Horizon Global (HZN) Misses Q3 EPS by 20c, Revenues Miss

Horizon Global (NYSE: HZN) reported Q3 EPS of ($0.01), $0.20 worse than the analyst estimate of $0.19. Revenue for the quarter came in at $227.8 million versus the consensus estimate of $237.71 million.

“Having recently been named to the permanent role of President and CEO, I am just as encouraged about our Company as I was when I took over the interim role in May of this year,” said Carl Bizon, President and Chief Executive Officer of Horizon Global. “Our primary 2018 selling season in the Americas did not deliver the desired revenue and earnings result due mainly to ramp-up challenges in our Kansas City distribution facility. That being said, Kansas City proved during the third quarter that we now have the capabilities, processes and resources to support future growth in next year’s season. At quarter end, we had past due orders of approximately $8.5 million, down from a peak of approximately $26 million early in the quarter. With the Americas Action Plan items now complete, we have a greatly reduced cost structure to leverage in the region. We have also announced price increases to address rising input costs and tariffs. We will start to see the full impact of these actions in our financial results as volume ramps up with our normal seasonality in the second quarter of 2019.”

Bizon continued, “Operational challenges continued during the third quarter in our Europe-Africa segment and results came in below expectations. The new leadership team has made additional organizational and structural changes, and we identified further initiatives expected to improve the long-term performance of the business. With the revised view of full-year performance, we recorded a non-cash goodwill impairment for the segment of approximately $26.6 million in the quarter. I have great confidence in our leadership and am working closely with this team to ensure we are initiating near-term operational improvements that will lead to longer-term transformation of this region.

“As we look across our global business, Asia-Pacific continues to perform well, the Americas is poised to capitalize on efforts made this year, and we are fully engaged in improving performance in Europe-Africa. As a company, Horizon Global is focused on performance improvement and accountability at every level, which led to a number of significant management changes and operational shifts over the past year. Ultimately, I remain convinced of the underlying strengths of Horizon Global -- our leading brands, performance products, dedicated team members, loyal customers and diverse channels and geographies -- which will help see us through these near-term challenges and set our company back to a path of growth and returning value to our shareholders.”

For earnings history and earnings-related data on Horizon Global (HZN) click here.

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