UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 | ||||||||
FORM |
(Exact Name of Registrant as Specified in Charter) |
_____________________ (State or Other Jurisdiction | _____________ (Commission | ______________ (IRS Employer | ||||||
of Incorporation) | File Number) | Identification No.) | ||||||
_____________________ | ___________ (Zip Code) | |||||||
(Address of principal executive offices) |
Registrant’s telephone number, including area code: | ( _____________ |
Not Applicable | ||
________________________________________ (Former name or former address, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Exhibit No. | Description | |||||||||||||
99.1 | ||||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
HORIZON GLOBAL CORPORATION | ||||||||||||||||||||
Date: | November 9, 2022 | By: | /s/ Jian James Zhou | |||||||||||||||||
Name: | Jian James Zhou | |||||||||||||||||||
Title: | Chief Financial Officer |
Matthew Meyer, Chief Accounting Officer | |||||||||||
Horizon Global Corporation | |||||||||||
(734) 656-3000 | |||||||||||
mmeyer@horizonglobal.com |
(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 U.S. 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. Adjusted EBITDA, as determined and measured by Horizon Global, should also not be compared to similarly titled measures reported by other companies. | ||||
(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". | ||||
(4) | “Gross Profit Margin” refers to “gross profit” as a percentage of “net sales”. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net sales | $ | 148,970 | $ | 196,540 | $ | 511,050 | $ | 617,850 | ||||||||||||||||||
Cost of sales | (132,320) | (157,780) | (453,470) | (491,240) | ||||||||||||||||||||||
Gross profit | 16,650 | 38,760 | 57,580 | 126,610 | ||||||||||||||||||||||
Selling, general and administrative expenses | (25,270) | (32,430) | (90,070) | (102,170) | ||||||||||||||||||||||
Operating (loss) profit | (8,620) | 6,330 | (32,490) | 24,440 | ||||||||||||||||||||||
Interest expense | (10,230) | (6,970) | (26,210) | (21,000) | ||||||||||||||||||||||
Loss on debt extinguishment of Replacement Term Loan | — | — | — | (11,650) | ||||||||||||||||||||||
Other expense, net | (5,760) | (1,720) | (14,610) | (5,940) | ||||||||||||||||||||||
Loss before income tax | (24,610) | (2,360) | (73,310) | (14,150) | ||||||||||||||||||||||
Income tax expense | (1,070) | (410) | (1,750) | (2,810) | ||||||||||||||||||||||
Net loss | (25,680) | (2,770) | (75,060) | (16,960) | ||||||||||||||||||||||
Less: Net loss attributable to noncontrolling interest | (220) | (300) | (720) | (970) | ||||||||||||||||||||||
Net loss attributable to Horizon Global | $ | (25,460) | $ | (2,470) | $ | (74,340) | $ | (15,990) | ||||||||||||||||||
Net loss per share: | ||||||||||||||||||||||||||
Basic | $ | (0.92) | $ | (0.09) | $ | (2.70) | $ | (0.59) | ||||||||||||||||||
Diluted | $ | (0.92) | $ | (0.09) | $ | (2.70) | $ | (0.59) | ||||||||||||||||||
September 30, 2022 | December 31, 2021 | |||||||||||||
(unaudited) | ||||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 7,760 | $ | 11,780 | ||||||||||
Restricted cash | 5,380 | 5,490 | ||||||||||||
Receivables, net | 75,600 | 80,720 | ||||||||||||
Inventories | 155,600 | 162,830 | ||||||||||||
Prepaid expenses and other current assets | 17,080 | 12,340 | ||||||||||||
Total current assets | 261,420 | 273,160 | ||||||||||||
Property and equipment, net | 66,200 | 71,610 | ||||||||||||
Operating lease right-of-use assets | 34,360 | 37,810 | ||||||||||||
Other intangibles, net | 41,410 | 48,910 | ||||||||||||
Deferred income taxes | 1,520 | 1,750 | ||||||||||||
Other assets | 5,140 | 5,680 | ||||||||||||
Total assets | $ | 410,050 | $ | 438,920 | ||||||||||
Liabilities and Shareholders' Deficit | ||||||||||||||
Current liabilities: | ||||||||||||||
Short-term borrowings and current maturities, long-term debt | $ | 74,450 | $ | 3,780 | ||||||||||
Accounts payable | 106,730 | 102,190 | ||||||||||||
Short-term operating lease liabilities | 10,600 | 11,010 | ||||||||||||
Accrued liabilities | 41,660 | 44,870 | ||||||||||||
Total current liabilities | 233,440 | 161,850 | ||||||||||||
Gross long-term debt | 235,110 | 297,070 | ||||||||||||
Unamortized debt issuance costs and discount | (26,020) | (26,520) | ||||||||||||
Long-term debt | 209,090 | 270,550 | ||||||||||||
Redeemable preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: 41,000 and 0 shares at September 30, 2022 and December 31, 2021, respectively | 42,320 | — | ||||||||||||
Deferred income taxes | 1,800 | 1,920 | ||||||||||||
Long-term operating lease liabilities | 30,680 | 35,930 | ||||||||||||
Other long-term liabilities | 8,390 | 8,920 | ||||||||||||
Total liabilities | 525,720 | 479,170 | ||||||||||||
Total Horizon Global shareholders' deficit | (108,400) | (33,690) | ||||||||||||
Noncontrolling interest | (7,270) | (6,560) | ||||||||||||
Total shareholders' deficit | (115,670) | (40,250) | ||||||||||||
Total liabilities and shareholders' deficit | $ | 410,050 | $ | 438,920 |
Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||
Net loss | $ | (75,060) | $ | (16,960) | ||||||||||
Adjustments to reconcile net loss to net cash used for operating activities: | ||||||||||||||
Depreciation | 9,980 | 11,710 | ||||||||||||
Amortization of intangible assets | 3,260 | 4,220 | ||||||||||||
Amortization of original issuance discount and debt issuance costs | 7,560 | 8,010 | ||||||||||||
Deferred income taxes | 290 | 730 | ||||||||||||
Non-cash compensation (income) expense | (420) | 2,590 | ||||||||||||
Paid-in-kind dividends and interest | 1,170 | 650 | ||||||||||||
Redeemable preferred stock redemption costs | 160 | — | ||||||||||||
Loss on debt extinguishment of Replacement Term Loan | — | 11,650 | ||||||||||||
Increase in receivables | (4,120) | (12,360) | ||||||||||||
Increase in inventories | (160) | (52,700) | ||||||||||||
Increase in prepaid expenses and other assets | (5,890) | (1,910) | ||||||||||||
Increase in accounts payable and accrued liabilities | 18,070 | 11,820 | ||||||||||||
Other, net | 8,140 | 1,910 | ||||||||||||
Net cash used for operating activities | (37,020) | (30,640) | ||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||
Capital expenditures | (12,020) | (14,730) | ||||||||||||
Other, net | 30 | 20 | ||||||||||||
Net cash used for investing activities | (11,990) | (14,710) | ||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||
Proceeds from Revolving Credit Facility, net of issuance costs | 24,510 | 28,680 | ||||||||||||
Repayments of borrowings on Revolving Credit Facility | (12,160) | (8,000) | ||||||||||||
Proceeds from Senior Term Loan, net of issuance costs | 118,200 | 75,300 | ||||||||||||
Repayments of borrowings on Replacement Term Loan, including transaction fees | — | (94,940) | ||||||||||||
Repayments of borrowings on Convertible Notes | (85,000) | — | ||||||||||||
Proceeds from borrowings on credit facilities | 2,230 | 2,870 | ||||||||||||
Repayments of borrowings on credit facilities | (3,460) | (1,960) | ||||||||||||
Proceeds from issuance of common stock warrants | 3,040 | 16,300 | ||||||||||||
Proceeds from exercise of common stock warrants | — | 420 | ||||||||||||
Other, net | (930) | (650) | ||||||||||||
Net cash provided by financing activities | 46,430 | 18,020 | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,550) | (510) | ||||||||||||
Cash, Cash Equivalents and Restricted Cash: | ||||||||||||||
Decrease for the period | (4,130) | (27,840) | ||||||||||||
At beginning of period | 17,270 | 50,690 | ||||||||||||
At end of period | $ | 13,140 | $ | 22,850 | ||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid for interest | $ | 17,110 | $ | 16,130 | ||||||||||
Cash paid for taxes, net of refunds | $ | 1,190 | $ | 2,010 |
Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | 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 | $ | (25,460) | $ | (2,470) | $ | (22,990) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | (220) | (300) | 80 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (25,680) | $ | (2,770) | $ | (22,910) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 10,230 | 6,970 | 3,260 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | 1,070 | 410 | 660 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 4,300 | 5,210 | (910) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
EBITDA | $ | (2,610) | $ | (4,490) | $ | (2,980) | $ | (10,080) | $ | 14,050 | $ | 2,030 | $ | (6,260) | $ | 9,820 | $ | (19,900) | ||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | 220 | — | 220 | — | 300 | — | 300 | (80) | |||||||||||||||||||||||||||||||||||||||||||||||
Severance | 200 | 40 | 10 | 250 | 50 | — | — | 50 | 200 | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring, relocation and related business disruption costs | 90 | 20 | 220 | 330 | 60 | 30 | 10 | 100 | 230 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock compensation | — | — | (2,470) | (2,470) | — | — | 880 | 880 | (3,350) | |||||||||||||||||||||||||||||||||||||||||||||||
Loss (gain) on business divestitures and other assets | 580 | 20 | (30) | 570 | 300 | 10 | 10 | 320 | 250 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt issuance costs | — | — | — | — | — | 70 | 100 | 170 | (170) | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized foreign currency remeasurement costs | 370 | 3,950 | 920 | 5,240 | (10) | 950 | 400 | 1,340 | 3,900 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (1,370) | $ | (240) | $ | (4,330) | $ | (5,940) | $ | 14,450 | $ | 3,390 | $ | (4,860) | $ | 12,980 | $ | (18,920) |
Three Months Ended September 30, | Change | |||||||||||||||||||||||||
2022 | 2021 | $ | % | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Net Sales | ||||||||||||||||||||||||||
Horizon Americas | $ | 79,220 | $ | 115,850 | $ | (36,630) | (31.6 | %) | ||||||||||||||||||
Horizon Europe-Africa | 69,750 | 80,690 | (10,940) | (13.6 | %) | |||||||||||||||||||||
Total | $ | 148,970 | $ | 196,540 | $ | (47,570) | (24.2 | %) | ||||||||||||||||||
Gross Profit | ||||||||||||||||||||||||||
Horizon Americas | $ | 11,780 | $ | 29,310 | $ | (17,530) | (59.8 | %) | ||||||||||||||||||
Horizon Europe-Africa | 4,870 | 9,450 | (4,580) | (48.5 | %) | |||||||||||||||||||||
Total | $ | 16,650 | $ | 38,760 | $ | (22,110) | (57.0 | %) | ||||||||||||||||||
Operating (Loss) Profit | ||||||||||||||||||||||||||
Horizon Americas | $ | (3,500) | $ | 12,400 | $ | (15,900) | (128.2 | %) | ||||||||||||||||||
Horizon Europe-Africa | (2,940) | (150) | (2,790) | (1,860.0 | %) | |||||||||||||||||||||
Corporate | (2,180) | (5,920) | 3,740 | 63.2 | % | |||||||||||||||||||||
Total | $ | (8,620) | $ | 6,330 | $ | (14,950) | (236.2 | %) | ||||||||||||||||||
Adjusted EBITDA | ||||||||||||||||||||||||||
Horizon Americas | $ | (1,370) | $ | 14,450 | $ | (15,820) | (109.5 | %) | ||||||||||||||||||
Horizon Europe-Africa | (240) | 3,390 | (3,630) | (107.1 | %) | |||||||||||||||||||||
Corporate | (4,330) | (4,860) | 530 | 10.9 | % | |||||||||||||||||||||
Total | $ | (5,940) | $ | 12,980 | $ | (18,920) | (145.8 | %) |
Three Months Ended September 30, 2022 | ||||||||||||||||||||
Horizon Americas | Horizon Europe-Africa | Consolidated | ||||||||||||||||||
Revenue growth as reported | (31.6) | % | (13.6) | % | (24.2) | % | ||||||||||||||
Less: currency impact | — | % | (14.2) | % | (5.8) | % | ||||||||||||||
Revenue growth at constant currency | (31.6) | % | 0.6 | % | (18.4) | % |
Cover Page |
Nov. 09, 2022 |
---|---|
Cover [Abstract] | |
Document Period End Date | Nov. 09, 2022 |
Document Type | 8-K |
Entity Registrant Name | Horizon Global Corp |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-37427 |
Entity Tax Identification Number | 47-3574483 |
Entity Address, Address Line One | 47912 Halyard Drive |
Entity Address, Address Line Two | Suite 100 |
Entity Address, City or Town | Plymouth |
Entity Address, State or Province | MI |
Entity Address, Postal Zip Code | 48170 |
City Area Code | 734 |
Local Phone Number | 656-3000 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $0.01 par value |
Trading Symbol | HZN |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001637655 |
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