Horizon Global Announces Mixed Financial Results for First Quarter

May 10, 2019 | Member News

Horizon Global Corporation, manufacturers of branded towing and trailering equipment, recently reported a net sales decrease 3.3 percent to $209.7 million during the first quarter of 2019. Its operating loss of $8 million or 3.8 percent of sales is an improvement of $45.3 million. The adjusted operation loss of $1.8 million or .9 percent of sales is an improvement of $1.1 million.

 

“Over the past year, our team has put in a substantial effort to advance our business improvement initiatives, and we are pleased to see gains in our operating results,” commented Carl Bizon, president and Chief Executive Officer of Horizon Global. “Although revenue was modestly lower compared to the prior year quarter, driven by a late spring in the U.S. and pull-forward programs in the Americas that did not repeat, we were able to generate higher operating margins across all of our business segments. While we experienced a somewhat slower start to the year than we hoped, we remain confident that our business will deliver better results in 2019. We started the year with an energized management team and now have a revitalized Board, both fully engaged and committed to achieving our operational goals. We have largely completed the operational improvement initiatives in the Americas segment and are fully prepared for the prime selling season with the right set of products to meet the demands of our customers. Our Kansas City distribution center is operating as planned, enhanced by the recent initiation of our automated stock retrieval system on a limited basis, and providing greater productivity and efficiency for customer orders.”

 

Horizon Americas reported net sales decreased by .7 percent to $95.5 million, citing an unusually wet and cold season leading to decreases in retail, aftermarket and industrial channels, which were $7 million lower than the prior year quarter on a combined basis. The decreases were partially offset by increases in eCommerce and OE net sales of $5.8 million and $.9 million. Promotion spot buys during the period sparked the improvement, following consumer buying trends impacted many industries.

 

These amounts included non-recurring expenses of $0.8 million and $3.9 million during the 2019 and 2018 periods, respectively. This decrease in non-recurring expenses reflects a significantly reduced level of restructuring activities as we completed the Action Plan put in place during 2018 to improve operational performance. Adjusted operating loss(2) for the first quarter of 2019 improved to $0.7 million, or 0.7 percent of net sales, as compared to $1.2 million, or 1.3 percent of net sales, during the prior year quarter.

 

Horizon Europe-Africa’s net sales decreased 5.6 percent to $82.2 million due to unfavorable currency translation. On a constant currency basis, net sales increased by 2.7 percent, primarily resulting from higher volume in the OE channel, which improved by $6.3 million in constant currency. This increase was partially offset by lower aftermarket revenues of $3.0 million in constant currency and a decrease of $1.0 million related to the divestiture of a non-automotive business during the quarter. The company’s operating loss was $3.2 million, which is a $41.9 million improvement from its $45.1 million operating loss during the first quarter of 2018.

 

Horizon Asia-Pacific net sales decreased 4.6 percent or $1.5 million to $32 million, due to unfavorable currency translation. On a constant currency basis, net sales increased by 2.7 percent mainly due to higher shipment volumes in the OE channel. Operating profit increased 22.6 percent to $5.4 million, or 16.8 percent of net sales, due to lower selling, general and administrative spending offset partially by unfavorable sales mix on gross margin.