(Mark One)
|
|
|
x
|
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
|
For the Quarterly Period Ended September 30, 2019
|
||
or
|
||
o
|
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the Transition Period from to .
|
|
|
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
47-3574483
(IRS Employer
Identification No.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
|
HZN
|
|
New York Stock Exchange
|
Large accelerated filer o
|
|
Accelerated filer x
|
|
Non-accelerated filer o
|
|
Smaller reporting company o
|
|
Emerging growth company x
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
16,360
|
|
|
$
|
27,650
|
|
Receivables, net of allowance for doubtful accounts of approximately $5.0 million and $4.8 million at September 30, 2019 and December 31, 2018, respectively
|
|
93,480
|
|
|
95,170
|
|
||
Inventories
|
|
141,150
|
|
|
152,200
|
|
||
Prepaid expenses and other current assets
|
|
9,480
|
|
|
8,270
|
|
||
Current assets held-for-sale
|
|
—
|
|
|
36,080
|
|
||
Total current assets
|
|
260,470
|
|
|
319,370
|
|
||
Property and equipment, net
|
|
78,670
|
|
|
86,500
|
|
||
Operating lease right-of-use assets
|
|
56,170
|
|
|
—
|
|
||
Goodwill
|
|
4,200
|
|
|
4,500
|
|
||
Other intangibles, net
|
|
60,350
|
|
|
69,400
|
|
||
Deferred income taxes
|
|
440
|
|
|
660
|
|
||
Non-current assets held-for-sale
|
|
—
|
|
|
34,790
|
|
||
Other assets
|
|
5,700
|
|
|
6,130
|
|
||
Total assets
|
|
$
|
466,000
|
|
|
$
|
521,350
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term borrowings and current maturities, long-term debt
|
|
$
|
24,270
|
|
|
$
|
13,860
|
|
Accounts payable
|
|
79,440
|
|
|
102,350
|
|
||
Short-term operating lease liabilities
|
|
9,850
|
|
|
—
|
|
||
Current liabilities held-for-sale
|
|
—
|
|
|
28,080
|
|
||
Accrued liabilities
|
|
53,020
|
|
|
58,520
|
|
||
Total current liabilities
|
|
166,580
|
|
|
202,810
|
|
||
Gross long-term debt
|
|
214,930
|
|
|
382,220
|
|
||
Unamortized debt issuance costs and discount
|
|
(34,200
|
)
|
|
(31,570
|
)
|
||
Long-term debt
|
|
180,730
|
|
|
350,650
|
|
||
Deferred income taxes
|
|
8,280
|
|
|
12,620
|
|
||
Long-term operating lease liabilities
|
|
50,890
|
|
|
—
|
|
||
Non-current liabilities held-for-sale
|
|
—
|
|
|
1,740
|
|
||
Other long-term liabilities
|
|
20,770
|
|
|
19,750
|
|
||
Total liabilities
|
|
427,250
|
|
|
587,570
|
|
||
Contingencies (See Note 13)
|
|
|
|
|
|
|
||
Shareholders' equity (deficit):
|
|
|
|
|
||||
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par: Authorized 400,000,000 shares; 26,073,894 shares issued and 25,387,388 outstanding at September 30, 2019, and 25,866,747 shares issued and 25,180,241 outstanding at December 31, 2018
|
|
250
|
|
|
250
|
|
||
Common stock warrants exercisable for 6,487,674 shares issued and outstanding at September 30, 2019; none issued and outstanding at December 31, 2018
|
|
10,720
|
|
|
—
|
|
||
Paid-in capital
|
|
162,760
|
|
|
160,990
|
|
||
Treasury stock, at cost: 686,506 shares at September 30, 2019 and December 31, 2018
|
|
(10,000
|
)
|
|
(10,000
|
)
|
||
Accumulated deficit
|
|
(110,390
|
)
|
|
(222,720
|
)
|
||
Accumulated other comprehensive (loss) income
|
|
(11,250
|
)
|
|
7,760
|
|
||
Total Horizon Global shareholders' equity (deficit)
|
|
42,090
|
|
|
(63,720
|
)
|
||
Noncontrolling interest
|
|
(3,340
|
)
|
|
(2,500
|
)
|
||
Total shareholders' equity (deficit)
|
|
38,750
|
|
|
(66,220
|
)
|
||
Total liabilities and shareholders' equity
|
|
$
|
466,000
|
|
|
$
|
521,350
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
|
$
|
177,850
|
|
|
$
|
194,030
|
|
|
$
|
548,170
|
|
|
$
|
576,250
|
|
Cost of sales
|
|
(149,560
|
)
|
|
(159,500
|
)
|
|
(460,010
|
)
|
|
(472,120
|
)
|
||||
Gross profit
|
|
28,290
|
|
|
34,530
|
|
|
88,160
|
|
|
104,130
|
|
||||
Selling, general and administrative expenses
|
|
(41,100
|
)
|
|
(37,680
|
)
|
|
(113,140
|
)
|
|
(134,210
|
)
|
||||
Impairment of goodwill and intangible assets
|
|
—
|
|
|
(26,640
|
)
|
|
—
|
|
|
(125,770
|
)
|
||||
Net gain (loss) on dispositions of property and equipment
|
|
50
|
|
|
(110
|
)
|
|
1,500
|
|
|
(520
|
)
|
||||
Operating loss
|
|
(12,760
|
)
|
|
(29,900
|
)
|
|
(23,480
|
)
|
|
(156,370
|
)
|
||||
Other expense, net
|
|
(1,640
|
)
|
|
(1,040
|
)
|
|
(6,610
|
)
|
|
(7,410
|
)
|
||||
Interest expense
|
|
(24,120
|
)
|
|
(7,590
|
)
|
|
(50,270
|
)
|
|
(19,580
|
)
|
||||
Loss from continuing operations before income tax
|
|
(38,520
|
)
|
|
(38,530
|
)
|
|
(80,360
|
)
|
|
(183,360
|
)
|
||||
Income tax benefit
|
|
1,020
|
|
|
1,420
|
|
|
2,330
|
|
|
15,770
|
|
||||
Net loss from continuing operations
|
|
(37,500
|
)
|
|
(37,110
|
)
|
|
(78,030
|
)
|
|
(167,590
|
)
|
||||
Income from discontinued operations, net of tax
|
|
182,750
|
|
|
4,110
|
|
|
189,520
|
|
|
9,670
|
|
||||
Net income (loss)
|
|
145,250
|
|
|
(33,000
|
)
|
|
111,490
|
|
|
(157,920
|
)
|
||||
Less: Net loss attributable to noncontrolling interest
|
|
(260
|
)
|
|
(240
|
)
|
|
(840
|
)
|
|
(720
|
)
|
||||
Net income (loss) attributable to Horizon Global
|
|
$
|
145,510
|
|
|
$
|
(32,760
|
)
|
|
$
|
112,330
|
|
|
$
|
(157,200
|
)
|
Net income (loss) per share attributable to Horizon Global:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(1.47
|
)
|
|
$
|
(1.47
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(6.67
|
)
|
Discontinued operations
|
|
7.21
|
|
|
0.16
|
|
|
7.50
|
|
|
0.39
|
|
||||
Total
|
|
5.74
|
|
|
(1.31
|
)
|
|
4.45
|
|
|
(6.28
|
)
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
(1.47
|
)
|
|
(1.47
|
)
|
|
(3.05
|
)
|
|
(6.67
|
)
|
||||
Discontinued operations
|
|
7.21
|
|
|
0.16
|
|
|
7.50
|
|
|
0.39
|
|
||||
Total
|
|
5.74
|
|
|
(1.31
|
)
|
|
4.45
|
|
|
(6.28
|
)
|
||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
25,329,492
|
|
|
25,101,847
|
|
|
25,267,310
|
|
|
25,028,072
|
|
||||
Diluted
|
|
25,329,492
|
|
|
25,101,847
|
|
|
25,267,310
|
|
|
25,028,072
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
|
$
|
145,250
|
|
|
$
|
(33,000
|
)
|
|
$
|
111,490
|
|
|
$
|
(157,920
|
)
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation and other
|
|
(1,320
|
)
|
|
(680
|
)
|
|
(30
|
)
|
|
(4,400
|
)
|
||||
Derivative instruments
|
|
(440
|
)
|
|
640
|
|
|
(1,720
|
)
|
|
2,960
|
|
||||
Total other comprehensive loss, net of tax
|
|
(1,760
|
)
|
|
(40
|
)
|
|
(1,750
|
)
|
|
(1,440
|
)
|
||||
Total comprehensive income (loss)
|
|
143,490
|
|
|
(33,040
|
)
|
|
109,740
|
|
|
(159,360
|
)
|
||||
Less: Comprehensive loss attributable to noncontrolling interest
|
|
(250
|
)
|
|
(240
|
)
|
|
(830
|
)
|
|
(790
|
)
|
||||
Comprehensive income (loss) attributable to Horizon Global
|
|
$
|
143,740
|
|
|
$
|
(32,800
|
)
|
|
$
|
110,570
|
|
|
$
|
(158,570
|
)
|
|
|
Nine months ended
September 30, |
||||||
|
|
2019
|
|
2018
|
||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
111,490
|
|
|
$
|
(157,920
|
)
|
Less: Net income from discontinued operations
|
|
189,520
|
|
|
9,670
|
|
||
Net loss from continuing operations
|
|
(78,030
|
)
|
|
(167,590
|
)
|
||
|
|
|
|
|
||||
Adjustments to reconcile net loss from continued operations to net cash used for operating activities:
|
|
|
|
|
||||
Net (gain) loss on dispositions of property and equipment
|
|
(1,500
|
)
|
|
520
|
|
||
Depreciation
|
|
11,980
|
|
|
9,410
|
|
||
Amortization of intangible assets
|
|
4,800
|
|
|
5,640
|
|
||
Write off of operating lease assets
|
|
4,250
|
|
|
—
|
|
||
Impairment of goodwill and intangible assets
|
|
—
|
|
|
125,770
|
|
||
Amortization of original issuance discount and debt issuance costs
|
|
18,570
|
|
|
6,050
|
|
||
Deferred income taxes
|
|
(3,390
|
)
|
|
(3,370
|
)
|
||
Non-cash compensation expense
|
|
1,790
|
|
|
1,430
|
|
||
Paid-in-kind interest
|
|
7,620
|
|
|
—
|
|
||
Increase in receivables
|
|
(4,680
|
)
|
|
(31,950
|
)
|
||
Decrease in inventories
|
|
1,920
|
|
|
5,630
|
|
||
(Increase) decrease in prepaid expenses and other assets
|
|
(2,770
|
)
|
|
1,150
|
|
||
Decrease in accounts payable and accrued liabilities
|
|
(15,560
|
)
|
|
(27,450
|
)
|
||
Other, net
|
|
(10,800
|
)
|
|
220
|
|
||
Net cash used for operating activities for continuing operations
|
|
(65,800
|
)
|
|
(74,540
|
)
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(8,460
|
)
|
|
(9,660
|
)
|
||
Net proceeds from sale of business
|
|
214,570
|
|
|
—
|
|
||
Net proceeds from disposition of property and equipment
|
|
1,470
|
|
|
(280
|
)
|
||
Net cash provided by (used for) investing activities for continuing operations
|
|
207,580
|
|
|
(9,940
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Proceeds from borrowings on credit facilities
|
|
13,780
|
|
|
12,550
|
|
||
Repayments of borrowings on credit facilities
|
|
(6,520
|
)
|
|
(14,390
|
)
|
||
Proceeds from Second Lien Term Loan, net of issuance costs
|
|
35,520
|
|
|
45,430
|
|
||
Repayments of borrowings on First Lien Term Loan, inclusive of transaction costs
|
|
(173,430
|
)
|
|
(6,490
|
)
|
||
Proceeds from ABL Revolving Debt, net of issuance costs
|
|
68,790
|
|
|
72,430
|
|
||
Repayments of borrowings on ABL Revolving Debt
|
|
(112,510
|
)
|
|
(34,830
|
)
|
||
Proceeds from issuance of Series A Preferred Stock
|
|
5,340
|
|
|
—
|
|
||
Proceeds from issuance of Warrants
|
|
5,380
|
|
|
—
|
|
||
Other, net
|
|
(10
|
)
|
|
(300
|
)
|
||
Net cash (used for) provided by financing activities for continuing operations
|
|
(163,660
|
)
|
|
74,400
|
|
||
Discontinued Operations:
|
|
|
|
|
||||
Net cash provided by discontinued operating activities
|
|
11,430
|
|
|
8,500
|
|
||
Net cash used for discontinued investing activities
|
|
(1,120
|
)
|
|
(720
|
)
|
||
Net cash provided by (used for) discontinued financing activities
|
|
—
|
|
|
—
|
|
||
Net cash provided by discontinued operations
|
|
10,310
|
|
|
7,780
|
|
||
Effect of exchange rate changes on cash
|
|
280
|
|
|
40
|
|
||
Cash and Cash Equivalents:
|
|
|
|
|
||||
Decrease for the period
|
|
(11,290
|
)
|
|
(2,260
|
)
|
||
At beginning of period
|
|
27,650
|
|
|
29,570
|
|
||
At end of period
|
|
$
|
16,360
|
|
|
$
|
27,310
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
19,730
|
|
|
$
|
13,430
|
|
Cash paid for taxes
|
|
$
|
480
|
|
|
$
|
2,170
|
|
|
|
Common
Stock |
|
Common Stock Warrants
|
|
Paid-in
Capital |
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total Horizon Global Shareholders’ Deficit
|
|
Noncontrolling Interest
|
|
Total Shareholders’ Deficit
|
||||||||||||||||||
Balance at January 1, 2019
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
160,990
|
|
|
$
|
(10,000
|
)
|
|
$
|
(222,720
|
)
|
|
$
|
7,760
|
|
|
$
|
(63,720
|
)
|
|
$
|
(2,500
|
)
|
|
$
|
(66,220
|
)
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,100
|
)
|
|
—
|
|
|
(25,100
|
)
|
|
(520
|
)
|
|
(25,620
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
140
|
|
|
—
|
|
|
140
|
|
|||||||||
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||||||
Non-cash compensation expense
|
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
|
350
|
|
|||||||||
Issuance of Warrants
|
|
—
|
|
|
5,380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,380
|
|
|
—
|
|
|
5,380
|
|
|||||||||
Balance at March 31, 2019
|
|
250
|
|
|
5,380
|
|
|
161,330
|
|
|
(10,000
|
)
|
|
(247,820
|
)
|
|
7,900
|
|
|
(82,960
|
)
|
|
(3,020
|
)
|
|
(85,980
|
)
|
|||||||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,080
|
)
|
|
—
|
|
|
(8,080
|
)
|
|
(60
|
)
|
|
(8,140
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|
(130
|
)
|
|
—
|
|
|
(130
|
)
|
|||||||||
Non-cash compensation expense
|
|
—
|
|
|
—
|
|
|
590
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
590
|
|
|
—
|
|
|
590
|
|
|||||||||
Issuance of Warrants
|
|
—
|
|
|
5,340
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,340
|
|
|
—
|
|
|
5,340
|
|
|||||||||
Balance as of June 30, 2019
|
|
250
|
|
|
10,720
|
|
|
161,920
|
|
|
(10,000
|
)
|
|
(255,900
|
)
|
|
7,770
|
|
|
(85,240
|
)
|
|
(3,080
|
)
|
|
(88,320
|
)
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145,510
|
|
|
—
|
|
|
145,510
|
|
|
(260
|
)
|
|
145,250
|
|
|||||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,760
|
)
|
|
(1,760
|
)
|
|
—
|
|
|
(1,760
|
)
|
|||||||||
Non-cash compensation expense
|
|
—
|
|
|
—
|
|
|
840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
840
|
|
|
—
|
|
|
840
|
|
|||||||||
Amounts reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,260
|
)
|
|
(17,260
|
)
|
|
—
|
|
|
(17,260
|
)
|
|||||||||
Balance at September 30, 2019
|
|
$
|
250
|
|
|
$
|
10,720
|
|
|
$
|
162,760
|
|
|
$
|
(10,000
|
)
|
|
$
|
(110,390
|
)
|
|
$
|
(11,250
|
)
|
|
$
|
42,090
|
|
|
$
|
(3,340
|
)
|
|
$
|
38,750
|
|
|
|
Common
Stock |
|
Common Stock Warrants
|
|
Paid-in
Capital |
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total Horizon Global Shareholders’ Equity
|
|
Noncontrolling Interest
|
|
Total Shareholders’ Equity
|
||||||||||||||||||
Balance at December 31, 2017, as reported
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
159,490
|
|
|
$
|
(10,000
|
)
|
|
$
|
(17,860
|
)
|
|
$
|
10,010
|
|
|
$
|
141,890
|
|
|
$
|
(1,490
|
)
|
|
$
|
140,400
|
|
Impact of ASU 2018-02
|
|
—
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
(900
|
)
|
|
560
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Balance at January 1, 2018, as restated
|
|
250
|
|
|
—
|
|
|
159,830
|
|
|
(10,000
|
)
|
|
(18,760
|
)
|
|
10,570
|
|
|
141,890
|
|
|
(1,490
|
)
|
|
140,400
|
|
|||||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,510
|
)
|
|
—
|
|
|
(57,510
|
)
|
|
(250
|
)
|
|
(57,760
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,680
|
|
|
4,680
|
|
|
10
|
|
|
4,690
|
|
|||||||||
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||||||||
Non-cash compensation expense
|
|
—
|
|
|
—
|
|
|
720
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
720
|
|
|
—
|
|
|
720
|
|
|||||||||
Balance at March 31, 2018
|
|
250
|
|
|
—
|
|
|
160,350
|
|
|
(10,000
|
)
|
|
(76,270
|
)
|
|
15,250
|
|
|
89,580
|
|
|
(1,730
|
)
|
|
87,850
|
|
|||||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,930
|
)
|
|
—
|
|
|
(66,930
|
)
|
|
(230
|
)
|
|
(67,160
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,010
|
)
|
|
(6,010
|
)
|
|
(80
|
)
|
|
(6,090
|
)
|
|||||||||
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||||||
Non-cash compensation expense
|
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
490
|
|
|||||||||
Balance at June 30, 2018
|
|
250
|
|
|
—
|
|
|
160,830
|
|
|
(10,000
|
)
|
|
(143,200
|
)
|
|
9,240
|
|
|
17,120
|
|
|
(2,040
|
)
|
|
15,080
|
|
|||||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,760
|
)
|
|
—
|
|
|
(32,760
|
)
|
|
(240
|
)
|
|
(33,000
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||||||||
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
(90
|
)
|
|||||||||
Non-cash compensation expense
|
|
—
|
|
|
—
|
|
|
220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
|||||||||
Balance at September 30, 2018
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
160,960
|
|
|
$
|
(10,000
|
)
|
|
$
|
(175,960
|
)
|
|
$
|
9,200
|
|
|
$
|
(15,550
|
)
|
|
$
|
(2,280
|
)
|
|
$
|
(17,830
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Net sales
|
|
$
|
29,750
|
|
|
$
|
33,810
|
|
|
$
|
92,300
|
|
|
$
|
101,760
|
|
Cost of sales
|
|
(22,250
|
)
|
|
(24,720
|
)
|
|
(68,530
|
)
|
|
(76,250
|
)
|
||||
Selling, general and administrative expenses
|
|
(3,050
|
)
|
|
(3,130
|
)
|
|
(9,580
|
)
|
|
(10,510
|
)
|
||||
Interest expense
|
|
(80
|
)
|
|
(60
|
)
|
|
(310
|
)
|
|
(210
|
)
|
||||
Other expense. net
|
|
(210
|
)
|
|
(470
|
)
|
|
(400
|
)
|
|
(1,800
|
)
|
||||
Income before income tax expense
|
|
4,160
|
|
|
5,430
|
|
|
13,480
|
|
|
12,990
|
|
||||
Income tax expense
|
|
(1,900
|
)
|
|
(1,320
|
)
|
|
(4,450
|
)
|
|
(3,320
|
)
|
||||
Gain on sale of discontinued operations
|
|
$
|
180,490
|
|
|
$
|
—
|
|
|
$
|
180,490
|
|
|
$
|
—
|
|
Income from discontinued operations, net of tax
|
|
$
|
182,750
|
|
|
$
|
4,110
|
|
|
$
|
189,520
|
|
|
$
|
9,670
|
|
|
|
December 31, 2018
|
||
|
|
(dollars in thousands)
|
||
Assets
|
|
|
||
Current assets:
|
|
|
||
Receivables, net of allowance for doubtful accounts
|
|
$
|
13,170
|
|
Inventories
|
|
21,490
|
|
|
Prepaid expenses and other current assets
|
|
1,420
|
|
|
Total current assets
|
|
36,080
|
|
|
Non-current assets:
|
|
|
||
Property and equipment, net
|
|
15,780
|
|
|
Goodwill
|
|
8,160
|
|
|
Other intangibles, net
|
|
8,650
|
|
|
Deferred income taxes
|
|
2,030
|
|
|
Other assets
|
|
170
|
|
|
Total non-current assets
|
|
34,790
|
|
|
Assets held-for-sale
|
|
$
|
70,870
|
|
Liabilities
|
|
|
||
Current liabilities:
|
|
|
||
Accounts payable
|
|
$
|
20,780
|
|
Accrued liabilities
|
|
7,300
|
|
|
Total current liabilities
|
|
28,080
|
|
|
Non-current liabilities:
|
|
|
||
Deferred income taxes
|
|
1,530
|
|
|
Other long-term liabilities
|
|
210
|
|
|
Total non-current liabilities
|
|
1,740
|
|
|
Total liabilities held-for-sale
|
|
$
|
29,820
|
|
|
|
Three Months Ended September 30, 2019
|
||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Net Sales
|
|
|
|
|
|
|
||||||
Automotive OEM
|
|
$
|
21,050
|
|
|
$
|
43,200
|
|
|
$
|
64,250
|
|
Automotive OES
|
|
1,960
|
|
|
16,510
|
|
|
18,470
|
|
|||
Aftermarket
|
|
26,920
|
|
|
19,840
|
|
|
46,760
|
|
|||
Retail
|
|
26,600
|
|
|
—
|
|
|
26,600
|
|
|||
Industrial
|
|
7,650
|
|
|
780
|
|
|
8,430
|
|
|||
E-commerce
|
|
12,040
|
|
|
560
|
|
|
12,600
|
|
|||
Other
|
|
—
|
|
|
740
|
|
|
740
|
|
|||
Total
|
|
$
|
96,220
|
|
|
$
|
81,630
|
|
|
$
|
177,850
|
|
|
|
Three Months Ended September 30, 2018
|
||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Net Sales
|
|
|
|
|
|
|
||||||
Automotive OEM
|
|
$
|
20,320
|
|
|
$
|
40,650
|
|
|
$
|
60,970
|
|
Automotive OES
|
|
1,700
|
|
|
12,600
|
|
|
14,300
|
|
|||
Aftermarket
|
|
38,470
|
|
|
19,980
|
|
|
58,450
|
|
|||
Retail
|
|
29,600
|
|
|
—
|
|
|
29,600
|
|
|||
Industrial
|
|
11,160
|
|
|
—
|
|
|
11,160
|
|
|||
E-commerce
|
|
13,750
|
|
|
1,290
|
|
|
15,040
|
|
|||
Other
|
|
510
|
|
|
4,000
|
|
|
4,510
|
|
|||
Total
|
|
$
|
115,510
|
|
|
$
|
78,520
|
|
|
$
|
194,030
|
|
|
|
Nine Months Ended September 30, 2019
|
||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Net Sales
|
|
|
|
|
|
|
||||||
Automotive OEM
|
|
$
|
64,970
|
|
|
$
|
137,900
|
|
|
$
|
202,870
|
|
Automotive OES
|
|
5,380
|
|
|
45,840
|
|
|
51,220
|
|
|||
Aftermarket
|
|
79,910
|
|
|
56,200
|
|
|
136,110
|
|
|||
Retail
|
|
88,230
|
|
|
—
|
|
|
88,230
|
|
|||
Industrial
|
|
23,860
|
|
|
2,340
|
|
|
26,200
|
|
|||
E-commerce
|
|
38,300
|
|
|
1,650
|
|
|
39,950
|
|
|||
Other
|
|
20
|
|
|
3,570
|
|
|
3,590
|
|
|||
Total
|
|
$
|
300,670
|
|
|
$
|
247,500
|
|
|
$
|
548,170
|
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Net Sales
|
|
|
|
|
|
|
||||||
Automotive OEM
|
|
$
|
60,320
|
|
|
$
|
134,930
|
|
|
$
|
195,250
|
|
Automotive OES
|
|
4,230
|
|
|
39,980
|
|
|
44,210
|
|
|||
Aftermarket
|
|
96,700
|
|
|
65,180
|
|
|
161,880
|
|
|||
Retail
|
|
96,330
|
|
|
—
|
|
|
96,330
|
|
|||
Industrial
|
|
31,680
|
|
|
—
|
|
|
31,680
|
|
|||
E-commerce
|
|
29,340
|
|
|
3,880
|
|
|
33,220
|
|
|||
Other
|
|
1,220
|
|
|
12,460
|
|
|
13,680
|
|
|||
Total
|
|
$
|
319,820
|
|
|
$
|
256,430
|
|
|
$
|
576,250
|
|
(dollars in thousands)
|
|
Horizon Americas
|
||
|
|
|
||
Balance at December 31, 2018
|
|
$
|
4,500
|
|
Foreign currency translation
|
|
(300
|
)
|
|
Balance at September 30, 2019
|
|
$
|
4,200
|
|
|
|
As of
September 30, 2019 |
||||||||||
Intangible Category by Useful Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
||||||
Customer relationships (2 – 20 years)
|
|
$
|
162,940
|
|
|
$
|
(129,020
|
)
|
|
$
|
33,920
|
|
Technology and other (3 – 15 years)
|
|
20,590
|
|
|
(14,630
|
)
|
|
5,960
|
|
|||
Trademark/Trade names (1 – 8 years)
|
|
150
|
|
|
(150
|
)
|
|
—
|
|
|||
Total finite-lived intangible assets
|
|
183,680
|
|
|
(143,800
|
)
|
|
39,880
|
|
|||
Trademark/Trade names, indefinite-lived
|
|
20,470
|
|
|
—
|
|
|
20,470
|
|
|||
Total other intangible assets
|
|
$
|
204,150
|
|
|
$
|
(143,800
|
)
|
|
$
|
60,350
|
|
|
|
As of
December 31, 2018 |
||||||||||
Intangible Category by Useful Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
||||||
Customer relationships (2 – 20 years)
|
|
$
|
168,230
|
|
|
$
|
(124,510
|
)
|
|
$
|
43,720
|
|
Technology and other (3 – 15 years)
|
|
20,490
|
|
|
(15,400
|
)
|
|
5,090
|
|
|||
Trademark/Trade names (1 – 8 years)
|
|
150
|
|
|
(150
|
)
|
|
—
|
|
|||
Total finite-lived intangible assets
|
|
188,870
|
|
|
(140,060
|
)
|
|
48,810
|
|
|||
Trademark/Trade names, indefinite-lived
|
|
20,590
|
|
|
—
|
|
|
20,590
|
|
|||
Total other intangible assets
|
|
$
|
209,460
|
|
|
$
|
(140,060
|
)
|
|
$
|
69,400
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Technology and other, included in cost of sales
|
|
$
|
260
|
|
|
$
|
430
|
|
|
$
|
980
|
|
|
$
|
990
|
|
Customer relationships and Trademark/Trade names, included in selling, general and administrative expenses
|
|
1,410
|
|
|
1,600
|
|
|
3,820
|
|
|
4,650
|
|
||||
Total amortization expense
|
|
$
|
1,670
|
|
|
$
|
2,030
|
|
|
$
|
4,800
|
|
|
$
|
5,640
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
(dollars in thousands)
|
||||||
Finished goods
|
|
$
|
80,440
|
|
|
$
|
89,000
|
|
Work in process
|
|
12,880
|
|
|
16,160
|
|
||
Raw materials
|
|
47,830
|
|
|
47,040
|
|
||
Total inventories
|
|
$
|
141,150
|
|
|
$
|
152,200
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
(dollars in thousands)
|
||||||
Land and land improvements
|
|
$
|
440
|
|
|
$
|
460
|
|
Buildings
|
|
20,460
|
|
|
18,680
|
|
||
Machinery and equipment
|
|
120,840
|
|
|
121,230
|
|
||
|
|
141,740
|
|
|
140,370
|
|
||
Accumulated depreciation
|
|
(63,070
|
)
|
|
(53,870
|
)
|
||
Property and equipment, net
|
|
$
|
78,670
|
|
|
$
|
86,500
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
(dollars in thousands)
|
||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Depreciation expense, included in cost of sales
|
|
$
|
3,170
|
|
|
$
|
2,960
|
|
|
$
|
9,760
|
|
|
$
|
8,630
|
|
Depreciation expense, included in selling, general and administrative expense
|
|
1,420
|
|
|
270
|
|
|
2,220
|
|
|
780
|
|
||||
Total depreciation expense
|
|
$
|
4,590
|
|
|
$
|
3,230
|
|
|
$
|
11,980
|
|
|
$
|
9,410
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
(dollars in thousands)
|
||||||
Customer incentives
|
|
$
|
12,700
|
|
|
$
|
9,990
|
|
Customer claims
|
|
10,370
|
|
|
14,130
|
|
||
Accrued compensation
|
|
8,890
|
|
|
5,680
|
|
||
Accrued professional services
|
|
3,940
|
|
|
4,380
|
|
||
Restructuring
|
|
2,450
|
|
|
7,530
|
|
||
Deferred purchase price
|
|
750
|
|
|
3,400
|
|
||
Short-term tax liabilities
|
|
750
|
|
|
1,130
|
|
||
Cross currency swap
|
|
—
|
|
|
1,610
|
|
||
Other
|
|
13,170
|
|
|
10,670
|
|
||
Total accrued liabilities
|
|
$
|
53,020
|
|
|
$
|
58,520
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
(dollars in thousands)
|
||||||
Long-term tax liabilities
|
|
$
|
6,220
|
|
|
$
|
6,270
|
|
Deferred purchase price
|
|
2,440
|
|
|
30
|
|
||
Restructuring
|
|
1,980
|
|
|
2,580
|
|
||
Other
|
|
10,130
|
|
|
10,870
|
|
||
Total other long-term liabilities
|
|
$
|
20,770
|
|
|
$
|
19,750
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
(dollars in thousands)
|
||||||
ABL Facility
|
|
$
|
19,660
|
|
|
$
|
61,570
|
|
First Lien Term Loan
|
|
25,010
|
|
|
190,520
|
|
||
Second Lien Term Loan
|
|
55,060
|
|
|
—
|
|
||
Convertible Notes
|
|
125,000
|
|
|
125,000
|
|
||
Bank facilities, capital leases and other long-term debt
|
|
14,470
|
|
|
18,990
|
|
||
Gross debt
|
|
239,200
|
|
|
396,080
|
|
||
Less:
|
|
|
|
|
||||
Current maturities, long-term debt
|
|
24,270
|
|
|
13,860
|
|
||
Gross long-term debt
|
|
214,930
|
|
|
382,220
|
|
||
Less:
|
|
|
|
|
||||
Unamortized debt issuance costs and original issuance discount on First Lien Term Loan
|
|
790
|
|
|
7,380
|
|
||
Unamortized debt issuance costs and discount on Second Lien Term Loan
|
|
13,800
|
|
|
—
|
|
||
Unamortized debt issuance costs and discount on Convertible Notes
|
|
19,610
|
|
|
24,190
|
|
||
Unamortized debt issuance costs and discount
|
|
34,200
|
|
|
31,570
|
|
||
Long-term debt
|
|
$
|
180,730
|
|
|
$
|
350,650
|
|
|
|
|
|
Asset / (Liability) Derivatives
|
||||||
|
|
Balance Sheet Caption
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
(dollars in thousands)
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
220
|
|
|
$
|
1,910
|
|
Cross currency swap
|
|
Accrued liabilities
|
|
—
|
|
|
(2,480
|
)
|
||
Total derivatives designated as hedging instruments
|
|
|
|
220
|
|
|
(570
|
)
|
||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Prepaid expenses and other current assets
|
|
100
|
|
|
70
|
|
||
Total derivatives de-designated as hedging instruments
|
|
|
|
100
|
|
|
70
|
|
||
Total derivatives
|
|
|
|
$
|
320
|
|
|
$
|
(500
|
)
|
|
Amount of Gain Recognized in AOCI on Derivatives (net of tax)
|
||||||
|
As of September 30,
|
|
As of December 31,
|
||||
|
2019
|
|
2018
|
||||
|
(dollars in thousands)
|
||||||
Derivatives classified as cash flow hedges:
|
|||||||
Foreign currency forward contracts
|
$
|
220
|
|
|
$
|
1,870
|
|
Cross currency swap
|
$
|
—
|
|
|
$
|
90
|
|
|
|
Nine months ended September 30,
|
||||||||||||||
|
|
2019
|
2018
|
|||||||||||||
|
|
Cost of sales
|
|
Interest expense
|
|
Cost of sales
|
|
Interest expense
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Total Amounts of Expense Line Items Presented in the Statement of Operations in Which the Effects of Cash Flow Hedges are Recorded
|
|
$
|
(460,010
|
)
|
|
$
|
(50,270
|
)
|
|
$
|
(472,120
|
)
|
|
$
|
(19,580
|
)
|
Amount of Gain Reclassified from AOCI into Earnings
|
|
|
||||||||||||||
Derivatives classified as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
1,550
|
|
|
$
|
—
|
|
|
$
|
590
|
|
|
$
|
—
|
|
Cross currency swap
|
|
$
|
—
|
|
|
$
|
900
|
|
|
$
|
—
|
|
|
$
|
4,000
|
|
|
|
Frequency
|
|
Asset / (Liability)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
|
|
|
|
(dollars in thousands)
|
||||||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
Recurring
|
|
$
|
320
|
|
|
$
|
—
|
|
|
$
|
320
|
|
|
$
|
—
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Foreign currency forward contracts
|
|
Recurring
|
|
$
|
1,980
|
|
|
$
|
—
|
|
|
$
|
1,980
|
|
|
$
|
—
|
|
Cross currency swaps
|
|
Recurring
|
|
$
|
(2,480
|
)
|
|
$
|
—
|
|
|
$
|
(2,480
|
)
|
|
$
|
—
|
|
|
|
Employee Costs
|
|
Facility Closure and Other Costs
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Balance at January 1, 2019
|
|
$
|
4,990
|
|
|
$
|
5,120
|
|
|
$
|
10,110
|
|
Payments and other(1)
|
|
(3,810
|
)
|
|
$
|
(1,870
|
)
|
|
(5,680
|
)
|
||
Balance at September 30, 2019
|
|
$
|
1,180
|
|
|
$
|
3,250
|
|
|
$
|
4,430
|
|
Years ending December 31,
|
|
Operating Leases
|
||
|
|
(dollars in thousands)
|
||
2019
|
|
$
|
4,990
|
|
2020
|
|
14,120
|
|
|
2021
|
|
13,180
|
|
|
2022
|
|
11,270
|
|
|
2023
|
|
9,000
|
|
|
2024 and thereafter
|
|
29,900
|
|
|
Total lease payments
|
|
82,460
|
|
|
Less imputed interest
|
|
(21,720
|
)
|
|
Present value of lease liabilities
|
|
$
|
60,740
|
|
December 31,
|
|
Minimum Payments
|
||
|
|
(dollars in thousands)
|
||
2019
|
|
$
|
12,380
|
|
2020
|
|
11,350
|
|
|
2021
|
|
10,120
|
|
|
2022
|
|
7,350
|
|
|
2023
|
|
4,350
|
|
|
Thereafter
|
|
12,480
|
|
|
Total
|
|
$
|
58,030
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(dollars in thousands, except share and per share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net loss from continuing operations
|
|
$
|
(37,500
|
)
|
|
$
|
(37,110
|
)
|
|
$
|
(78,030
|
)
|
|
$
|
(167,590
|
)
|
Income from discontinued operations, net of tax
|
|
$
|
182,750
|
|
|
$
|
4,110
|
|
|
$
|
189,520
|
|
|
$
|
9,670
|
|
Less: Net loss attributable to noncontrolling interest
|
|
$
|
(260
|
)
|
|
$
|
(240
|
)
|
|
$
|
(840
|
)
|
|
$
|
(720
|
)
|
Net income (loss) attributable to Horizon Global
|
|
$
|
145,510
|
|
|
$
|
(32,760
|
)
|
|
$
|
112,330
|
|
|
$
|
(157,200
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding, basic
|
|
25,329,492
|
|
|
25,101,847
|
|
|
25,267,310
|
|
|
25,028,072
|
|
||||
Dilutive effect of stock-based awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average shares outstanding, diluted
|
|
25,329,492
|
|
|
25,101,847
|
|
|
25,267,310
|
|
|
25,028,072
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share attributable to Horizon Global
|
|
|
|
|
|
|
|
|
||||||||
Continuing Operations
|
|
$
|
(1.47
|
)
|
|
$
|
(1.47
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(6.67
|
)
|
Discontinued Operations
|
|
$
|
7.21
|
|
|
$
|
0.16
|
|
|
$
|
7.50
|
|
|
$
|
0.39
|
|
Total
|
|
$
|
5.74
|
|
|
$
|
(1.31
|
)
|
|
$
|
4.45
|
|
|
$
|
(6.28
|
)
|
Diluted income (loss) per share attributable to Horizon Global
|
|
|
|
|
|
|
|
|
||||||||
Continuing Operations
|
|
$
|
(1.47
|
)
|
|
$
|
(1.47
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(6.67
|
)
|
Discontinued Operations
|
|
$
|
7.21
|
|
|
$
|
0.16
|
|
|
$
|
7.50
|
|
|
$
|
0.39
|
|
Total
|
|
$
|
5.74
|
|
|
$
|
(1.31
|
)
|
|
$
|
4.45
|
|
|
$
|
(6.28
|
)
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Number of options
|
|
53,321
|
|
|
220,726
|
|
|
61,184
|
|
|
285,538
|
|
Exercise price of options
|
|
$9.20 - $11.29
|
|
|
$9.20 - $11.29
|
|
|
$9.20 - $11.29
|
|
|
$9.20 - $11.29
|
|
Restricted stock units
|
|
1,524,778
|
|
|
629,507
|
|
|
1,101,855
|
|
|
685,286
|
|
Convertible Notes
|
|
5,005,000
|
|
|
5,005,000
|
|
|
5,005,000
|
|
|
5,005,000
|
|
Convertible Notes warrants
|
|
5,005,000
|
|
|
5,005,000
|
|
|
5,005,000
|
|
|
5,005,000
|
|
Second Lien Term Loan warrants
|
|
6,545,479
|
|
|
—
|
|
|
3,671,607
|
|
|
—
|
|
|
|
Number of Stock Options
|
|
Weighted Average Exercise Price
|
|
Average Remaining Contractual Life (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at December 31, 2018
|
|
92,967
|
|
|
$
|
10.40
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled, forfeited
|
|
(39,646
|
)
|
|
10.31
|
|
|
|
|
|
|||
Expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at September 30, 2019
|
|
53,321
|
|
|
$
|
10.43
|
|
|
5.8
|
|
$
|
—
|
|
|
|
Number of Restricted Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2018
|
|
419,928
|
|
|
$
|
9.75
|
|
Granted
|
|
1,527,322
|
|
|
3.46
|
|
|
Vested
|
|
(145,981
|
)
|
|
7.40
|
|
|
Canceled, forfeited
|
|
(287,829
|
)
|
|
4.02
|
|
|
Outstanding at September 30, 2019
|
|
1,513,440
|
|
|
$
|
4.31
|
|
|
|
Derivative Instruments
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Balance at January 1, 2019
|
|
$
|
1,960
|
|
|
$
|
5,800
|
|
|
$
|
7,760
|
|
Net unrealized gains arising during the period
|
|
730
|
|
|
(30
|
)
|
|
700
|
|
|||
Less: Net realized gains reclassified to net loss
|
|
2,450
|
|
|
—
|
|
|
2,450
|
|
|||
Amounts reclassified from AOCI
|
|
(20
|
)
|
|
(17,240
|
)
|
|
(17,260
|
)
|
|||
Net current-period change
|
|
(1,740
|
)
|
|
(17,270
|
)
|
|
(19,010
|
)
|
|||
Balance at September 30, 2019
|
|
$
|
220
|
|
|
$
|
(11,470
|
)
|
|
$
|
(11,250
|
)
|
|
|
Derivative Instruments
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Balance at January 1, 2018
|
|
$
|
(310
|
)
|
|
$
|
10,880
|
|
|
$
|
10,570
|
|
Net unrealized gains (losses) arising during the period (a)
|
|
6,850
|
|
|
(4,330
|
)
|
|
2,520
|
|
|||
Less: Net realized losses reclassified to net loss (b)
|
|
3,890
|
|
|
—
|
|
|
3,890
|
|
|||
Net current-period change
|
|
2,960
|
|
|
(4,330
|
)
|
|
(1,370
|
)
|
|||
Balance at September 30, 2018
|
|
$
|
2,650
|
|
|
$
|
6,550
|
|
|
$
|
9,200
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net Sales
|
|
|
|
|
|
|
|
|
||||||||
Horizon Americas
|
|
$
|
96,220
|
|
|
$
|
115,510
|
|
|
$
|
300,670
|
|
|
$
|
319,820
|
|
Horizon Europe-Africa
|
|
81,630
|
|
|
78,520
|
|
|
247,500
|
|
|
256,430
|
|
||||
Total
|
|
$
|
177,850
|
|
|
$
|
194,030
|
|
|
$
|
548,170
|
|
|
$
|
576,250
|
|
Operating Profit (Loss)
|
|
|
|
|
|
|
|
|
||||||||
Horizon Americas
|
|
$
|
(2,230
|
)
|
|
$
|
7,270
|
|
|
$
|
5,760
|
|
|
$
|
4,730
|
|
Horizon Europe-Africa
|
|
1,730
|
|
|
(31,370
|
)
|
|
120
|
|
|
(132,150
|
)
|
||||
Corporate
|
|
(12,260
|
)
|
|
(5,800
|
)
|
|
(29,360
|
)
|
|
(28,950
|
)
|
||||
Total
|
|
$
|
(12,760
|
)
|
|
$
|
(29,900
|
)
|
|
$
|
(23,480
|
)
|
|
$
|
(156,370
|
)
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Loss on sale of business
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,630
|
)
|
|
$
|
—
|
|
Foreign currency gain / (loss)
|
|
(1,180
|
)
|
|
(530
|
)
|
|
(1,800
|
)
|
|
(1,070
|
)
|
||||
Customer pay discounts
|
|
(300
|
)
|
|
(610
|
)
|
|
(1,220
|
)
|
|
(1,400
|
)
|
||||
Accretion arising from lease recovery
|
|
(30
|
)
|
|
(50
|
)
|
|
(100
|
)
|
|
(200
|
)
|
||||
Brazil acquisition indemnification asset
|
|
—
|
|
|
(290
|
)
|
|
—
|
|
|
(1,410
|
)
|
||||
Brink acquisition ticking fee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,130
|
)
|
||||
Other
|
|
(130
|
)
|
|
440
|
|
|
140
|
|
|
1,800
|
|
||||
Total
|
|
$
|
(1,640
|
)
|
|
$
|
(1,040
|
)
|
|
$
|
(6,610
|
)
|
|
$
|
(7,410
|
)
|
•
|
Our ability to realize the expected economic benefits of the changes made to our manufacturing and distribution footprint and management team during 2018 and 2019
|
•
|
Our ability to quickly and cost-effectively introduce new products
|
•
|
Our ability to continue to integrate acquired companies or products that have historically supplemented existing product lines, add new distribution channels and expand our geographic coverage and realize desired operating efficiencies
|
•
|
Our ability to manage our cost structure more efficiently via supply base management, internal sourcing and/or purchasing of materials, selective outsourcing and/or purchasing of support functions, working capital management, and leverage of our administrative functions.
|
|
|
Three months ended September 30,
|
|
Change
|
|
Constant Currency Change
|
||||||||||||||||||||||
|
|
2019
|
|
As a Percentage of Net Sales
|
|
2018
|
|
As a Percentage of Net Sales
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
|
|
(dollars in thousands)
|
||||||||||||||||||||||||||
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Horizon Americas
|
|
$
|
96,220
|
|
|
54.1
|
%
|
|
$
|
115,510
|
|
|
59.5
|
%
|
|
$
|
(19,290
|
)
|
|
(16.7
|
%)
|
|
$
|
(19,280
|
)
|
|
(16.7
|
%)
|
Horizon Europe-Africa
|
|
81,630
|
|
|
45.9
|
%
|
|
78,520
|
|
|
40.5
|
%
|
|
3,110
|
|
|
4.0
|
%
|
|
6,990
|
|
|
8.9
|
%
|
||||
Total
|
|
$
|
177,850
|
|
|
100.0
|
%
|
|
$
|
194,030
|
|
|
100.0
|
%
|
|
$
|
(16,180
|
)
|
|
(8.3
|
%)
|
|
$
|
(12,290
|
)
|
|
(6.3
|
%)
|
Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Horizon Americas
|
|
$
|
17,270
|
|
|
17.9
|
%
|
|
$
|
27,780
|
|
|
24.0
|
%
|
|
$
|
(10,510
|
)
|
|
(37.8
|
%)
|
|
$
|
(10,460
|
)
|
|
(37.7
|
%)
|
Horizon Europe-Africa
|
|
11,020
|
|
|
13.5
|
%
|
|
6,750
|
|
|
8.6
|
%
|
|
4,270
|
|
|
63.3
|
%
|
|
4,800
|
|
|
71.1
|
%
|
||||
Total
|
|
$
|
28,290
|
|
|
15.9
|
%
|
|
$
|
34,530
|
|
|
17.8
|
%
|
|
$
|
(6,240
|
)
|
|
(18.1
|
%)
|
|
$
|
(5,660
|
)
|
|
(16.4
|
%)
|
Selling, General and Administrative Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Horizon Americas
|
|
$
|
19,500
|
|
|
20.3
|
%
|
|
$
|
20,460
|
|
|
17.7
|
%
|
|
$
|
(960
|
)
|
|
(4.7
|
%)
|
|
$
|
(940
|
)
|
|
(4.6
|
%)
|
Horizon Europe-Africa
|
|
9,330
|
|
|
11.4
|
%
|
|
11,370
|
|
|
14.5
|
%
|
|
(2,040
|
)
|
|
(17.9
|
%)
|
|
(1,600
|
)
|
|
(14.1
|
%)
|
||||
Corporate
|
|
12,270
|
|
|
6.9
|
%
|
|
5,850
|
|
|
3.0
|
%
|
|
6,420
|
|
|
109.7
|
%
|
|
N/A
|
|
|
N/A
|
|
||||
Total
|
|
$
|
41,100
|
|
|
23.1
|
%
|
|
$
|
37,680
|
|
|
19.4
|
%
|
|
$
|
3,420
|
|
|
9.1
|
%
|
|
$
|
(2,540
|
)
|
|
15.8
|
%
|
Operating Profit (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Horizon Americas
|
|
$
|
(2,230
|
)
|
|
(2.3
|
)%
|
|
$
|
7,270
|
|
|
6.3
|
%
|
|
$
|
(9,500
|
)
|
|
(130.7
|
%)
|
|
$
|
(9,480
|
)
|
|
(130.4
|
%)
|
Horizon Europe-Africa
|
|
1,730
|
|
|
2.1
|
%
|
|
(31,370
|
)
|
|
(40.0
|
)%
|
|
33,100
|
|
|
(105.5
|
%)
|
|
33,200
|
|
|
(105.8
|
%)
|
||||
Corporate
|
|
(12,260
|
)
|
|
(6.9
|
)%
|
|
(5,800
|
)
|
|
(3.0
|
)%
|
|
(6,460
|
)
|
|
111.4
|
%
|
|
N/A
|
|
|
N/A
|
|
||||
Total
|
|
$
|
(12,760
|
)
|
|
(7.2
|
)%
|
|
$
|
(29,900
|
)
|
|
(15.4
|
)%
|
|
$
|
17,140
|
|
|
(57.3
|
%)
|
|
$
|
23,720
|
|
|
22.0
|
%
|
|
|
Three months ended
September 30, 2019 |
||||||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Corporate
|
|
Consolidated
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net income attributable to Horizon Global
|
|
|
|
|
|
|
|
$
|
145,510
|
|
||||||
Net loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
(260
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
|
145,250
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
|
24,120
|
|
|||||||
Income tax benefit
|
|
|
|
|
|
|
|
(1,020
|
)
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
6,250
|
|
|||||||
EBITDA
|
|
(940
|
)
|
|
1,380
|
|
|
174,160
|
|
|
174,600
|
|
||||
Net loss attributable to noncontrolling interest
|
|
—
|
|
|
260
|
|
|
—
|
|
|
260
|
|
||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(182,750
|
)
|
|
(182,750
|
)
|
||||
Severance
|
|
—
|
|
|
—
|
|
|
1,620
|
|
|
1,620
|
|
||||
Restructuring, relocation and related business disruption costs
|
|
(200
|
)
|
|
—
|
|
|
4,250
|
|
|
4,050
|
|
||||
Non-cash stock compensation
|
|
—
|
|
|
—
|
|
|
850
|
|
|
850
|
|
||||
(Gain) loss on business divestitures and other assets
|
|
320
|
|
|
—
|
|
|
(1,320
|
)
|
|
(1,000
|
)
|
||||
Product liability and litigation claims
|
|
820
|
|
|
(4,270
|
)
|
|
—
|
|
|
(3,450
|
)
|
||||
Debt issuance costs
|
|
—
|
|
|
—
|
|
|
530
|
|
|
530
|
|
||||
Unrealized remeasurement costs
|
|
240
|
|
|
650
|
|
|
300
|
|
|
1,190
|
|
||||
Other (income) expense, net
|
|
310
|
|
|
2,720
|
|
|
(1,980
|
)
|
|
1,050
|
|
||||
Adjusted EBITDA
|
|
$
|
550
|
|
|
$
|
740
|
|
|
$
|
(4,340
|
)
|
|
$
|
(3,050
|
)
|
|
|
Three months ended
September 30, 2018 |
||||||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Corporate
|
|
Consolidated
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net loss attributable to Horizon Global
|
|
|
|
|
|
|
|
$
|
(32,760
|
)
|
||||||
Net loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
(240
|
)
|
|||||||
Net loss
|
|
|
|
|
|
|
|
(33,000
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
|
7,590
|
|
|||||||
Income tax benefit
|
|
|
|
|
|
|
|
(1,420
|
)
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
5,090
|
|
|||||||
EBITDA
|
|
8,030
|
|
|
(31,560
|
)
|
|
1,790
|
|
|
(21,740
|
)
|
||||
Net loss attributable to noncontrolling interest
|
|
—
|
|
|
230
|
|
|
—
|
|
|
230
|
|
||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(4,110
|
)
|
|
(4,110
|
)
|
||||
Severance
|
|
660
|
|
|
—
|
|
|
—
|
|
|
660
|
|
||||
Restructuring, relocation and related business disruption costs
|
|
4,220
|
|
|
1,370
|
|
|
—
|
|
|
5,590
|
|
||||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
26,640
|
|
|
—
|
|
|
26,640
|
|
||||
Non-cash stock compensation
|
|
—
|
|
|
—
|
|
|
230
|
|
|
230
|
|
||||
Acquisition and integration costs
|
|
—
|
|
|
70
|
|
|
1,130
|
|
|
1,200
|
|
||||
(Gain) loss on business divestitures and other assets
|
|
650
|
|
|
—
|
|
|
—
|
|
|
650
|
|
||||
Unrealized remeasurement costs
|
|
110
|
|
|
530
|
|
|
(110
|
)
|
|
530
|
|
||||
Other (income) expense, net
|
|
570
|
|
|
2,650
|
|
|
(3,290
|
)
|
|
(70
|
)
|
||||
Adjusted EBITDA
|
|
$
|
14,240
|
|
|
$
|
(70
|
)
|
|
$
|
(4,360
|
)
|
|
$
|
9,810
|
|
|
|
Three months ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net Sales
|
|
|
|
|
|
|
|
|
|||||||
Automotive OEM
|
|
$
|
21,050
|
|
|
$
|
20,320
|
|
|
$
|
730
|
|
|
3.6
|
%
|
Automotive OES
|
|
1,960
|
|
|
1,700
|
|
|
260
|
|
|
15.3
|
%
|
|||
Aftermarket
|
|
26,920
|
|
|
38,470
|
|
|
(11,550
|
)
|
|
(30.0
|
)%
|
|||
Retail
|
|
26,600
|
|
|
29,600
|
|
|
(3,000
|
)
|
|
(10.1
|
)%
|
|||
Industrial
|
|
7,650
|
|
|
11,160
|
|
|
(3,510
|
)
|
|
(31.5
|
)%
|
|||
E-commerce
|
|
12,040
|
|
|
13,750
|
|
|
(1,710
|
)
|
|
(12.4
|
)%
|
|||
Other
|
|
—
|
|
|
510
|
|
|
(510
|
)
|
|
N/A
|
|
|||
Total
|
|
$
|
96,220
|
|
|
$
|
115,510
|
|
|
$
|
(19,290
|
)
|
|
(16.7
|
)%
|
–
|
$3.3 million unfavorable material input costs primarily related to higher freight and tariff costs
|
–
|
$3.0 million unfavorable manufacturing costs; and
|
–
|
$3.0 million higher scrap costs and inventory reserves; partially offset by
|
–
|
$2.7 million of prior-year comparable period restructuring and footprint rationalization projects and related cost inefficiencies that did not reoccur; and
|
–
|
$2.4 million in lower outbound freight costs
|
–
|
$3.5 million in prior-year comparable period organizational restructuring efforts and costs that did not reoccur, partially offset by
|
–
|
$1.6 million additional professional fees and litigation claims; and
|
–
|
$0.8 million increased allowance for doubtful accounts
|
|
|
Three months ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net Sales
|
|
|
|
|
|
|
|
|
|||||||
Automotive OEM
|
|
$
|
43,200
|
|
|
$
|
40,650
|
|
|
$
|
2,550
|
|
|
6.3
|
%
|
Automotive OES
|
|
16,510
|
|
|
12,600
|
|
|
3,910
|
|
|
31.0
|
%
|
|||
Aftermarket
|
|
19,840
|
|
|
19,980
|
|
|
(140
|
)
|
|
(0.7
|
)%
|
|||
Industrial
|
|
780
|
|
|
—
|
|
|
780
|
|
|
N/A
|
|
|||
E-commerce
|
|
560
|
|
|
1,290
|
|
|
(730
|
)
|
|
(56.6
|
)%
|
|||
Other
|
|
740
|
|
|
4,000
|
|
|
(3,260
|
)
|
|
(81.5
|
)%
|
|||
Total
|
|
$
|
81,630
|
|
|
$
|
78,520
|
|
|
$
|
3,110
|
|
|
4.0
|
%
|
–
|
$4.3 million favorable expense recovery related to the settlement of potential product liability claims (see Note 13, “Contingencies”) with one OEM customer
|
–
|
$1.3 million of additional costs incurred in the prior-year period related to restructuring and footprint rationalization projects that did not reoccur; and
|
–
|
$0.7 million reduction in personnel and compensation costs
|
|
|
Nine months ended
September 30, 2019 |
||||||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Corporate
|
|
Consolidated
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net income attributable to Horizon Global
|
|
|
|
|
|
|
|
$
|
112,330
|
|
||||||
Net loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
(840
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
|
111,490
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
|
50,270
|
|
|||||||
Income tax benefit
|
|
|
|
|
|
|
|
(2,330
|
)
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
16,790
|
|
|||||||
EBITDA
|
|
10,100
|
|
|
(3,770
|
)
|
|
169,890
|
|
|
176,220
|
|
||||
Net loss attributable to noncontrolling interest
|
|
—
|
|
|
840
|
|
|
—
|
|
|
840
|
|
||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(189,520
|
)
|
|
(189,520
|
)
|
||||
Severance
|
|
(200
|
)
|
|
10
|
|
|
1,620
|
|
|
1,430
|
|
||||
Restructuring, relocation and related business disruption costs
|
|
1,110
|
|
|
(1,410
|
)
|
|
4,250
|
|
|
3,950
|
|
||||
Non-cash stock compensation
|
|
—
|
|
|
—
|
|
|
1,820
|
|
|
1,820
|
|
||||
(Gain) loss on business divestitures and other assets
|
|
1,280
|
|
|
3,630
|
|
|
—
|
|
|
4,910
|
|
||||
Board transition support
|
|
—
|
|
|
—
|
|
|
1,450
|
|
|
1,450
|
|
||||
Product liability and litigation claims
|
|
820
|
|
|
50
|
|
|
—
|
|
|
870
|
|
||||
Debt issuance costs
|
|
—
|
|
|
—
|
|
|
2,660
|
|
|
2,660
|
|
||||
Unrealized remeasurement costs
|
|
160
|
|
|
1,210
|
|
|
440
|
|
|
1,810
|
|
||||
Other (income) expense, net
|
|
730
|
|
|
8,140
|
|
|
(7,120
|
)
|
|
1,750
|
|
||||
Adjusted EBITDA
|
|
$
|
14,000
|
|
|
$
|
8,700
|
|
|
$
|
(14,510
|
)
|
|
$
|
8,190
|
|
|
|
Nine months ended
September 30, 2018 |
||||||||||||||
|
|
Horizon Americas
|
|
Horizon Europe-Africa
|
|
Corporate
|
|
Consolidated
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net loss attributable to Horizon Global
|
|
|
|
|
|
|
|
$
|
(157,200
|
)
|
||||||
Net loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
(720
|
)
|
|||||||
Net loss
|
|
|
|
|
|
|
|
(157,920
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
|
19,580
|
|
|||||||
Income tax benefit
|
|
|
|
|
|
|
|
(15,770
|
)
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
15,070
|
|
|||||||
EBITDA
|
|
7,260
|
|
|
(132,630
|
)
|
|
(13,670
|
)
|
|
(139,040
|
)
|
||||
Net loss attributable to noncontrolling interest
|
|
—
|
|
|
720
|
|
|
—
|
|
|
720
|
|
||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(9,670
|
)
|
|
(9,670
|
)
|
||||
Severance
|
|
5,010
|
|
|
1,560
|
|
|
2,750
|
|
|
9,320
|
|
||||
Restructuring, relocation and related business disruption costs
|
|
11,830
|
|
|
2,820
|
|
|
—
|
|
|
14,650
|
|
||||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
125,770
|
|
|
—
|
|
|
125,770
|
|
||||
Non-cash stock compensation
|
|
—
|
|
|
—
|
|
|
1,440
|
|
|
1,440
|
|
||||
Acquisition and integration costs
|
|
—
|
|
|
1,390
|
|
|
16,130
|
|
|
17,520
|
|
||||
(Gain) loss on business divestitures and other assets
|
|
1,490
|
|
|
—
|
|
|
—
|
|
|
1,490
|
|
||||
Unrealized remeasurement costs
|
|
110
|
|
|
750
|
|
|
200
|
|
|
1,060
|
|
||||
Other (income) expense, net
|
|
2,160
|
|
|
8,310
|
|
|
(10,710
|
)
|
|
(240
|
)
|
||||
Adjusted EBITDA
|
|
$
|
27,860
|
|
|
$
|
8,690
|
|
|
$
|
(13,530
|
)
|
|
$
|
23,020
|
|
|
|
Nine months ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net Sales
|
|
|
|
|
|
|
|
|
|||||||
Automotive OEM
|
|
$
|
64,970
|
|
|
$
|
60,320
|
|
|
$
|
4,650
|
|
|
7.7
|
%
|
Automotive OES
|
|
5,380
|
|
|
4,230
|
|
|
1,150
|
|
|
27.2
|
%
|
|||
Aftermarket
|
|
79,910
|
|
|
96,700
|
|
|
(16,790
|
)
|
|
(17.4
|
)%
|
|||
Retail
|
|
88,230
|
|
|
96,330
|
|
|
(8,100
|
)
|
|
(8.4
|
)%
|
|||
Industrial
|
|
23,860
|
|
|
31,680
|
|
|
(7,820
|
)
|
|
(24.7
|
)%
|
|||
E-commerce
|
|
38,300
|
|
|
29,340
|
|
|
8,960
|
|
|
30.5
|
%
|
|||
Other
|
|
20
|
|
|
1,220
|
|
|
(1,200
|
)
|
|
N/A
|
|
|||
Total
|
|
$
|
300,670
|
|
|
$
|
319,820
|
|
|
$
|
(19,150
|
)
|
|
(6.0
|
)%
|
–
|
$9.1 million unfavorable material input costs primarily related to higher freight and tariff costs
|
–
|
$8.5 million unfavorable manufacturing costs; and
|
–
|
$4.6 million higher scrap costs and inventory reserves; partially offset by
|
–
|
$8.0 million of prior-year comparable period restructuring and footprint rationalization projects and related cost inefficiencies that did not reoccur; and
|
–
|
$3.6 million in lower outbound freight costs
|
–
|
$8.8 million decrease related to prior-year organizational restructuring efforts and business footprint rationalization that did nor reoccur;
|
–
|
$4.0 million of lower personnel and compensation costs; and
|
–
|
$1.4 million of lower sales and marketing costs
|
|
|
Nine months ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net Sales
|
|
|
|
|
|
|
|
|
|||||||
Automotive OEM
|
|
$
|
137,900
|
|
|
$
|
134,930
|
|
|
$
|
2,970
|
|
|
2.2
|
%
|
Automotive OES
|
|
45,840
|
|
|
39,980
|
|
|
5,860
|
|
|
14.7
|
%
|
|||
Aftermarket
|
|
56,200
|
|
|
65,180
|
|
|
(8,980
|
)
|
|
(13.8
|
)%
|
|||
Industrial
|
|
2,340
|
|
|
—
|
|
|
2,340
|
|
|
N/A
|
|
|||
E-commerce
|
|
1,650
|
|
|
3,880
|
|
|
(2,230
|
)
|
|
(57.5
|
)%
|
|||
Other
|
|
3,570
|
|
|
12,460
|
|
|
(8,890
|
)
|
|
(71.3
|
)%
|
|||
Total
|
|
$
|
247,500
|
|
|
$
|
256,430
|
|
|
$
|
(8,930
|
)
|
|
(3.5
|
)%
|
–
|
$1.9 million unfavorable material input and freight costs, partially offset by
|
–
|
$5.8 million favorable currency exchange due to the change of the Euro in relation to the U.S. dollar
|
–
|
$4.1 million of additional costs incurred in the prior-year comparable period related to restructuring and footprint rationalization projects primarily related to the shift in production to our Brasov, Romania production facility; and
|
–
|
$1.9 million favorable currency exchange due to the change of the Euro in relation to the U.S. dollar;
|
–
|
$1.9 million reduction in functional support and personnel costs due to lower headcount;
|
–
|
$1.0 million reduction in selling and warehouse expense primarily attributable to personnel costs
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
Last twelve months ended
September 30, |
||||||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||||||||
|
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Horizon Global
|
|
$
|
145,510
|
|
|
$
|
(32,760
|
)
|
|
$
|
178,270
|
|
|
$
|
112,330
|
|
|
$
|
(157,200
|
)
|
|
$
|
269,530
|
|
|
$
|
65,620
|
|
|
$
|
(178,680
|
)
|
|
$
|
244,300
|
|
Net loss attributable to noncontrolling interest
|
|
(260
|
)
|
|
(240
|
)
|
|
(20
|
)
|
|
(840
|
)
|
|
(720
|
)
|
|
(120
|
)
|
|
(1,070
|
)
|
|
(420
|
)
|
|
(650
|
)
|
|||||||||
Net income (loss)
|
|
145,250
|
|
|
(33,000
|
)
|
|
178,250
|
|
|
111,490
|
|
|
(157,920
|
)
|
|
269,410
|
|
|
64,550
|
|
|
(179,100
|
)
|
|
243,650
|
|
|||||||||
Interest expense
|
|
24,120
|
|
|
7,590
|
|
|
16,530
|
|
|
50,270
|
|
|
19,580
|
|
|
30,690
|
|
|
58,140
|
|
|
25,240
|
|
|
32,900
|
|
|||||||||
Income tax benefit
|
|
(1,020
|
)
|
|
(1,420
|
)
|
|
400
|
|
|
(2,330
|
)
|
|
(15,770
|
)
|
|
13,440
|
|
|
1,930
|
|
|
(3,330
|
)
|
|
5,260
|
|
|||||||||
Depreciation and amortization
|
|
6,250
|
|
|
5,090
|
|
|
1,160
|
|
|
16,790
|
|
|
15,070
|
|
|
1,720
|
|
|
22,300
|
|
|
21,310
|
|
|
990
|
|
|||||||||
EBITDA
|
|
174,600
|
|
|
(21,740
|
)
|
|
196,340
|
|
|
176,220
|
|
|
(139,040
|
)
|
|
315,260
|
|
|
146,920
|
|
|
(135,880
|
)
|
|
282,800
|
|
|||||||||
Net loss attributable to noncontrolling interest
|
|
260
|
|
|
240
|
|
|
20
|
|
|
840
|
|
|
720
|
|
|
120
|
|
|
1,070
|
|
|
420
|
|
|
650
|
|
|||||||||
Income from discontinued operations, net of tax
|
|
(182,750
|
)
|
|
(4,110
|
)
|
|
(178,640
|
)
|
|
(189,520
|
)
|
|
(9,670
|
)
|
|
(179,850
|
)
|
|
(192,690
|
)
|
|
(14,210
|
)
|
|
(178,480
|
)
|
|||||||||
EBITDA from continuing operations
|
|
(7,890
|
)
|
|
(25,610
|
)
|
|
17,720
|
|
|
(12,460
|
)
|
|
(147,990
|
)
|
|
135,530
|
|
|
(44,700
|
)
|
|
(149,670
|
)
|
|
104,970
|
|
|||||||||
Adjustments pursuant to Term Loan Agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Losses on sale of receivables
|
|
320
|
|
|
640
|
|
|
(320
|
)
|
|
1,280
|
|
|
1,490
|
|
|
(210
|
)
|
|
1,510
|
|
|
1,730
|
|
|
(220
|
)
|
|||||||||
Non-cash equity grant expenses
|
|
850
|
|
|
230
|
|
|
620
|
|
|
1,820
|
|
|
1,440
|
|
|
380
|
|
|
1,970
|
|
|
2,030
|
|
|
(60
|
)
|
|||||||||
Other non-cash expenses or losses
|
|
1,180
|
|
|
27,470
|
|
|
(26,290
|
)
|
|
5,560
|
|
|
128,250
|
|
|
(122,690
|
)
|
|
9,300
|
|
|
128,420
|
|
|
(119,120
|
)
|
|||||||||
Term Loans related fees, costs and expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,920
|
|
|
—
|
|
|
2,920
|
|
|
2,920
|
|
|
—
|
|
|
2,920
|
|
|||||||||
Lender agent related professional fees, costs, and expenses
|
|
760
|
|
|
—
|
|
|
760
|
|
|
760
|
|
|
—
|
|
|
760
|
|
|
760
|
|
|
—
|
|
|
760
|
|
|||||||||
Non-recurring expenses or costs (a)
|
|
2,890
|
|
|
7,510
|
|
|
(4,620
|
)
|
|
8,480
|
|
|
41,560
|
|
|
(33,080
|
)
|
|
20,570
|
|
|
47,060
|
|
|
(26,490
|
)
|
|||||||||
Asset sale related fees, costs, and expenses (b)
|
|
(1,320
|
)
|
|
—
|
|
|
(1,320
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-cash losses on asset sales
|
|
(50
|
)
|
|
110
|
|
|
(160
|
)
|
|
(150
|
)
|
|
520
|
|
|
(670
|
)
|
|
180
|
|
|
1,330
|
|
|
(1,150
|
)
|
|||||||||
Other expense, net
|
|
210
|
|
|
(540
|
)
|
|
750
|
|
|
(20
|
)
|
|
(2,250
|
)
|
|
2,230
|
|
|
330
|
|
|
(2,190
|
)
|
|
2,520
|
|
|||||||||
Adjusted EBITDA
|
|
(3,050
|
)
|
|
9,810
|
|
|
(12,860
|
)
|
|
8,190
|
|
|
23,020
|
|
|
(14,830
|
)
|
|
(7,160
|
)
|
|
28,710
|
|
|
(35,870
|
)
|
|||||||||
Non-recurring expense limitation (a) (b)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(31,560
|
)
|
|
31,560
|
|
|
(10,570
|
)
|
|
(37,060
|
)
|
|
26,490
|
|
|||||||||
Other expense, net
|
|
(210
|
)
|
|
540
|
|
|
(750
|
)
|
|
20
|
|
|
2,250
|
|
|
(2,230
|
)
|
|
(330
|
)
|
|
2,190
|
|
|
(2,520
|
)
|
|||||||||
Consolidated EBITDA
|
|
$
|
(3,260
|
)
|
|
$
|
10,350
|
|
|
$
|
(13,610
|
)
|
|
$
|
8,210
|
|
|
$
|
(6,290
|
)
|
|
$
|
14,500
|
|
|
$
|
(18,060
|
)
|
|
$
|
(6,160
|
)
|
|
$
|
(11,900
|
)
|
▪
|
An emerging growth company is exempt from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and financial statements, commonly known as an “auditor discussion and analysis.”
|
▪
|
An emerging growth company is not required to hold a nonbinding advisory stockholder vote on executive compensation or any golden parachute payments not previously approved by stockholders.
|
▪
|
An emerging growth company is not required to comply with the requirement of auditor attestation of management’s assessment of internal control over financial reporting, which is required for other public reporting companies by Section 404 of the Sarbanes-Oxley Act.
|
▪
|
An emerging growth company is eligible for reduced disclosure obligations regarding executive compensation in its periodic and annual reports, including without limitation exemption from the requirement to provide a compensation discussion and analysis describing compensation practices and procedures.
|
▪
|
A company that is an emerging growth company is eligible for reduced financial statement disclosure in registration statements, which must include two years of audited financial statements rather than the three years of audited financial statements that are required for other public reporting companies.
|
▪
|
enhanced the risk assessment process to take into account risks associated with the new lease standard; and
|
▪
|
added controls that address risks associated with the evaluation of all leases for balance sheet recognition, including the revision of the Company’s lease contract review controls.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (a)
|
|||
April 1 - 30, 2019
|
|
—
|
|
|
|
|
—
|
|
|
813,494
|
|
May 1 - 31, 2019
|
|
—
|
|
|
|
|
—
|
|
|
813,494
|
|
June 1 - 30, 2019
|
|
—
|
|
|
|
|
—
|
|
|
813,494
|
|
Total
|
|
—
|
|
|
|
|
—
|
|
|
|
2.1(c)
|
|
3.1(b)
|
|
3.2(a)
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(a)
|
|
Incorporated by reference to the Exhibit filed with our Current Report on Form 8-K filed on February 20, 2019 (File No. 001-37427).
|
(b)
|
|
Incorporated by reference to the Exhibit filed with our Quarterly Report on Form 10-Q filed on August 8, 2019 (File No. 001-37427).
|
(c)
|
|
Incorporated by reference to the Exhibit filed with our Current Report on Form 8-K filed on September 25, 2019 (File No. 001-37427).
|
|
|
HORIZON GLOBAL CORPORATION (Registrant)
|
||
|
|
|
|
|
|
|
|
|
/s/ JAMIE G.PIERSON
|
|
|
|
|
|
Date:
|
November 12, 2019
|
By:
|
|
Jamie G. Pierson
Chief Financial Officer
|
|
OBLIGORS:
HORIZON GLOBAL CORPORATION,
a Delaware corporation
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: General Counsel, Chief Compliance Officer and Corporate Secretary
|
|
HORIZON GLOBAL AMERICAS INC.,
a Delaware corporation
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: Vice President and Secretary
|
|
CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: Director
CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: Vice President and Secretary
HORIZON GLOBAL COMPANY LLC,
a Delaware limited liability company
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: Vice President and Secretary
|
|
AGENT AND REQUIRED LENDERS:
BANK OF AMERICA, N.A.,
as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender
By: /s/ Kindra M. Mullarky
Name: Kindra M. Mullarky
Title: Senior Vice President
BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender
By: /s/ Sylwia Durkiewicz
Name: Sylwia Durkiewicz
Title: Vice President
BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee
By:/s/ Kindra M. Mullarky
Name: Kindra M. Mullarky
Title: Senior Vice President
|
|
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a U.S. Lender
By: /s/ Nykole Hanna
Name: Nykole Hanna
Title: Authorized Signatory
WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender
By: /s/ David G. Phillips
Name: David G. Phillips
Title: Credit Officer Canada
WELLS FARGO BANK, NATIONAL ASSOCIATION, (London branch), as a UK Lender
By: /s/ N.B. Hogg
Name: N.B. Hogg
Title: Authorized Signatory
|
|
BANK OF MONTREAL, as a U.S. Lender and a UK Lender
By: /s/ Elizabeth Mitchell
Name: Elizabeth Mitchell
Title: Vice President
BANK OF MONTREAL, Toronto Branch, as a Canadian Lender
By: /s/ Keri Stackhouse
Name: Keri Stackhouse
Title: Head Credit Structuring
|
Fiscal Quarter
|
Secured Net Leverage Ratio
|
December 31, 2020
|
6.00 to 1.00
|
March 31, 2021
|
6.00 to 1.00
|
June 30, 2021 and each fiscal quarter ending thereafter
|
5.00 to 1.00
|
|
BORROWER:
HORIZON GLOBAL CORPORATION,
a Delaware corporation
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: General Counsel, Chief Compliance Officer and Corporate Secretary
|
|
AGENT AND LENDERS:
JPMORGAN CHASE BANK, N.A.,
as Agent
By: /s/ Samir A. Hashmy
Name: Samir A. Hashmy
Title: Managing Director
|
|
|
|
Corre Opportunities Qualified Master Fund, LP, as a Lender
By: /s/ John Barrett Name: John Barrett Title: Managing Partner |
|
Corre Opportunities II Qualified Master Fund, LP, as a Lender
By: /s/ John Barrett Name: John Barrett Title: Managing Partner |
|
Corre Horizon Fund, LP, as a Lender
By: /s/ John Barrett Name: John Barrett Title: Managing Partner |
|
NEWPORT GLOBAL CREDIT FUND (MASTER) LP, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: COO |
|
NEWPORT GLOBAL OPPORTUNITIES FUND I-A LP, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: COO |
|
FIDELITY NATIONAL TITLE INSURANCE COMPANY, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: Authorized Signatory |
|
COMMONWEALTH LAND TITLE INSURANCE COMPANY, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: Authorized Signatory |
Lender
|
Term Loans
|
Corre Opportunities Qualified Master Fund, LP
|
$10,565,540.31
|
Corre Opportunities II Master Fund, LP
|
$2,841,420.31
|
Corre Horizon Fund, LP
|
$6,887,065.71
|
Newport Global Credit Fund LP
|
$196,395.97
|
Newport Global Opportunities Fund I-A LP
|
$3,257,161.24
|
Fidelity National Title Insurance Company
|
$938,684.88
|
Commonwealth Land Title Insurance Company
|
$313,731.58
|
Fiscal Quarter
|
Secured Net Leverage Ratio
|
December 31, 2020
|
6.00 to 1.00
|
March 31, 2021
|
6.00 to 1.00
|
June 30, 2021 and each fiscal quarter ending thereafter
|
5.00 to 1.00
|
|
BORROWER:
HORIZON GLOBAL CORPORATION,
a Delaware corporation
By: /s/ Jay Goldbaum
Name: Jay Goldbaum
Title: General Counsel, Chief Compliance Officer and Corporate Secretary
|
|
AGENT AND LENDERS:
CORTLAND CAPITAL MARKET SERVICES LLC,
as Agent
By: /s/ Matthew Trybula
Name: Matthew Trybula
Title: Associate Counsel
|
|
|
|
CORRE PARTNERS MANAGEMENT, L.L.C.,
as a Lender Representative
By: /s/ John Barrett Name: John Barrett Title: Managing Partner |
|
Corre Opportunities Qualified Master Fund, LP, as a Lender
By: /s/ John Barrett
Name: John Barrett
Title: Managing Partner
|
|
Corre Opportunities II Qualified Master Fund, LP, as a Lender
By: /s/ John Barrett Name: John Barrett Title: Managing Partner |
|
Corre Horizon Fund, LP, as a Lender
By: /s/ John Barrett Name: John Barrett Title: Managing Partner |
|
FIDELITY NATIONAL TITLE INSURANCE COMPANY, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: Authorized Signatory |
|
NEWPORT GLOBAL CREDIT FUND (MASTER) LP, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: COO |
|
NEWPORT GLOBAL OPPORTUNITIES FUND I-A LP, as a Lender
By: /s/ Anthony L. Longi, Jr. Name: Anthony L. Longi, Jr. Title: COO |
|
SIMON CHARITABLE PRIVATE LLC, as a Lender
By: /s/ Karen A. Vereb Name: Karen A. Vereb Title: Secretary
By: /s/ Mark A. Madeja
Name: Mark A. Madeja Title: Assistant Secretary |
|
PW FOCUS FUND LLC, as a Lender
By: Parkwood LLC, Managing Member
By: /s/ Karen A. Vereb Name: Karen A. Vereb Title: Secretary By: /s/ Mark A. Madeja Name: Mark A. Madeja Title: Vice President |
|
SIMON MARKETABLE LP, as a Lender
By: Parkwood LLC, General Partner
By: /s/ Karen A. Vereb Name: Karen A. Vereb Title: Secretary By: /s/ Mark A. Madeja Name: Mark A. Madeja Title: Vice President |
|
ULYSSES PARTNERS, LP, as a Lender
By: /s/ Joshua Nash Name: Joshua Nash LLC, a General Partner Title: Joshua Nash, its Manager |
1.
|
Severance benefits under the Severance Policy,† which severance benefits consist of the following (as further described in, and qualified by reference to, the Severance Policy):
|
◦
|
Payment of an amount equal in value to the product of (a) 1.5, multiplied by (b) the sum of (i) $630,000 (your annual base salary rate (as in effect on the Separation Date)) plus (ii) $315,000 (the value of your target short-term incentive award for the 2019 calendar year). This amount will be payable in equal installments in accordance with the Company’s payroll practices as in effect from time to time commencing on the day the Release becomes effective and ending on the last payroll date of or on behalf of the Company in the last month of the 18-month period following the Separation Date, provided that the first such payment shall include all amounts that would have been paid to you in accordance with the Company’s payroll practices if such payments had begun on the Separation Date;
|
◦
|
Payment of (a) all accrued but unpaid base salary through the Separation Date and (b) 10 days of earned but unused vacation through the Separation Date. These amounts will be payable by the next payroll date following the Separation Date;
|
◦
|
A transaction bonus amount equal to $840,752, in cash, in connection with the Company’s sale of its Asia-Pacific business segment, payable on the day the Release becomes effective;
|
◦
|
If you timely elect to continue group health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and subject to the Company’s COBRA policies, the Company or its appropriate affiliate will reimburse you for the employer’s portion of premiums for continued group health coverage under COBRA until the earliest of (a) the termination of your COBRA period, (b) 18 months after the Separation Date, or (c) the date you become eligible to receive any medical benefits under any plan or program of any other employer. You will be responsible for payment of the COBRA premium and will be reimbursed by the Company or its appropriate affiliate for the portion of the premium that the Company or its appropriate affiliate would have paid for group health coverage if you had continued to be an employee of the Company or its appropriate affiliate. In the event that your COBRA period expires before the date that is 18 months after the Separation Date, the Company or its appropriate affiliate will pay you a monthly amount equal to the monthly contribution that the Company or its appropriate affiliate would have paid for your coverage under the applicable group health plan of the Company or its appropriate affiliate if you had continued as an employee of the Company or its appropriate affiliate until the earlier of (x) 18 months after the Separation Date or (y) the date on which you become eligible to receive any medical benefits under any plan or program of any other employer; and
|
◦
|
Executive-level outplacement services until the earlier of (a) 12 months following the Separation Date or (b) the date on which you become employed by a subsequent employer.
|
◦
|
Treatment of outstanding Equity Plan awards as follows, subject in all cases to the applicable terms and provisions of the Equity Plan, the related award agreements and the Severance Policy:
|
▪
|
Each of your unvested awards that are outstanding under the Equity Plan, other than equity awards and cash incentive awards that are subject to vesting upon the attainment of performance goals, shall vest in an amount equal to (a) the product of (i) the total number of shares subject to such award and (ii) a fraction, the numerator of which is equal to the number of whole calendar months that have elapsed from the grant date of the applicable award to the Separation Date and the denominator of which is equal to the full number of calendar months in the vesting period of such award, less (b) the number of shares that had already become vested as of the Separation Date in respect of such award. As a result, the following portions of the following awards granted to you under the Equity Plan will vest as of the Separation Date:
|
•
|
March 1, 2018 Restricted Stock Units Grant: 12,810 RSUs
|
•
|
March 19, 2019 Restricted Stock Units Grant: 19,444 RSUs
|
•
|
June 6, 2019 Restricted Stock Units Grant: 11,648 RSUs
|
▪
|
Notwithstanding the foregoing, each equity award and cash incentive award granted under the Equity Plan that is subject to vesting upon the attainment of performance goals shall become payable in an amount equal to (a) the product of (i) the total number of shares or amount of cash, as applicable, that is earned with respect to such award at the end of the applicable performance period based on actual performance in accordance with the terms of the governing arrangements under which such performance-based award was granted and, (ii) a fraction, the numerator of which is equal to the number of whole calendar months that have elapsed from the grant date of the applicable award to the Separation Date and the denominator of which is the full number of calendar months in the vesting period of such award, less (b) the number of shares or amount of cash that had already become vested as of the Separation Date in respect of such award. Awards that vest as described in this paragraph will be settled at the time when such awards are settled under the applicable terms of the Equity Plan for individuals who remain employed through the end of the applicable performance period.
|
Grant Date
|
Original Target PSUs
|
Pro-Rated Target PSUs
|
March 19, 2019
|
100,000
|
19,444
|
June 6, 2019
|
96,096
|
11,648
|
2.
|
Accrued vested benefits under any other benefit plans, programs or arrangements of the Company or its appropriate affiliate (including any vested benefits under the Company’s qualified and nonqualified retirement plans), subject to the terms of such plans, programs or arrangements.
|
3.
|
With respect to each equity award referenced above, all applicable withholding requirements with respect thereto shall be satisfied by retention by the Company of a portion of the shares otherwise deliverable to you thereunder, with the shares so retained credited against such withholding requirement at the market value of such shares on the date of such delivery, provided that in no event will the market value of the shares to be so withheld exceed the minimum amount of taxes required to be withheld.
|
(a)
|
A percentage of the PSUs from ____% to ____% shall be earned (such portion, the “Earned PSUs”) to the extent that the performance goals described in the Statement of Performance Goals for these PSUs (the “_________Performance Goals”) are achieved for the period commencing on _____________ and ending on _______________ (the “Performance Period”), once determined and certified by the Committee in its sole discretion. The Earned PSUs shall become nonforfeitable and payable to the Grantee (“Vested,” or similar terms), if at all, in three substantially equal installments on each of the first three anniversaries of the Date of Grant (the period commencing on the Date of Grant and ending on the third anniversary of the Date of Grant, the “Vesting Period”), subject to the Grantee remaining in continuous employment with the Company or a Subsidiary through each such anniversary. Any PSUs that do not so Vest will be forfeited, including, except as provided in Section 5(b) or Section 5(c) below, if the Grantee ceases to be continuously employed by the Company or a Subsidiary prior to the end of the Vesting Period. For purposes of this Agreement, “continuously employed” (or substantially similar terms) means the absence of any interruption or termination of the Grantee’s employment with the Company or a Subsidiary. Continuous employment shall not be considered interrupted or terminated in the case of transfers between locations of the Company and its Subsidiaries.
|
(b)
|
Notwithstanding Section 5(a) above, the PSUs shall be earned and Vest (to the extent the PSUs have not previously Vested) and be paid pursuant to Section 6 hereof upon the occurrence of any of the following events at a time when the PSUs have not been forfeited in the following manner:
|
(i)
|
If the Grantee should die or become Disabled prior to the end of the Vesting Period while the Grantee is continuously employed by the Company or any of its Subsidiaries, the Grantee shall earn and Vest in the number of PSUs which the Grantee would have earned and Vested in in accordance with the terms and conditions of this Section 5 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Vesting Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first; or
|
(ii)
|
in the event of a Change in Control that occurs prior to the end of the Vesting Period, the PSUs shall be earned and Vest in accordance with Section 5(c) below.
|
(c)
|
|
(i)
|
Notwithstanding Section 5(a) above, if at any time before the end of the Vesting Period or forfeiture of the PSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then the PSUs will be earned and Vest (except to the extent that a Replacement Award is provided to the Grantee in accordance with Section 5(c)(ii) to continue, replace or assume the PSUs covered by this Agreement (the “Replaced Award”)) as follows: the Performance Period and the Vesting Period will terminate and the Committee as constituted immediately before the Change in Control will determine and certify the Earned PSUs based on actual performance through the most recent date prior to the Change in Control for which achievement of the ________ Performance Goals can reasonably be determined, and such Earned PSUs shall be 100% Vested. PSUs that are earned and Vest in accordance with this Section 5(c)(i) will be paid as provided for in Section 6 of this Agreement.
|
(ii)
|
For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g., performance-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Section 5(c)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
|
(iii)
|
If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company or a Subsidiary (or any of their successors) (as
|
(iv)
|
If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding PSUs that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be earned and Vested at the time of such Change in Control and will be paid as provided for in Section 6 of this Agreement.
|
(d)
|
For purposes of this Agreement, the following definitions apply:
|
(i)
|
“Good Reason” shall mean (A) a material and permanent diminution in the Grantee’s duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Company; or (C) a permanent reassignment of the Grantee to another primary office more than 50 miles from the current office location. The Grantee must notify the Company of the Grantee’s intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event, provide the Company 30 days’ opportunity for cure, and terminate employment within two years following the initial existence of such event, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.
|
(ii)
|
“Cause” shall mean (A) the Grantee’s conviction of or plea of guilty or nolo contendere to a crime constituting a felony under the laws of the United States or any State thereof or any other jurisdiction in which the Company or its Subsidiaries conduct business; (B) the Grantee’s willful misconduct in the performance of the Grantee’s duties to the Company or its Subsidiaries and failure to cure such breach within thirty days following written notice thereof from the Company; (C) the Grantee’s willful failure or refusal to follow directions from the Board (or direct reporting executive) and failure to cure such breach within thirty days following written notice thereof from the Board; or (D) the Grantee’s breach of fiduciary duty to the Company or its Subsidiaries for personal profit. Any failure by the Company or a Subsidiary to notify the Grantee after the first occurrence of an event constituting Cause shall not preclude any subsequent occurrences of such event (or a similar event) from constituting Cause. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement prevents the Grantee from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity the Grantee is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.
|
(iii)
|
“Disabled” shall mean (A) the Grantee is unable to engage in any substantial gainful activity due to medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, or (B) due to any medically determinable physical or mental impairment expected to result in death or last for a continuous period not less than 12 months, the Grantee has received
|
(e)
|
Any PSUs that have not Vested pursuant to Section 5 by the end of the Vesting Period will be forfeited automatically and without further notice after the end of the Vesting Period (or earlier if, and on such date that, Grantee ceases to be an employee of the Company or a Subsidiary prior to the end of the Vesting Period for any reason other than as described in this Section 5).
|
(a)
|
Payment for the PSUs, after and to the extent they have become earned and Vested, shall be made in the form of Common Shares. Except as provided in Section 6(b), payment shall be made as soon as administratively practical following (but in no event later than thirty (30) days following) the end of the Vesting Period.
|
(b)
|
Notwithstanding Section 6(a), to the extent that the PSUs are earned and Vested on the date of a Change in Control, Grantee will receive payment for Vested PSUs in Common Shares on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, the Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Section 6(a).
|
(c)
|
Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.
|
(d)
|
The Company’s obligations to the Grantee with respect to the PSUs will be satisfied in full upon the issuance of Common Shares corresponding to such PSUs.
|
(a)
|
The Grantee shall have no rights of ownership in the Common Shares underlying the PSUs and no right to vote the Common Shares underlying the PSUs until the date on which the Common Shares underlying the PSUs are issued or transferred to the Grantee pursuant to Section 6 above.
|
(b)
|
From and after the Date of Grant and until the earlier of (i) the time when the PSUs are paid in accordance with Section 6 hereof or (ii) the time when the Grantee’s right to receive Common Shares in payment of the PSUs is forfeited in accordance with Section 5 hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Shares generally, the Grantee shall be credited with cash per PSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including earning, Vesting, payment and forfeitability) as apply to the PSUs based on which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the PSUs to which they relate.
|
(c)
|
The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Common Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
|
1.
|
Definitions. For purposes hereof:
|
a.
|
“Beginning Stock Price” means the closing price of a Common Share on the principal stock exchange on which the Common Shares are then traded on ________________.
|
b.
|
“Ending Stock Price” means the average closing price of a Common Share on the principal stock exchange on which the Common Shares are then traded for the last 30 trading days of the Performance Period.
|
2.
|
PSU Performance Matrix. From ___% to ___% of the PSUs will be earned based on absolute Common Shares price performance during the Performance Period as follows:
|
3.
|
Number of PSUs Earned. Following the Performance Period, the Committee shall determine whether and to what extent the ___________ Performance Goals have been satisfied for the Performance Period and shall determine the number of PSUs that shall become Earned PSUs hereunder and under the Agreement on the basis of the following:
|
a.
|
Below Threshold I. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is less than $_______, as set forth in the Performance Matrix, then ___% of the PSUs shall become Earned PSUs.
|
b.
|
Threshold I. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is equal to $_____, as set forth in the Performance Matrix, then ____% of the PSUs shall become Earned PSUs.
|
c.
|
Between Threshold I and Threshold II. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is greater than $_____ but less than $______, a percentage between ____% and ____% (determined on the basis of straight-line mathematical interpolation) of the PSUs (rounded up to the nearest whole number of PSUs) shall become Earned PSUs.
|
d.
|
Threshold II. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is equal to $_____, as set forth in the Performance Matrix, then _____% of the PSUs shall become Earned PSUs.
|
e.
|
Between Threshold II and Threshold III. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is greater than $______ but less than $______, a percentage between ____% and ____% (determined on the basis of straight-line mathematical interpolation) of the PSUs (rounded up to the nearest whole number of PSUs) shall become Earned PSUs.
|
f.
|
Threshold III. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is equal to $______, as set forth in the Performance Matrix, then _____% of the PSUs shall become Earned PSUs.
|
g.
|
Between Threshold III and Maximum. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is greater than $______ but less than $______, a percentage between _____% and _____% (determined on the basis of straight-line mathematical interpolation) of the PSUs (rounded up to the nearest whole number of PSUs) shall become Earned PSUs.
|
h.
|
Equals or Exceeds Maximum. If, upon the conclusion of the Performance Period, the Ending Stock Price minus the Beginning Stock Price is equal to or greater than $______, as set forth in the Performance Matrix, then ____% of the PSUs shall become Earned PSUs.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ TERRENCE G. GOHL
|
|
Terrence G. Gohl
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ JAMIE G. PIERSON
|
|
Jamie G. Pierson
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ TERRENCE G. GOHL
|
|
Terrence G. Gohl
Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ JAMIE G. PIERSON
|
|
Jamie G. Pierson
Chief Financial Officer
|