TROY, Mich.--(BUSINESS WIRE)--Aug 7, 2018--Horizon Global Corporation (NYSE: HZN), one of the world’s leading manufacturers of branded towing and trailering equipment, today reported second quarter results. The Company also provided an update on its Action Plan, including the completion of the restructuring of its Americas segment, operational improvements at its Kansas City Aftermarket and Retail distribution facility, and business improvement activities in its Europe-Africa segment.

“We remain encouraged that our global team continues to make solid progress on the Action Plan even though consolidated results for the second quarter are not in line with the prior year,” said Carl Bizon, Interim President and Chief Executive Officer of Horizon Global. “Of key importance is the ramp up of our Kansas City distribution center and, as of the end of last week, I am pleased to report that we are currently exceeding our average daily shipment goal, and this facility is now demonstrating its ability to meet the requirements of our business. We closed the quarter with past due orders of approximately $23 million, which significantly impacted our second quarter performance. As we continue to reduce past due orders, we are fortunate that our customers have largely remained resilient and stayed with us during the Kansas City ramp-up process.

“The second quarter and beginning of the current quarter have been marked by a number of key events -- we made key senior management changes, including the naming of new leadership for our Company and its two largest operating segments; we terminated the Brink acquisition; and, just last week, we announced a successful amendment of our term loan agreement, which included securing an incremental $50 million to address short-term liquidity needs. As a Company, we are clearly not standing still and are moving quickly to fix near-term operational issues. We believe we are nearing completion in the Americas, and new leadership in Europe-Africa will be building upon the foundation of that business, while closely assessing the organization and its business processes for operating and financial improvement.

“As we look across our global business, Asia-Pacific is performing well, the Americas is working through a transitional year and we are closely assessing and prioritizing business improvement initiatives in Europe-Africa. I remain confident that the underlying strengths of our Company - great brands, great products, excellent quality, strong customer relationships, experienced and committed team members and solid end markets - will lead us past these near-term challenges and position our Company for long-term success.”

2018 Second Quarter Segment Results

Horizon Americas. Net sales decreased 21.7 percent, primarily driven by capacity constraints during the ramp up of the Kansas City distribution center. The segment exited the quarter with past due orders of approximately $23 million. Operating profit decreased $20.2 million to a loss of $2.6 million, or 2.4 percent of net sales, due to lower sales volumes, unfavorable input costs and severance and restructuring costs associated with facility closures and delayering the organization. Adjusted operating profit (1) decreased $12.1 million to $10.6 million, or 9.8 percent of net sales.

Horizon Europe-Africa. Net sales increased 4.9 percent, but declined 2.2 percent in constant currency (3), as revenue growth in the OE channel was more than offset by a decline in the aftermarket channel due to limited product availability resulting from the production shift to Braşov. Operating profit decreased $59.3 million to a loss of $55.7 million, or 61.3 percent of net sales, attributable to the impairment of goodwill. Adjusted operating profit (1) decreased $2.1 million to $2.6 million, or 2.9 percent of net sales, due primarily to the margin mix impact from the lower-margin OE business and material cost increases in excess of realized price increases.

Horizon Asia-Pacific. Net sales increased 19.1 percent, or 17.5 percent, in constant currency (3), primarily attributable to the Best Bars acquisition completed in the third quarter of 2017. Operating profit increased 8.9 percent to $4.7 million, or 13.6 percent of net sales, driven by higher sales volumes.

Action Plan

Horizon Global announced a business improvement plan on March 1, 2018, with targeted initiatives to drive operating results in its Americas and Europe-Africa segments. The Action Plan is expected to deliver $3.0 million to $5.0 million in consolidated cost savings in 2018, and once implemented, $10.0 million to $12.0 million in consolidated cost savings on a full-year run rate basis. Action Plan updates include:

Reduced past due orders from a peak of approximately $26 million in mid-July to approximately $17 million as of August 5 Completed closure of Mosinee, Wisconsin and Solon, Ohio facilities Completed 30 percent reduction in Americas’ U.S.-based salaried workforce Reynosa targeted production levels achieved Europe-Africa’s low-cost-country production increased to 28 percent year to date

Bizon concluded, “Our global team remains focused on achieving our Action Plan. We are pleased to have completed several initiatives specific to the Americas; however, we know there is a good deal of work yet to be done in Europe. The team remains committed to our success, and we are working hard to meet, and ultimately exceed, the expectations of our customers, the end users of our products and our shareholders.”

Conference Call Details

Horizon Global will host a conference call regarding second quarter 2018 earnings on Tuesday, August 7, 2018, 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 9559399.

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 9559399. The telephone replay will be available approximately two hours after the end of the call and continue through August 21, 2018.

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 our employees and create value 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 4,300 employees in 58 facilities across 21 countries.

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Safe Harbor Statement

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 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 spin-off from TriMas Corporation; the success of our Action Plan, including the actual amount of savings and timing thereof; 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.

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