Horizon Global Reports Financial Results for the Fourth Quarter and Full Year 2020 – Yahoo Finance

Fourth Quarter and Recent Highlights

Net sales of $175.9 million; increase of $33.6 million, or 23.6%, compared to prior year comparable period

Operating loss of $0.8 million, $32.9 million improvement compared to prior year comparable period

Net loss from continuing operations of $5.8 million; $26.2 million improvement compared to prior year comparable period

Adjusted EBITDA(1) of $7.3 million; $23.8 million improvement compared to prior year comparable period

Entered into $225.0 million term loan, including $125.0 million delayed draw facility; proceeds repaid existing term loan and will repay outstanding convertible notes; reduced interest rate with flexible financial covenants in support of Company's long-term strategic initiatives

Full Year Highlights

$39.1 million of cash generated from operating activities; $107.6 million improvement over prior year

Cash and availability(2) of $83.4 million; $38.5 million improvement over prior year

Net sales of $661.2 million; decrease of $29.2 million, or 4.2%, compared to prior year

Operating loss of $6.9 million; $50.3 million improvement compared to prior year

Net loss from continuing operations of $37.5 million; $72.5 million improvement compared to prior year

Adjusted EBITDA(1) of $26.4 million; $34.7 million improvement compared to prior year

Horizon Global Corporation (NYSE: HZN), one of the worlds leading manufacturers of branded towing and trailering equipment, today reported fourth quarter and full year financial results for 2020.

"2020 was a transformational year for Horizon Global as reflected by significant year-over-year improvements in profitability and cash flow generation," stated Terry Gohl, Horizon Globals President and Chief Executive Officer. "We entered 2020 with great momentum and high expectations for the turnaround of the Company. While we immediately faced unprecedented macro-economic challenges due to the global pandemic, the team maintained its focus and ultimately delivered significant value to our shareholders as well as all of our key stakeholders. To offset commercial headwinds in early 2020, we accelerated the execution of our operational improvement initiatives, including the operational transformation of Mexico manufacturing and Americas distribution, streamlining our Americas product portfolio and rationalizing our Europe-Africa distribution footprint. This resulted in improved productivity and throughput, which enabled us to deliver on customer commitments and further solidified Horizon Global as the supplier of choice during the second half of the year. Our strong financial performance allowed us to opportunistically address our full capital structure in early 2021, resulting in a new term loan with a lower interest rate, flexible covenants and other favorable terms that enable us to pursue our long-term strategic plan."

Story continues

2020 Fourth Quarter Segment Results

Horizon Americas. Net sales increased $24.7 million, or 34.3%, to $96.8 million. The net sales increase was primarily driven by a $13.3 million increase in the aftermarket sales channel, as well as a $7.5 million combined increase in the retail and e-commerce sales channels. Gross profit increased $15.6 million, due to higher net sales and operational improvements and manufacturing efficiencies, including favorable manufacturing costs, as well as lower scrap and inventory reserves. Horizon Americas generated operating profit of $8.6 million, an increase of $24.8 million compared to the prior year comparable period, driven by the segment's favorable gross profit, coupled with $8.6 million lower SG&A. Adjusted EBITDA(1) increased to $10.9 million for the quarter, as compared to $(5.6) million for the prior year comparable period.

Horizon Europe-Africa. Net sales increased $8.9 million, or 12.6%, to $79.1 million. The net sales increase was primarily driven by a $5.9 million combined increase in the automotive OEM and automotive OES sales channels, as well as a $3.1 million increase in the aftermarket sales channels. Gross profit increased $9.2 million, due to higher net sales coupled with favorable material input costs and labor efficiencies. Horizon Europe-Africa generated an operating loss of $(2.4) million, an improvement of $9.9 million compared to the prior year comparable period, driven by the segment's favorable gross profit. Adjusted EBITDA(1) increased to $2.5 million for the quarter, as compared to a loss of $(5.9) million for the prior year comparable period.

Balance Sheet and Liquidity. Cash and Availability(2) was $83.4 million, an increase of $38.5 million compared to the end of the prior year comparable period. Working Capital(3) was $55.6 million, a reduction of $34.0 million compared to the end of the prior year comparable period. Gross debt increased $25.2 million to $266.1 million over the prior year comparable period, primarily reflecting increased borrowings in the first two quarters of 2020 to strengthen liquidity in response to the COVID-19 pandemic.

Summary

Gohl commented, "Horizon Globals 2020 performance is testament to the hard work and dedication of each and every member of our global team. We established a culture of continuous improvement and we are not taking our foot off the gas in 2021. We will build on our positive momentum and remain laser focused on our strategic plan and operational excellence. With our current open order book, brand recognition and customer confidence, we believe we are well positioned to drive margin expansion, profitability improvement and increased cash flow generation."

Conference

Horizon Global will host a conference call regarding fourth quarter and full year 2020 earnings on Thursday, March 11, 2021 at 8:30 a.m. Eastern Time. The conference call will be hosted by Horizon Global's President and Chief Executive Officer, Terry Gohl, and Dennis Richardville, Chief Financial Officer. Participants on the call are asked to register five to ten minutes prior to the scheduled start time by dialing (844) 825-9786 and from outside the U.S. at (412) 902-4185. Please use the conference identification number 10152299.

The fourth quarter and full-year 2020 results and supplemental materials, including a presentation in PDF format, will be distributed before the market opens on March 11, 2021, and will be available on the Companys website at http://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 Companys website.

A replay of the call will be available on Horizon Globals 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 10152299. The telephone replay will be available approximately two hours after the end of the call and continue through March 25, 2021.

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 Companys 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 worlds most recognized brands in the towing and trailering industry, including: Draw-Tite, Reese, Westfalia, BULLDOG, Fulton and Tekonsha. Horizon Global has approximately 4,000 employees.

For more information, please visit http://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 COVID-19 pandemic on the Companys business, results of operations, financial condition and liquidity; the Companys ability to maintain compliance with the New York Stock Exchanges continued listing standards; the Companys debt, including the Companys ability to comply with the applicable financial covenants related thereto; liabilities and restrictions imposed by the Companys 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 Companys accounting policies; future trends; general economic and currency conditions; various conditions specific to the Companys business and industry; the success of the Companys action plan, including the actual amount of savings and timing thereof; the success of the Companys business improvement initiatives in Europe-Africa, including the amount of savings and timing thereof; the Companys exposure to product liability claims from customers and end users, and the costs associated therewith; the Companys ability to meet its covenants in the agreements governing its debt; factors affecting the Companys 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 Companys 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)

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 Companys operating results. The Companys 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.

(2)

"Cash and Availability" refers to cash and cash equivalents and amounts of cash accessible but undrawn from credit facilities.

(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)

December 31, 2020

December 31, 2019

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

44,970

$

11,770

Restricted cash

5,720

Receivables, net

87,420

71,680

Inventories

115,320

136,650

Prepaid expenses and other current assets

11,510

8,570

Total current assets

264,940

228,670

Property and equipment, net

74,090

75,830

Operating lease right-of-use assets

47,310

45,770

Goodwill

3,360

4,350

Other intangibles, net

58,230

60,120

Deferred income taxes

1,280

430

Other assets

7,280

5,870

Total assets

$

456,490

$

421,040

Liabilities and Shareholders' Equity

Current liabilities:

Short-term borrowings and current maturities, long-term debt

$

14,120

$

4,310

Accounts payable

99,520

78,450

Read the original post:

Horizon Global Reports Financial Results for the Fourth Quarter and Full Year 2020 - Yahoo Finance