(10,160 ) $ 2,190 Adjustments to reconcile net income (loss) to net
cash used for operating activities: Net (gain) loss on dispositions
of property and equipment (70 ) 110 Depreciation 3,230 2,580
Amortization of intangible assets 2,570 1,790 Amortization of
original issuance discount and debt issuance costs 1,390 460
Deferred income taxes 2,650 1,290 Loss on extinguishment of debt
4,640 — Non-cash compensation expense 930 860 Increase in
receivables (23,720 ) (21,130 ) (Increase) decrease in inventories
(8,200 ) 5,120 Increase in prepaid expenses and other assets (670 )
(2,140 ) Decrease in accounts payable and accrued liabilities
(12,920 ) (14,770 ) Other, net 210 60 Net cash used
for operating activities (40,120 ) (23,580 )
Cash Flows from
Investing Activities: Capital expenditures (7,510 ) (3,420 )
Net proceeds from disposition of property and equipment 110
140 Net cash used for investing activities (7,400 ) (3,280 )
Cash Flows from Financing Activities: Proceeds from
borrowings on credit facilities 340 23,400 Repayments of borrowings
on credit facilities (1,600 ) (23,730 ) Repayments of borrowings on
Term B Loan (183,850 ) (2,500 ) Proceeds from ABL Revolving Debt
51,800 51,700 Repayments of borrowings on ABL Revolving Debt
(31,800 ) (26,700 ) Proceeds from issuance of common stock, net of
offering costs 79,920 — Proceeds from issuance of Convertible
Notes, net of issuance costs 120,940 — Proceeds from issuance of
Warrants, net of issuance costs 20,930 — Payments on Convertible
Note Hedges, inclusive of issuance costs (29,680 ) — Other, net
(240 ) (260 ) Net cash provided by financing activities 26,760
21,910
Effect of exchange rate changes on cash
680 140
Cash and Cash Equivalents: Decrease
for the period (20,080 ) (4,810 ) At beginning of period 50,240
23,520 At end of period $ 30,160 $ 18,710
Supplemental disclosure of cash flow information: Cash paid
for interest $ 4,340 $ 3,740
Horizon Global
Corporation Condensed Consolidated Statements of
Shareholders’ Equity (Unaudited - dollars in thousands)
CommonStock Paid-inCapital
Accumulated Deficit AccumulatedOther
Comprehensive Income (Loss) Total Horizon Global
Shareholders’ Equity Noncontrolling Interest Total
Shareholders’ Equity Balance at December 31, 2016 $ 210 $
54,800 $ (14,310 ) $ (8,340 ) $ 32,360 $ (300 ) $ 32,060 Net loss —
— (9,860 ) — (9,860 ) (300 ) (10,160 ) Other comprehensive income,
net of tax — — — 8,700 8,700 — 8,700 Issuance of common stock, net
of issuance costs 40 79,880 — — 79,920 79,920 Shares surrendered
upon vesting of employees' share based payment awards to cover tax
obligations — (240 ) — — (240 ) — (240 ) Non-cash compensation
expense — 930 — — 930 — 930 Issuance of Warrants, net of issuance
costs — 20,930 — — 20,930 — 20,930 Initial equity component of the
2.75% Convertible Senior Notes due 2022, net of issuance costs and
tax — 19,670 — — 19,670 — 19,670 Convertible Note Hedges, net of
issuance costs and tax — (19,550 ) — — (19,550
) — (19,550 ) Balance at March 31, 2017 $ 250 $
156,420 $ (24,170 ) $ 360 $ 132,860 $ (600 ) $
132,260
Horizon Global CorporationCompany and
Business Segment Financial Information(Unaudited - dollars
in thousands)
We evaluate certain costs, expenses, other charges, gains or
income, collectively described as “Special Items,” that are
included in the determination of operating profit (loss) under
GAAP, but that management would consider important in evaluating
the quality of the Company’s operating results as they are not
indicative of the Company’s core operating results or may obscure
trends useful in evaluating the Company’s continuing activities.
Accordingly, the Company presents adjusted operating profit
excluding these Special Items to help investors evaluate our
operating performance and trends in our business consistent with
how management evaluates such performance and trends.
Three months ended March 31, 2017
2016 Horizon Americas Net sales $ 97,830 $ 110,620
Operating profit $ 5,160 $ 10,020 Special Items to consider in
evaluating operating profit: Severance and business restructuring
costs $ — $ 710 Adjusted operating profit $ 5,160 $ 10,730
Horizon Europe-Africa Net sales $ 78,540 $ 12,710 Operating
profit (loss) $ (350 ) $ 310 Special Items to consider in
evaluating operating profit: Severance and business restructuring
costs $ 2,130 $ 10 Acquisition costs $ (190 ) $ — Adjusted
operating profit $ 1,590 $ 320
Horizon Asia-Pacific
Net sales $ 26,910 $ 22,780 Operating profit $ 3,070 $ 2,230
Corporate Expenses Operating loss $ (8,540 ) $ (4,750 )
Special Items to consider in evaluating operating loss: Acquisition
costs $ 2,330 $ — Adjusted operating loss $ (6,210 ) $ (4,750 )
Total Company Net sales $ 203,280 $ 146,110 Operating
profit (loss) $ (660 ) $ 7,810 Total Special Items to consider in
evaluating operating profit (loss) $ 4,270 $ 720 Adjusted operating
profit $ 3,610 $ 8,530
Appendix I
Horizon Global CorporationAdditional
Information Regarding Special Items ImpactingReported GAAP
Financial Measures(Unaudited - dollars in thousands, except
per share amounts)
This appendix details certain costs, expenses, other charges,
gains or income, collectively described as ‘’Special Items,’’ that
are included in the determination of net income under GAAP, but
that management would not consider important in evaluating the
quality of the Company’s operating results as they are not
indicative of the Company’s core operating results or may obscure
trends useful in evaluating the Company’s continuing activities.
Accordingly, the Company presents adjusted net income and adjusted
diluted earnings per share excluding these Special Items to help
investors evaluate our operating performance and trends in our
business consistent with how management evaluates such performance
and trends.
Three months endedMarch 31, 2017
2016 Net income (loss) attributable to Horizon Global, as
reported $ (9,860 ) $ 2,190
Impact of Special Items to
consider in evaluating quality of income (loss): Severance and
business restructuring costs 2,130 720 Acquisition costs 2,140 —
Loss on extinguishment of debt 4,640 — Tax impact of Special Items
(3,110 ) (130 )
Adjusted net income (loss) $ (4,060 ) $
2,780
Three months
endedMarch 31, 2017 2016 Diluted
earnings (loss) per share attributable to Horizon Global, as
reported $ (0.41 ) $ 0.12
Impact of Special Items to
consider in evaluating quality of EPS: Severance and business
restructuring costs 0.09 0.04 Acquisition costs 0.09 — Loss on
extinguishment of debt 0.19 — Tax impact of Special Items (0.13 )
(0.01 )
Adjusted earnings (loss) per share $ (0.17 ) $ 0.15
Weighted-average shares outstanding, diluted, as
reported 23,839,944 18,231,562
Appendix II
Horizon Global
CorporationReconciliation of Reported Revenue
Growthto Constant Currency Basis(Unaudited)
We evaluate growth in our operations on both an as reported and
a constant currency 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 endedMarch 31, 2017 Horizon
Americas Horizon
Europe-Africa
Horizon
Asia-Pacific
Consolidated Revenue growth as reported (11.6 )%
517.9 % 18.1 % 39.1 % Less: currency impact 0.4 % (5.1 )%
4.6 % 0.6 % Revenue growth at constant currency (12.0 )% 523.0 %
13.5 % 38.5 %
Appendix III
Horizon Global CorporationLTM Bank
EBITDA as Defined in Credit Agreement(Unaudited - dollars in
thousands)
This appendix reconciles net income to “Consolidated Bank
EBITDA” as defined in our credit agreement. We believe this
reconciliation provides valuable supplemental information regarding
our capital structure, consistent with how we evaluate our
performance.
Less: Add: Year Ended
December 31, 2016 Three Months Ended March 31, 2016
Three Months Ended March 31, 2017 Twelve Months Ended
March 31, 2017 Net income (loss) attributable to Horizon Global
$ (12,360 ) $ 2,190 $ (9,860 ) $ (24,410 ) Bank stipulated
adjustments: Interest expense, net (as defined) 20,080 4,270 5,890
21,700 Income tax expense (benefit) (3,730 ) 740 (1,580 ) (6,050 )
Depreciation and amortization 18,220 4,370 5,800 19,650
Extraordinary charges 6,830 — — 6,830 Non-cash compensation
expense(a) 3,860 860 930 3,930 Other non-cash expenses or losses
16,460 310 180 16,330 Pro forma EBITDA of permitted acquisition
13,910 7,030 — 6,880 Interest-equivalent costs associated with any
Specified Vendor Receivables Financing 1,200 220 180 1,160 Debt
extinguishment costs — — 4,640 4,640 Items limited to 25% of
consolidated EBITDA: Non-recurring expenses (b) 4,190 370 — 3,820
Acquisition integration costs (c) 4,290 — 4,270 8,560 Synergies
related to permitted acquisition (d) 12,500 — (1,640 ) 10,860
EBITDA limitation for non-recurring expenses (e) (4,860 ) —
(5,710 ) (10,570 ) Consolidated Bank EBITDA, as defined $ 80,590
$ 20,360 $ 3,100 $ 63,330
March 31, 2017 Total Consolidated Indebtedness (f) $ 242,970
Consolidated Bank EBITDA, as defined 63,330 Actual leverage
ratio 3.84 x Covenant requirement 5.25 x
_________________________________
(a) Non-cash compensation expenses resulting from the grant
of restricted shares of common stock and common stock options. (b)
Under our credit agreement, costs and expenses related to cost
savings projects, including restructuring and severance expenses,
are not to exceed $5 million in any fiscal year and $20 million in
aggregate, commencing on or after January 1, 2015. (c) Under our
credit agreement, costs and expenses related to the integration of
the Westfalia Group acquisition, are not to exceed $10 million in
any fiscal year and $30 million in aggregate. (d) Under our credit
agreement, the add back for the amount of reasonably identifiable
and factually supportable “run rate” cost savings, operating
expense reductions, and other synergies cannot exceed $12.5 million
for the Westfalia Group acquisition. (e) The amounts added to
Consolidated Net Income pursuant to items in notes (b), (c), and
(d) shall not exceed 25% of Consolidated EBITDA, excluding these
items, for such period. (f) “Total Consolidated Indebtedness”
refers to the sum of “long-term debt” and “current maturities,
long-term debt”, excluding certain credit facilities as defined in
our Credit Agreement less domestic cash of $5.2 million and 65% of
foreign cash, or $16.3 million, as of March 31, 2017
Appendix IV
Horizon Global Corporation2017
Guidance Reconciliation(Unaudited - dollars in thousands,
except per share amounts)
The Company provides guidance for adjusted operating profit and
adjusted diluted earnings per share, which exclude “Special Items,”
that are included in the determination of operating profit and
diluted earnings per share under GAAP. “Special Items” are certain
costs, expenses, other charges, gains or income, that management
would not consider important in evaluating the quality of the
Company’s operating results as they are not indicative of the
Company’s core operating results or may obscure trends useful in
evaluating the Company’s continuing activities. Accordingly, the
Company provides guidance for adjusted operating profit and
adjusted diluted earnings per share, excluding these Special Items
to help investors evaluate our operating performance and trend in
our business consistent with how management evaluates such
performance and trends. The following appendix reconciles the
non-GAAP financial measures the Company provides guidance on to the
most comparable GAAP measure.
Per share guidance provided below does not include any impact of
the share repurchase program.
Full Year Guidance:
Year ending on December 31, 2017 Year
ended
December 31, 2016
Low End of Guidance High End of Guidance
Revenue $ 844,000 $ 876,400
$ 649,200 Operating Profit 40,000 4.7 % 46,000 5.2 % 6,300
1.0 % Estimated Special Items 13,000 1.5 % 13,000 1.5
% 30,860 4.8 % Adjusted Operating Profit $ 53,000 6.3 % $
59,000 6.7 % $ 37,160 5.7 % Basis Point Improvement 60 bps 100 bps
Year ending on December 31, 2017 Low End of
Guidance High End of Guidance Diluted EPS $ 0.50
$ 0.60 Impact of Special Items (including tax impact) 0.44
0.44 Adjusted Diluted EPS $ 0.94 $ 1.04 Estimated
Diluted Weighted Average Common Shares Outstanding 25,700,000
25,700,000
Second Quarter 2017
Guidance:
Three months ending on June 30, 2017 Low End of
Guidance High End of Guidance Diluted EPS $ 0.61
$ 0.66 Impact of Special Items (including tax impact) 0.06
0.06 Adjusted Diluted EPS $ 0.67 $ 0.72 Estimated
Diluted Weighted Average Common Shares Outstanding 26,000,000
26,000,000
First Half 2017
Guidance:
Six months ending on June 30, 2017 Low End of
Guidance High End of Guidance Diluted EPS $ 0.23
$ 0.28 Impact of Special Items (including tax impact) 0.29
0.29 Adjusted Diluted EPS $ 0.52 $ 0.57 Estimated
Diluted Weighted Average Common Shares Outstanding 25,200,000
25,200,000
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version on businesswire.com: http://www.businesswire.com/news/home/20170503006706/en/
Horizon Global CorporationMaria C. DueyVice President, Corporate
Development & Investor Relations(248)
593-8810mduey@horizonglobal.com
Horizon Global (NYSE:HZN)
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