Horizon Global (HZN) Misses Q1 EPS by 17c, Revenues Beat

Horizon Global (NYSE: HZN) reported Q1 EPS of ($0.67), $0.17 worse than the analyst estimate of ($0.50). Revenue for the quarter came in at $209.66 million versus the consensus estimate of $199.74 million.

Business improvement initiatives drive better consolidated operating results
Horizon Americas fully stocked for peak U.S. selling season despite slower start to year due to late spring
Net sales of $209.7 million, down 3.3 percent

Net sales increased 1.3 percent in constant currency(1)

Operating loss of $8.0 million, or 3.8 percent of sales; an improvement of $45.3 million

Adjusted operating loss(2) of $1.8 million, or 0.9 percent of sales; an improvement of $1.1 million

TROY, Mich.--(BUSINESS WIRE)-- Horizon Global Corporation (NYSE: HZN), one of the world’s leading manufacturers of branded towing and trailering equipment, today reported financial results for the first quarter of 2019. The Company also provided an update on operating improvement initiatives underway in its Europe-Africa segment.

"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 revenuewas 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.”

“In Europe-Africa, we continued to make sure and steady progress toward our ongoing business improvement initiatives. The team is making strides to improve its sourcing activities, enabling us to focus on driving margin improvement in various product offerings. We will continue to move forward other initiatives to further advance operating efficiency, increase profitability and enhance the value we provide our customers, but these efforts will take time to accomplish. From a market perspective, we faced some headwinds in the U.K. as vehicle sales slowed due to uncertainty surrounding Brexit, while the German market remained more stable. Ultimately, our success will depend on our team’s ability to provide the right products to both our OE and aftermarket customers in the region.”

Bizon continued, “Our Asia-Pacific segment continued to perform well in the first quarter and continued driving improved operating efficiency while achieving cost reductions. In addition to our operating efforts across our business segments, we remain committed to reducing corporate costs, including the consolidation of our corporate offices into the Americas offices in Plymouth, Michigan. This consolidation will intensify the focus of our team on our business improvement efforts and will, ultimately, reduce costs and increase organizational efficiency. With the ongoing solid performance in Asia-Pacific, steady improvement in the Americas, the turnaround efforts in Europe-Africa, and continued focus on meeting the demands of our customers, we are confident in our ability to deliver value to our shareholders over the long term.”

2019 Full-Year Outlook

“We remain optimistic in our outlook for the remainder of the year. Although we are not providing formal guidance for 2019, we are prepared for the upcoming selling season, and, despite a slower start to the year than expected, anticipate growth in revenues and profitability for the full year. We are pleased to have our additional financing in place and remain focused on maintaining liquidity to fund our operations during the year,” Bizon concluded. “In connection with the achievement of our recent term loan amendment and second lien term loan, we committed to reduce our first lien term loan by $100 million, and, as such, have engaged Jefferies to fully explore alternatives to fulfill this obligation. We continue to move the business forward with both our senior leadership team and Board fully engaged in our operational improvement efforts. We remain one team with one goal, focused on providing the best products and service to our customers. We are confident in our ability to execute the necessary operational improvements and drive enhanced value for our shareholders.”

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

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