Company successfully refinances ABL and names
Dennis E. Richardville as Chief Financial Officer
Fourth Quarter
Highlights
- Successful amendment of our ABL to stabilize liquidity and
support future operating flexibility
- Net sales of $142.3 million; increase of $4.5 million, or 3.3%,
over prior-year comparable period
- Operating loss of $33.7 million, or (23.7)% of net sales;
improvement of $0.6 million over prior-year comparable period
- Net loss from continuing operations of $32.0 million;
improvement of $18.1 million over prior-year comparable period
- Adjusted EBITDA(2) of $(16.5) million; down $1.2 million from
prior-year comparable period
Full Year Highlights
- Completed sale of Horizon Asia-Pacific business segment
("APAC"); significantly improved leverage and provided additional
liquidity and operating flexibility
- Completed refinancing of debt structure to support business
realignment and allow for increased covenant flexibility
- Net sales of $690.5 million; decrease of $23.5 million, or
3.3%, from prior year
- Operating loss of $57.2 million, or (8.3)% of net sales;
improvement of $133.4 million over prior year
- Net loss from continuing operations of $110.0 million;
improvement of $109.4 million over prior year
- Adjusted EBITDA(2) of $(8.3) million; down $16.0 million from
prior year
Horizon Global Corporation (NYSE: HZN), one of the world’s
leading manufacturers of branded towing and trailering equipment,
today reported fourth quarter and full year financial results for
2019, closing a year of strategic business realignment and
management refocus to drive its operational improvement
initiatives.
“Since my appointment as CEO in September 2019, I am encouraged
by the progress we have made," stated Terry Gohl, Horizon Global's
President and Chief Executive Officer. "We are executing our
operational improvement initiatives across all facets of the
business and we continue to identify new opportunities every day.
We are moving with speed and purpose to improve our underlying
operations and service to our customers. We expect that our
progress will result in substantially improved margins and free
cash flow, and, importantly, create value for our shareholders in
2020 and beyond."
Gohl added, "Horizon Global undertook a competitive process to
refinance our ABL. The process demonstrated significant lender
confidence in our operational improvement initiatives plan and the
operating and financial results that we expect to deliver. On March
13, 2020, The Company entered into an agreement with Encina
Business Credit, LLC that will provide the Company with the
liquidity and financial flexibility necessary to drive our
operational improvement initiatives in 2020."
Gohl continued, "I am also pleased to announce the appointment
of Dennis Richardville as our Chief Financial Officer. Dennis is a
proven leader with extensive automotive experience. Dennis was
instrumental in the success of our recent refinancing and we look
forward to his significant contribution to our short- and long-term
strategic initiatives."
2019 Fourth Quarter Segment
Results
Horizon Americas. Net sales were $72.1 million,
representing an increase of $1.2 million, or 1.6%, over prior-year
comparable period. Net sales in the automotive OEM and e-commerce
sales channels were up a combined $5.3 million, partially offset by
a combined $4.2 million decrease in sales in the retail, industrial
and aftermarket sales channels. Gross profit increased $3.4
million, in part due to reduced fines and penalties in the retail
sales channel, partially offset by $3.5 million of increased scrap
costs and inventory reserves. Operating loss was $(16.2) million as
compared to $(11.6) million during the prior-year comparable
period, with gross profit improvement more than offset by a
one-time $6.5 million SG&A expense due to the abandonment of an
automated stock retrieval system operating lease. Adjusted
EBITDA(2) decreased to $(5.6) million as compared to $(1.8) million
during the prior-year comparable period, attributable to overall
operational underperformance after adjustments for special
items.
Horizon Europe-Africa. Net sales were $70.2 million,
representing an increase of $3.4 million, or 5.1%, over prior-year
comparable period. Net sales in the automotive OEM, automotive OES
and aftermarket sales channels were up a combined $7.0 million. The
increase in net sales was partially offset by a $3.2 million
decrease attributable to sales in 2018 from a non-automotive
business that was divested in the first quarter of 2019. After
removing the impacts of currency translation, net sales on a
constant currency(1) basis increased $5.7 million, or 8.6%. Gross
profit decreased $0.7 million, due to an unfavorable shift in sales
mix to lower margin automotive OEM business, coupled with $2.6
million of increased scrap costs and inventory reserves. Operating
loss was $(12.2) million as compared to $(16.5) million during the
prior-year comparable period. Adjusted EBITDA(2) increased to
$(5.9) million as compared to $(8.5) million during the prior-year
comparable period, attributable to higher sales and cost
savings.
Balance Sheet and Liquidity. Gross debt decreased to
$236.6 million, a $145.7 million reduction from December 31, 2018.
Total liquidity, which includes borrowing availability under the
ABL and cash on-hand, was $44.9 million, an increase of $20.7
million over prior year end, after removing any prior-year impacts
related to the APAC discontinued operations reporting.
Refinancing of Revolving Credit
Facility
On March 13, 2020, the Company entered into a Loan and Security
Agreement (the “Loan Agreement”) with Encina Business Credit, LLC,
as agent for the lenders party thereto. The Loan Agreement provides
for an asset-based revolving credit facility in the maximum
aggregate principal amount of $75,000,000, subject to customary
borrowing base limitations contained therein, which amount may be
increased at the Company’s request by up to $25,000,000. A portion
of the proceeds received by the Company under the Loan Agreement
were used to pay in full all outstanding debt incurred under the
Amended and Restated Loan Agreement, dated as of June 30, 2015,
with Bank of America, N.A., as administrative agent, and the
lenders party thereto.
The interest on the loans under the Loan Agreement will be
payable in cash at the interest rate of LIBOR plus a margin of
4.00% per annum, subject to a 1.00% LIBOR floor. There are no
amortization payments required under the Loan Agreement. Borrowings
under the Loan Agreement have a maturity of up to three years,
subject to the maturity of certain of the Company's other debt
facilities. Indebtedness under the Loan Agreement is and will be
secured by the inventory and receivables of the Company's U.S. and
Canadian subsidiaries.
Appointment of Chief Financial
Officer
The Company today announced that Dennis Richardville has been
named the Company’s Chief Financial Officer, effective
immediately.
Mr. Richardville has served as Vice President and Corporate
Treasurer for the Company since January 2020. Prior to joining the
Company, Mr. Richardville served as chief financial officer of Dura
Automotive Systems, LLC, from August 2019 to September 2019. Mr.
Richardville served as executive vice president and chief financial
officer of International Automotive Components Group, SA (“IAC”), a
leading global supplier of automotive components and systems,
including interior and exterior trim, from 2012 to 2019. From 2007
to 2012, Mr. Richardville served as vice president and global
corporate controller for IAC. Prior to joining IAC, Mr.
Richardville held various finance positions with Lear Corporation,
Wesley Industries, Inc., MSX International, Inc. and Hayes Lemmerz
International Inc. from 1999 to 2007.
The Company also announced that Richard Jok, who is currently on
medical leave and has been serving as the Company’s interim Chief
Financial Officer since December 13, 2019, will return to his role
as the Company’s Vice President, Financial Planning and
Analysis.
Summary
Gohl commented, “Horizon Global's 2019 results reflect the many
challenges we faced during the year. We are not satisfied with this
performance, we expect this company to be an industry leader and we
are confident that we have the team, brands and focus to solidify
ourselves as the supplier of choice across the markets we serve. We
will continue to execute our well defined operational improvement
initiatives and capitalize on new opportunities. Our focus will
continue to be on operational excellence, margin expansion and free
cash flow. In 2020, we are optimistic that Horizon Global will
deliver on its initiatives, meet and exceed customer expectations
and create value for our shareholders."
Conference Call Details
Horizon Global will host a conference call regarding fourth
quarter and full year 2019 earnings on Monday, March 16, 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 10139596.
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 (877) 344-7529 and from outside the
U.S. at (412) 317-0088. Please use the conference identification
number 10139596. The telephone replay will be available
approximately two hours after the end of the call and continue
through March 30, 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 3,600 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 Company’s leverage; 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 our 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; the Company's
ability to refinance its debt, on commercially acceptable terms or
at all; the Company’s ability to maintain compliance with the New
York Stock Exchange’s continued listing standards; factors
affecting the Company's business that are outside of its control,
including natural disasters, pandemics (such as the coronavirus
(COVID-19)), 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)
We evaluate results 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 results, 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.
(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.
Horizon Global
Corporation
Condensed Consolidated Balance
Sheets
(Dollars in thousands)
December 31, 2019
December 31, 2018
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
11,770
$
27,650
Receivables, net
71,680
95,170
Inventories
136,650
152,200
Prepaid expenses and other current
assets
8,570
8,270
Current assets held-for-sale
—
36,080
Total current assets
228,670
319,370
Property and equipment, net
75,830
86,500
Operating lease right-of-use assets
45,770
—
Goodwill
4,350
4,500
Other intangibles, net
60,120
69,400
Deferred income taxes
430
660
Non-current assets held-for-sale
—
34,790
Other assets
5,870
6,130
Total assets
$
421,040
$
521,350
Liabilities and Shareholders'
Equity
Current liabilities:
Short-term borrowings and current
maturities, long-term debt
$
4,310
$
13,860
Accounts payable
78,450
102,350
Short-term operating lease liabilities
9,880
—
Current liabilities held-for-sale
—
28,080
Accrued liabilities
48,850
58,520
Total current liabilities
141,490
202,810
Gross long-term debt
236,550
382,220
Unamortized debt issuance costs and
discount
(31,500
)
(31,570
)
Long-term debt
205,050
350,650
Deferred income taxes
4,040
12,620
Long-term operating lease liabilities
48,070
—
Non-current liabilities held-for-sale
—
1,740
Other long-term liabilities
13,790
19,750
Total liabilities
412,440
587,570
Total Horizon Global shareholders' equity
(deficit)
12,340
(63,720
)
Noncontrolling interest
(3,740
)
(2,500
)
Total shareholders' equity (deficit)
8,600
(66,220
)
Total liabilities and shareholders'
equity
$
421,040
$
521,350
Horizon Global
Corporation
Consolidated Statements of
Operations (unaudited)
(Dollars in thousands, except
per share amounts)
Three months ended December
31,
Twelve months ended December
31,
2019
2018
2019
2018
Net sales
$
142,280
$
137,760
$
690,450
$
714,010
Cost of sales
(134,210
)
(132,410
)
(594,220
)
(604,530
)
Gross profit
8,070
5,350
96,230
109,480
Selling, general and administrative
expenses
(41,040
)
(36,920
)
(154,180
)
(171,130
)
Impairment of goodwill and intangible
assets
—
(1,000
)
—
(126,770
)
Net gain (loss) on dispositions of
property and equipment
(720
)
(1,690
)
780
(2,210
)
Operating loss
(33,690
)
(34,260
)
(57,170
)
(190,630
)
Other income (expense), net
1,220
(3,710
)
(5,390
)
(12,800
)
Interest expense
(8,000
)
(7,870
)
(58,270
)
(27,450
)
Loss from continuing operations before
income tax
(40,470
)
(45,840
)
(120,830
)
(230,880
)
Income tax benefit (expense)
8,490
(4,250
)
10,820
11,520
Net loss from continuing operations
(31,980
)
(50,090
)
(110,010
)
(219,360
)
Income from discontinued operations, net
of income taxes
—
3,110
189,520
14,460
Net (loss) income
(31,980
)
(46,980
)
79,510
(204,900
)
Less: Net loss attributable to
noncontrolling interest
(400
)
(220
)
(1,240
)
(940
)
Net (loss) income attributable to Horizon
Global
$
(31,580
)
$
(46,760
)
$
80,750
$
(203,960
)
Net (loss) income per share
attributable to Horizon Global:
Basic:
Continuing operations
$
(1.24
)
$
(1.98
)
$
(4.30
)
$
(8.72
)
Discontinued operations
—
0.12
7.49
0.58
Total
$
(1.24
)
$
(1.86
)
$
3.19
$
(8.14
)
Diluted:
Continuing operations
$
(1.24
)
$
(1.98
)
$
(4.30
)
$
(8.72
)
Discontinued operations
—
0.12
7.49
0.58
Total
$
(1.24
)
$
(1.86
)
$
3.19
$
(8.14
)
Weighted average common shares
outstanding:
Basic
25,387,388
25,127,022
25,297,576
25,053,013
Diluted
25,387,388
25,127,022
25,297,576
25,053,013
Horizon Global
Corporation
Consolidated Statements of
Cash Flows (unaudited)
(Dollars in thousands)
Twelve months ended December
31,
2019
2018
Cash Flows from Operating
Activities:
Net income (loss)
$
79,510
$
(204,900
)
Less: Net income from discontinued
operations
189,520
14,460
Net loss from continuing operations
(110,010
)
(219,360
)
Adjustments to reconcile net loss from
continuing operations to net cash used for operating
activities:
Net (gain) loss on dispositions of
property and equipment
(780
)
2,210
Depreciation
15,940
12,330
Amortization of intangible assets
5,750
8,250
Write off of operating lease assets
10,780
—
Impairment of goodwill and intangible
assets
—
126,770
Amortization of original issuance discount
and debt issuance costs
22,060
8,330
Deferred income taxes
(7,280
)
1,120
Non-cash compensation expense
2,150
1,550
Paid-in-kind interest
9,720
—
Decrease (increase) in receivables
19,290
(22,590
)
Decrease (increase) in inventories
8,380
(6,940
)
(Increase) decrease in prepaid expenses
and other assets
(2,990
)
6,230
Decrease in accounts payable and accrued
liabilities
(30,140
)
(9,520
)
Other, net
(11,350
)
(3,990
)
Net cash used for operating activities
(68,480
)
(95,610
)
Cash Flows from Investing
Activities:
Capital expenditures
(9,720
)
(11,260
)
Net proceeds from sale of business
214,570
—
Net proceeds from disposition of property
and equipment
1,620
80
Net cash provided by (used for) investing
activities
206,470
(11,180
)
Cash Flows from Financing
Activities:
Net cash (used for) provided by financing
activities
(164,710
)
82,360
Discontinued Operations:
Net cash provided by discontinued
operating activities
11,430
25,110
Net cash used for discontinued investing
activities
(1,120
)
(2,490
)
Net cash provided by discontinued
financing activities
—
—
Net cash provided by discontinued
operations
10,310
22,620
Effect of exchange rate changes on cash
and cash equivalents
530
(110
)
Cash and Cash Equivalents:
Decrease for the year
(15,880
)
(1,920
)
At beginning of year
27,650
29,570
At end of year
$
11,770
$
27,650
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
20,060
$
18,630
Cash paid for taxes, net of refunds
$
80
$
650
Segment Information
The following table summarizes financial information for our
operating segments for the three and twelve months ended December
31, 2019 and 2018:
Three months ended December
31,
Change
2019
2018
$
%
(unaudited, dollars in
thousands)
Net Sales
Horizon Americas
$
72,050
$
70,930
$
1,120
1.6
%
Horizon Europe‑Africa
70,230
66,830
3,400
5.1
%
Total
$
142,280
$
137,760
$
4,520
3.3
%
Gross Profit
Horizon Americas
$
9,560
$
6,180
$
3,380
54.7
%
Horizon Europe‑Africa
(1,490
)
(830
)
(660
)
79.5
%
Total
$
8,070
$
5,350
$
2,720
50.8
%
Operating Loss
Horizon Americas
$
(16,150
)
$
(11,570
)
$
(4,580
)
39.6
%
Horizon Europe‑Africa
(12,220
)
(16,480
)
4,260
(25.8
)%
Corporate
(5,320
)
(6,210
)
890
(14.3
)%
Total
$
(33,690
)
$
(34,260
)
$
570
(1.7
)%
Adjusted EBITDA
Horizon Americas
$
(5,570
)
$
(1,810
)
$
(3,760
)
207.7
%
Horizon Europe-Africa
(5,930
)
(8,490
)
2,560
(30.2
)%
Corporate
(5,000
)
(5,040
)
40
(0.8
)%
Total
$
(16,500
)
$
(15,340
)
$
(1,160
)
7.6
%
Twelve months ended December
31,
Change
2019
2018
$
%
(unaudited, dollars in
thousands)
Net Sales
Horizon Americas
$
372,720
$
390,750
$
(18,030
)
(4.6
)%
Horizon Europe‑Africa
317,730
323,260
(5,530
)
(1.7
)%
Total
$
690,450
$
714,010
$
(23,560
)
(3.3
)%
Gross Profit
Horizon Americas
$
71,640
$
79,930
$
(8,290
)
(10.4
)%
Horizon Europe‑Africa
24,590
29,550
(4,960
)
(16.8
)%
Total
$
96,230
$
109,480
$
(13,250
)
(12.1
)%
Operating Loss
Horizon Americas
$
(10,390
)
$
(6,840
)
$
(3,550
)
51.9
%
Horizon Europe‑Africa
(12,100
)
(148,630
)
136,530
(91.9
)%
Corporate
(34,680
)
(35,160
)
480
(1.4
)%
Total
$
(57,170
)
$
(190,630
)
$
133,460
(70.0
)%
Adjusted EBITDA
Horizon Americas
$
8,430
$
26,050
$
(17,620
)
(67.6
)%
Horizon Europe-Africa
2,770
200
2,570
1,285.0
%
Corporate
(19,510
)
(18,570
)
(940
)
5.1
%
Total
$
(8,310
)
$
7,680
$
(15,990
)
(208.2
)%
Appendix I
Horizon Global Corporation Company and
Business Segment Financial Information (Unaudited - dollars in
thousands)
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. Adjusted EBITDA, 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 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 for our operating
segments for the three and twelve months ended December 31, 2019
and 2018:
Twelve months ended December
31, 2019
Twelve months ended December
31, 2018
Variance
Horizon Americas
Horizon Europe- Africa
Corporate
Consolidated
Horizon Americas
Horizon Europe- Africa
Corporate
Consolidated
Consolidated
(dollars in thousands)
(dollars in thousands)
Net income (loss) attributable to
Horizon Global
$
80,750
$
(203,960
)
$
284,710
Net loss attributable to noncontrolling
interest
(1,240
)
(940
)
(300
)
Net income (loss)
79,510
(204,900
)
284,410
Interest expense
58,270
27,450
30,820
Income tax benefit
(10,820
)
(11,520
)
700
Depreciation and amortization
21,690
20,580
1,110
EBITDA
(4,320
)
(3,370
)
156,340
148,650
(5,770
)
(136,610
)
(26,010
)
(168,390
)
317,040
Net loss attributable to noncontrolling
interest
—
1,240
—
1,240
—
940
—
940
300
Income from discontinued operations, net
of tax
—
—
(189,520
)
(189,520
)
—
—
(14,460
)
(14,460
)
(175,060
)
Severance
(200
)
1,330
2,050
3,180
5,050
3,060
3,950
12,060
(8,880
)
Restructuring, relocation and related
business disruption costs
9,500
(1,190
)
3,990
12,300
19,690
3,200
—
22,890
(10,590
)
Impairment of goodwill and intangible
assets
—
—
—
—
—
126,770
—
126,770
(126,770
)
Non-cash stock compensation
—
—
2,150
2,150
—
—
1,550
1,550
600
Acquisition and integration costs
—
—
—
—
—
1,390
15,870
17,260
(17,260
)
Loss on business divestitures and other
assets
2,070
3,630
—
5,700
6,690
—
—
6,690
(990
)
Board transition support
—
—
1,450
1,450
—
—
—
—
1,450
Product liability and litigation
claims
820
1,760
—
2,580
—
1,340
—
1,340
1,240
Debt issuance costs
—
—
4,070
4,070
—
—
—
—
4,070
Unrealized foreign currency remeasurement
costs
—
(180
)
130
(50
)
50
330
490
870
(920
)
Other
560
(450
)
(170
)
(60
)
340
(220
)
40
160
(220
)
Adjusted EBITDA
$
8,430
$
2,770
$
(19,510
)
$
(8,310
)
$
26,050
$
200
$
(18,570
)
$
7,680
$
(15,990
)
Three months ended December
31, 2019
Three months ended December
31, 2018
Variance
Horizon Americas
Horizon Europe- Africa
Corporate
Consolidated
Horizon Americas
Horizon Europe- Africa
Corporate
Consolidated
Consolidated
(dollars in thousands)
(dollars in thousands)
Net loss attributable to Horizon
Global
$
(31,580
)
$
(46,760
)
$
15,180
Net loss attributable to noncontrolling
interest
(400
)
(220
)
(180
)
Net loss
(31,980
)
(46,980
)
15,000
Interest expense
8,000
7,870
130
Income tax (benefit) expense
(8,490
)
4,250
(12,740
)
Depreciation and amortization
4,900
5,510
(610
)
EBITDA
(14,280
)
(7,920
)
(5,370
)
(27,570
)
(13,530
)
(12,440
)
(3,380
)
(29,350
)
1,780
Net loss attributable to noncontrolling
interest
—
400
—
400
—
220
—
220
180
Income from discontinued operations, net
of tax
—
—
—
—
—
—
(3,120
)
(3,120
)
3,120
Severance
—
1,320
430
1,750
40
1,500
1,200
2,740
(990
)
Restructuring, relocation and related
business disruption costs
8,390
220
(260
)
8,350
7,860
380
—
8,240
110
Impairment of goodwill and other
intangibles
—
—
—
—
—
1,000
—
1,000
(1,000
)
Non-cash stock compensation
—
—
330
330
—
—
110
110
220
Acquisition and integration costs
—
—
—
—
—
—
(260
)
(260
)
260
Loss on business divestitures and other
assets
790
—
—
790
3,130
—
—
3,130
(2,340
)
Product liability and litigation
claims
—
1,710
—
1,710
—
1,340
—
1,340
370
Debt issuance costs
—
—
(280
)
(280
)
—
—
—
—
(280
)
Unrealized foreign currency remeasurement
costs
(160
)
(1,390
)
(310
)
(1,860
)
(60
)
(420
)
290
(190
)
(1,670
)
Other
(310
)
(270
)
460
(120
)
750
(70
)
120
800
(920
)
Adjusted EBITDA
$
(5,570
)
$
(5,930
)
$
(5,000
)
$
(16,500
)
$
(1,810
)
$
(8,490
)
$
(5,040
)
$
(15,340
)
$
(1,160
)
Appendix II
Horizon Global Corporation Reconciliation of
Reported Revenue Growth to Constant Currency Basis
(Unaudited)
We evaluate results 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 results, 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 December
31, 2019
Twelve months ended December
31, 2019
Horizon Americas
Horizon Europe-Africa
Consolidated
Horizon Americas
Horizon Europe-Africa
Consolidated
Revenue growth as reported
1.6
%
5.1
%
3.3
%
(4.6
)%
(1.7
)%
(3.3
)%
Less: currency impact
(0.1
)%
(3.5
)%
(1.8
)%
(0.1
)%
(5.8
)%
(2.7
)%
Revenue growth at constant currency
1.7
%
8.6
%
5.1
%
(4.5
)%
4.1
%
(0.6
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200316005322/en/
Jeff Tryka, CFA Investor Relations, Lambert & Co. (616)
295-2509 jtryka@horizonglobal.com
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