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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)    
☒

 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2021
or
☐

 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from                  to                  .
Commission file number 001-37427
HORIZON GLOBAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
 
47-3574483
(IRS Employer
Identification No.)
47912 Halyard Drive, Suite 100
Plymouth, Michigan 48170
(Address of principal executive offices, including zip code)
(734) 656-3000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x    No o.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
Accelerated filer o
Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒
As of July 30, 2021, the number of outstanding shares of the Registrant’s common stock was 27,286,647 shares.


HORIZON GLOBAL CORPORATION
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53

1

Forward-Looking Statements
This Quarterly Report on Form 10-Q may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made and give our current expectations or forecasts of future events. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to, risks and uncertainties with respect to: the impact of the COVID-19 pandemic on the Company’s business, results of operations, financial condition and liquidity, including, without limitation, supply chain and logistics issues; liabilities and restrictions imposed by the Company’s debt instruments, including the Company’s ability to comply with the applicable financial covenants related thereto; market demand; competitive factors; supply constraints and shipping disruptions; material, logistics and energy costs, including the increased material costs resulting from the COVID-19 pandemic; technology factors; litigation; government and regulatory actions including the impact of any tariffs, quotas, or surcharges; the Company’s accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company’s business and industry; the success of the Company’s action plan, including the actual amount of savings and timing thereof; the success of the Company’s business improvement initiatives in Europe-Africa, including the amount of savings and timing thereof; the Company’s exposure to product liability claims from customers and end users, and the costs associated therewith; factors affecting the Company’s business that are outside of its control, including natural disasters, pandemics, including the current COVID-19 pandemic, accidents and governmental actions; and other risks that are discussed in Part I, Item 1A, “Risk Factors.” in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.
The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events, except as otherwise required by law.
We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.

2

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements
HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited—dollars in thousands)
June 30, 2021 December 31, 2020
Assets
Current assets:
Cash and cash equivalents $ 24,680  $ 44,970 
Restricted cash 5,510  5,720 
Receivables, net 116,240  87,420 
Inventories 144,360  115,320 
Prepaid expenses and other current assets 12,100  11,510 
Total current assets 302,890  264,940 
Property and equipment, net 73,520  74,090 
Operating lease right-of-use assets 40,400  47,310 
Goodwill —  3,360 
Other intangibles, net 54,890  58,230 
Deferred income taxes 1,280  1,280 
Other assets 6,410  7,280 
Total assets $ 479,390  $ 456,490 
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings and current maturities, long-term debt $ 11,990  $ 14,120 
Accounts payable 111,940  99,520 
Short-term operating lease liabilities 11,130  12,180 
Accrued liabilities 59,750  59,100 
Total current liabilities 194,810  184,920 
Gross long-term debt 284,040  251,960 
Unamortized debt issuance costs and discount (31,460) (20,570)
Long-term debt 252,580  231,390 
Deferred income taxes 4,080  3,130 
Long-term operating lease liabilities 39,410  46,340 
Other long-term liabilities 11,000  14,560 
Total liabilities 501,880  480,340 
Contingencies (See Note 10)
Shareholders' equity:
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None
—  — 
Common stock, $0.01 par: Authorized 400,000,000 shares; 27,970,998 shares issued and 27,284,492 outstanding at June 30, 2021, and 27,089,673 shares issued and 26,403,167 outstanding at December 31, 2020
270  260 
Common stock warrants issued, outstanding and exercisable for 9,231,146 and 5,815,039 shares of common stock at June 30, 2021 and December 31, 2020, respectively
25,010  9,510 
Paid-in capital 169,070  166,610 
Treasury stock, at cost: 686,506 shares at June 30, 2021 and December 31, 2020
(10,000) (10,000)
Accumulated deficit (192,050) (178,530)
Accumulated other comprehensive loss (8,960) (6,540)
Total Horizon Global shareholders' deficit (16,660) (18,690)
Noncontrolling interest (5,830) (5,160)
Total shareholders' deficit (22,490) (23,850)
Total liabilities and shareholders' equity $ 479,390  $ 456,490 

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited—dollars in thousands, except share and per share data)
  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
Net sales $ 222,120  $ 120,490  $ 421,310  $ 283,740 
Cost of sales (174,830) (102,440) (333,460) (239,440)
Gross profit 47,290  18,050  87,850  44,300 
Selling, general and administrative expenses (35,960) (26,020) (69,740) (58,950)
Operating profit (loss) 11,330  (7,970) 18,110  (14,650)
Other expense, net (1,990) (450) (4,220) (2,120)
Loss on debt extinguishment —  —  (11,650) — 
Interest expense (6,980) (8,220) (14,030) (16,410)
Income (loss) from continuing operations before income tax 2,360  (16,640) (11,790) (33,180)
Income tax expense (1,400) (80) (2,400) (70)
Net income (loss) from continuing operations 960  (16,720) (14,190) (33,250)
Loss from discontinued operations, net of income tax —  —  —  (500)
Net income (loss) 960  (16,720) (14,190) (33,750)
Less: Net loss attributable to noncontrolling interest (330) (380) (670) (670)
Net income (loss) attributable to Horizon Global $ 1,290  $ (16,340) $ (13,520) $ (33,080)
Net income (loss) per share attributable to Horizon Global:
Basic:
Continuing operations $ 0.05  $ (0.64) $ (0.50) $ (1.28)
Discontinued operations —  —  —  (0.02)
Total $ 0.05  $ (0.64) $ (0.50) $ (1.30)
Diluted:
Continuing operations $ 0.04  $ (0.64) $ (0.50) $ (1.28)
Discontinued operations —  —  —  (0.02)
Total $ 0.04  $ (0.64) $ (0.50) $ (1.30)
Weighted average common shares outstanding:
Basic 27,022,652  25,618,793  26,883,818  25,509,794 
Diluted 32,747,203  25,618,793  26,883,818  25,509,794 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited—dollars in thousands)
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Net income (loss) $ 960  $ (16,720) $ (14,190) $ (33,750)
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other (130) 2,040  (2,420) (2,300)
Total other comprehensive (loss) income, net of tax (130) 2,040  (2,420) (2,300)
Total comprehensive income (loss) 830  (14,680) (16,610) (36,050)
Less: Comprehensive loss attributable to noncontrolling interest (330) (380) (670) (670)
Comprehensive income (loss) attributable to Horizon Global $ 1,160  $ (14,300) $ (15,940) $ (35,380)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited—dollars in thousands)
Six Months Ended June 30,
2021 2020
Cash Flows from Operating Activities:
Net loss $ (14,190) $ (33,750)
Less: Net loss from discontinued operations —  (500)
Net loss from continuing operations (14,190) (33,250)
Adjustments to reconcile net loss from continuing operations to net cash (used for) provided by operating activities:
Depreciation 7,750  7,100 
Amortization of intangible assets 2,970  3,430 
Loss on debt extinguishment 11,650  — 
Amortization of original issuance discount and debt issuance costs 5,400  8,100 
Deferred income taxes 1,120  10 
Non-cash compensation expense 1,710  1,320 
Paid-in-kind interest 650  3,660 
Increase in receivables (30,630) (16,780)
(Increase) decrease in inventories (31,350) 19,270 
Increase in prepaid expenses and other assets (440) (2,890)
Increase in accounts payable and accrued liabilities 15,960  13,460 
Other, net 1,780  1,470 
Net cash (used for) provided by operating activities for continuing operations (27,620) 4,900 
Cash Flows from Investing Activities:
Capital expenditures (9,940) (5,450)
Other, net 10  70 
Net cash used for investing activities for continuing operations (9,930) (5,380)
Cash Flows from Financing Activities:
Proceeds from borrowings on credit facilities 2,190  6,290 
Repayments of borrowings on credit facilities (1,300) (1,210)
Proceeds from Senior Term Loan, net of issuance costs 75,300  — 
Repayments of borrowings on Replacement Term Loan, including transaction fees (94,940) — 
Proceeds from Revolving Credit Facility, net of issuance costs 20,000  54,680 
Repayments of borrowings on Revolving Credit Facility —  (19,180)
Proceeds from ABL revolving debt, net of issuance costs —  8,000 
Repayments of borrowings on ABL revolving debt —  (27,920)
Proceeds from Paycheck Protection Program Loan —  8,670 
Proceeds from issuance of common stock warrants 16,300  — 
Proceeds from exercise of common stock warrants 420  — 
Other, net (640) (10)
Net cash provided by financing activities for continuing operations 17,330  29,320 
Discontinued Operations:
Net cash used for discontinued operations —  (500)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (280) (110)
Cash, Cash Equivalents and Restricted Cash:
(Decrease) increase for the period (20,500) 28,230 
At beginning of period 50,690  11,770 
At end of period $ 30,190  $ 40,000 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 10,860  $ 4,370 
Cash paid for taxes, net of refunds $ 1,430  $ 440 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(unaudited—dollars in thousands)
Common Stock Common Stock Warrants Paid-in Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive (Loss) Total Horizon Global Shareholders' Equity (Deficit) Noncontrolling Interest Total Shareholders' Equity (Deficit)
Balances at January 1, 2021 $ 260  $ 9,510  $ 166,610  $ (10,000) $ (178,530) $ (6,540) $ (18,690) $ (5,160) $ (23,850)
Net loss —  —  —  —  (14,810) —  (14,810) (340) (15,150)
Other comprehensive loss, net of tax —  —  —  —  —  (2,290) (2,290) —  (2,290)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations —  —  (650) —  —  —  (650) —  (650)
Non-cash compensation expense —  —  960  —  —  —  960  —  960 
Issuance of common stock warrants —  16,300  —  —  —  —  16,300  —  16,300 
Exercise of common stock warrants 10  (800) 1,210  —  —  —  420  —  420 
Balances at March 31, 2021 270  25,010  168,130  (10,000) (193,340) (8,830) (18,760) (5,500) (24,260)
Net income (loss) —  —  —  —  1,290  —  1,290  (330) 960 
Other comprehensive loss, net of tax —  —  —  —  —  (130) (130) —  (130)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations —  —  10  —  —  —  10  —  10 
Non-cash compensation expense —  —  930  —  —  —  930  —  930 
Balances at June 30, 2021 $ 270  $ 25,010  $ 169,070  $ (10,000) $ (192,050) $ (8,960) $ (16,660) $ (5,830) $ (22,490)

Common Stock Common Stock Warrants Paid-in Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Total Horizon Global Shareholders' Equity (Deficit) Noncontrolling Interest Total Shareholders' Equity (Deficit)
Balances at January 1, 2020 $ 250  $ 10,610  $ 163,240  $ (10,000) $ (141,970) $ (9,790) $ 12,340  $ (3,740) $ 8,600 
Net loss —  —  —  —  (16,740) —  (16,740) (290) (17,030)
Other comprehensive loss, net of tax —  —  —  —  —  (4,340) (4,340) —  (4,340)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations —  —  (60) —  —  —  (60) —  (60)
Non-cash compensation expense —  —  420  —  —  —  420  —  420 
Balances at March 31, 2020 250  10,610  163,600  (10,000) (158,710) (14,130) (8,380) (4,030) (12,410)
Net loss —  —  —  —  (16,340) —  (16,340) (380) (16,720)
Other comprehensive income, net of tax —  —  —  —  —  2,040  2,040  —  2,040 
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations —  —  50  —  —  —  50  —  50 
Non-cash compensation expense —  —  900  —  —  —  900  —  900 
Balances at June 30, 2020 $ 250  $ 10,610  $ 164,550  $ (10,000) $ (175,050) $ (12,090) $ (21,730) $ (4,410) $ (26,140)

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Operations and Basis of Presentation
Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global,” “we,” or the “Company”) are a leading designer, manufacturer and distributor of a wide variety of high quality, custom-engineered towing, trailering, cargo management and other related accessory products, primarily in the North American, European and African markets. These products are designed to support aftermarket, automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment servicers (“automotive OESs”) (collectively, “OEs”), retail, e-commerce and industrial customers within the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets. The Company groups its business into operating segments generally by the region in which sales and manufacturing efforts are focused. The Company’s operating segments are Horizon Americas and Horizon Europe-Africa. See Note 14, Segment Information, for further information on each of the Company’s operating segments.
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. It is management’s opinion that these condensed consolidated financial statements contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of financial position and results of operations. Results of operations for interim periods are not necessarily indicative of results for the full year.
U.S. GAAP requires the Company to make certain estimates, judgments, and assumptions. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, sales incentives, sales returns, impairment assessment of indefinite-lived intangible assets, recoverability of long-lived assets, income taxes (including deferred taxes and uncertain tax positions), share-based compensation, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, and depreciation and amortization, are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.
8

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. New Accounting Pronouncements
New accounting pronouncements not yet adopted
In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2021-04”). ASU 2021-04 provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of other accounting standards. Under this guidance, an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. ASU 2021-04 provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2021, with early adoption permitted. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and Other Options,” (“ASC 470-20”) for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for as paid-in capital. For smaller reporting companies, ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2023, with early adoption permitted for fiscal years beginning after December 15, 2020. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for (or recognize the effects of) reference rate reform on financial reporting. The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform initiatives being undertaken in an effort to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The optional amendments of this guidance are effective for all entities upon adoption. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaces the current incurred loss model guidance with a new method that reflects expected credit losses. Under this guidance, an entity would recognize an allowance for credit losses equal to its estimate of expected credit losses on financial assets measured at amortized cost. In November 2019, the FASB extended the effective date of ASU 2016-13 for smaller reporting companies. As a result, ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.
Accounting pronouncements recently adopted
There were no new accounting pronouncements adopted during the six months ended June 30, 2021.
3. Revenues
The Company disaggregates net sales from contracts with customers by major sales channel. The Company determined that disaggregating its net sales into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The automotive OEM channel represents sales to automotive vehicle manufacturers. The automotive OES channel primarily represents sales to automotive vehicle dealerships. The aftermarket channel represents sales to automotive installers and warehouse distributors. The retail channel represents sales to direct-to-consumer retailers. The e-commerce channel represents sales to retailers whose customers utilize the Internet to purchase the Company’s products. The industrial channel represents sales to non-automotive manufacturers and dealers of agricultural equipment, trailers, and other custom assemblies. The other channel represents sales that do not fit into a category described above and these sales are considered ancillary to the Company’s core operating activities.
9

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company’s net sales by segment and disaggregated by major sales channel are as follows:
Three Months Ended June 30, 2021
Horizon Americas Horizon Europe-Africa Total
(dollars in thousands)
Net Sales
Aftermarket $ 40,560  $ 26,130  $ 66,690 
Automotive OEM 22,650  44,190  66,840 
Automotive OES 4,240  19,970  24,210 
Retail 32,610  —  32,610 
E-commerce 19,730  1,960  21,690 
Industrial 8,590  630  9,220 
Other —  860  860 
Total $ 128,380  $ 93,740  $ 222,120 
Three Months Ended June 30, 2020
Horizon Americas Horizon Europe-Africa Total
(dollars in thousands)
Net Sales
Aftermarket $ 22,280  $ 16,680  $ 38,960 
Automotive OEM 9,510  20,620  30,130 
Automotive OES 1,080  7,720  8,800 
Retail 22,830  —  22,830 
E-commerce 13,370  230  13,600 
Industrial 5,040  340  5,380 
Other 10  780  790 
Total $ 74,120  $ 46,370  $ 120,490 
Six Months Ended June 30, 2021
Horizon Americas Horizon Europe-Africa Total
(dollars in thousands)
Net Sales
Aftermarket $ 72,250  $ 48,550  $ 120,800 
Automotive OEM 50,170  92,750  142,920 
Automotive OES 8,100  36,030  44,130 
Retail 55,190  —  55,190 
E-commerce 34,250  3,390  37,640 
Industrial 18,250  1,180  19,430 
Other —  1,200  1,200 
Total $ 238,210  $ 183,100  $ 421,310 

10

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Six Months Ended June 30, 2020
Horizon Americas Horizon
Europe-Africa 		Total
(dollars in thousands)
Net Sales
Aftermarket $ 49,050  $ 32,390  $ 81,440 
Automotive OEM 29,870  62,020  91,890 
Automotive OES 2,350  20,180  22,530 
Retail 46,400  —  46,400 
E-commerce 25,880  660  26,540 
Industrial 12,890  660  13,550 
Other 50  1,340  1,390 
Total $ 166,490  $ 117,250  $ 283,740 

4. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill are as follows:
Horizon Americas Horizon Europe-Africa Total
(dollars in thousands)
Balance at January 1, 2021 $ 3,360  $ —  $ 3,360 
Divestiture of business (3,340) —  (3,340)
Foreign currency translation (20) —  (20)
Balance at June 30, 2021 $ —  $ —  $ — 
Brazil Sale
On June 8, 2021, the Company divested its Brazil business via a share sale (the “Brazil Sale”). Under the terms of the Brazil Sale, the Company disposed all assets and liabilities of its Brazil business, including $3.3 million of goodwill within the Horizon Americas operating segment, for nominal consideration. As a result of the Brazil Sale, the Company recorded a $2.2 million loss in other expense, net in the accompanying condensed consolidated statements of operations.
The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows:
June 30, 2021
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)
$ 163,860  $ (135,960) $ 27,900 
Technology and other (3 – 15 years)
23,000  (17,300) 5,700 
Trademark/Trade names (1 – 8 years)
150  (150) — 
Sub-total 187,010  (153,410) 33,600 
Trademark/Trade names, indefinite-lived 21,290  —  21,290 
Total $ 208,300  $ (153,410) $ 54,890 

11

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2020
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)
$ 166,420  $ (135,140) $ 31,280 
Technology and other (3 – 15 years)
22,250  (16,710) 5,540 
Trademark/Trade names (1 – 8 years)
150  (150) — 
Sub-total 188,820  (152,000) 36,820 
Trademark/Trade names, indefinite-lived 21,410  —  21,410 
Total $ 210,230  $ (152,000) $ 58,230 

Amortization expense related to other intangible assets is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Technology and other, included in cost of sales $ 580  $ 550  $ 780  $ 670 
Customer relationships, included in selling, general and administrative expenses 1,090  1,310  2,190  2,760 
Total $ 1,670  $ 1,860  $ 2,970  $ 3,430 

5. Inventories
Inventories consist of the following components:
  June 30,
2021 		December 31,
2020
  (dollars in thousands)
Finished goods $ 72,680  $ 58,600 
Work in process 16,170  13,070 
Raw materials 55,510  43,650 
Total $ 144,360  $ 115,320 

12

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Property and Equipment, Net
Property and equipment, net consists of the following components:
  June 30,
2021 		December 31,
2020
  (dollars in thousands)
Land and land improvements $ 500  $ 520 
Buildings 23,010  23,040 
Machinery and equipment 140,110  134,750 
Gross property and equipment 163,620  158,310 
Accumulated depreciation (90,100) (84,220)
Total $ 73,520  $ 74,090 

Depreciation expense is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Depreciation expense, included in cost of sales $ 3,270  $ 3,260  $ 7,130  $ 6,410 
Depreciation expense, included in selling, general and administrative expenses 280  350  620  690 
Total $ 3,550  $ 3,610  $ 7,750  $ 7,100 

13

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Accrued and Other Long-term Liabilities
Accrued liabilities consist of the following components:
June 30,
2021 		December 31,
2020
(dollars in thousands)
Customer incentives $ 17,140  $ 15,870 
Accrued compensation 12,370  12,130 
Short-term tax liabilities 6,640  5,570 
Customer claims 3,680  6,520 
Accrued professional services 2,070  1,510 
Litigation settlements 1,100  1,600 
Restructuring 120  650 
Deferred purchase price —  1,370 
Other 16,630  13,880 
Total $ 59,750  $ 59,100 
Other long-term liabilities consist of the following components:
  June 30,
2021 		December 31,
2020
  (dollars in thousands)
Litigation settlements $ 2,370  $ 2,930 
Long-term tax liabilities 380  130 
Deferred purchase price —  1,650 
Restructuring —  1,070 
Other 8,250  8,780 
Total $ 11,000  $ 14,560 
14

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Long-term Debt
The Company’s long-term debt consists of the following components:
  June 30,
2021 		December 31,
2020
  (dollars in thousands)
Revolving Credit Facility $ 44,230  $ 24,230 
Senior Term Loan 100,000  — 
Replacement Term Loan —  90,210 
Convertible Notes 125,000  125,000 
Paycheck Protection Program Loan 8,670  8,670 
Bank facilities, capital leases and other long-term debt 18,130  17,970 
Gross debt 296,030  266,080 
Less:
Short-term borrowings and current maturities, long-term debt 11,990  14,120 
Gross long-term debt 284,040  251,960 
Less:
Unamortized debt issuance costs and original issuance discount on Senior Term Loan 23,550  — 
Unamortized debt issuance costs and original issuance discount on Replacement Term Loan —  9,100 
Unamortized debt issuance costs and discount on Convertible Notes 7,910  11,470 
Unamortized debt issuance costs and discount 31,460  20,570 
Total $ 252,580  $ 231,390 
ABL Facility
In December 2015, the Company entered into an Amended and Restated Loan Agreement with certain subsidiaries of the Company party thereto as guarantors, the lenders party thereto and Bank of America, N.A., as agent for the lenders, under which the lenders party thereto agreed to provide the Company and certain of its subsidiaries with a committed asset-based revolving credit facility (the “ABL Facility”) providing for revolving loans. The Amended and Restated Loan Agreement was subsequently amended on several occasions and as a result, the effective facility size was $80.0 million.
In March 2020, the Company paid in full all outstanding debt incurred under the ABL Facility, which the Company accounted for as a debt extinguishment in accordance with guidance in ASC 405-20, “Extinguishment of Liabilities”. As a result of the debt extinguishment, during the six months ended June 30, 2020, the Company recognized $0.8 million of unamortized debt issuance costs in interest expense and $0.6 million of additional costs in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50, “Modifications and Extinguishments” (“ASC 470-50”).
During the three and six months ended June 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and six months ended June 30, 2020, the Company recognized no amortization of debt issuance costs and $0.4 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.
Revolving Credit Facility
In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers (the “ABL Borrowers”). The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of $75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million.
15

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In May 2020, the Company entered into amendments, limited waivers and consents in connection with the Loan Agreement, with an effective date of April 1, 2020, that, among other things, consented to the Company’s applying for, obtaining and incurring the PPP Loan and French Loan, each as defined and described below.
In February 2021, the Company entered into a limited consent of the Loan Agreement, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement, as defined and described below.
On April 19, 2021, the Company entered into an amendment to the Loan Agreement, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility from $75.0 million to $85.0 million. The amendment also increased sub-limits relating to the Company’s ability to borrow against in-transit inventory as well as inventory located in the Company’s Mexico facilities.
The interest on the loans under the Loan Agreement is payable in cash at the interest rate of LIBOR plus 4.00% per annum, subject to a 1.00% LIBOR floor, provided that if for any reason the loans are converted to base rate loans, interest will be paid in cash at the customary base rate plus a margin of 3.00% per annum. All interest, fees, and other monetary obligations due may, at Encina’s discretion, but upon prior notice to the ABL Borrowers, be charged to the loan account and thereafter be deemed to be part of the Revolving Credit Facility subject to the same interest rate. There are no amortization payments required under the Loan Agreement. All outstanding borrowings under the Loan Agreement mature on March 13, 2023.
All of the indebtedness under the Loan Agreement is and will be guaranteed by the Company and certain of the Company’s existing and future North American subsidiaries and is and will be secured by substantially all of the assets of the Company, such other guarantors, and the ABL Borrowers.
The Loan Agreement also contains a financial covenant that stipulates the ABL Borrowers and guarantors under the Loan Agreement will not make capital expenditures exceeding $30.0 million during any fiscal year.
Debt issuance costs of $2.3 million were incurred in connection with the Loan Agreement. These debt issuance costs will be amortized into interest expense over the contractual term of the Loan Agreement.
During the three and six months ended June 30, 2021, the Company recognized $0.1 million and $0.3 million of amortization of debt issuance costs, respectively, and during the three and six months ended June 30, 2020, the Company recognized $0.5 million and $0.7 million of amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.
As of June 30, 2021 and December 31, 2020, there was $1.0 million and $1.1 million, respectively, of unamortized debt issuance costs included in other assets in the accompanying condensed consolidated balance sheets.
As of June 30, 2021 and December 31, 2020, there was $44.2 million and $24.2 million outstanding, respectively, under the Revolving Credit Facility with a weighted average interest rate of 5.3% and 5.0%, respectively. As of June 30, 2021 and December 31, 2020, the Company had $37.3 million and $38.4 million of availability, respectively, under the Revolving Credit Facility.
As of June 30, 2021 and December 31, 2020, the Company had $1.8 million and $3.1 million, respectively, of letters of credit issued and outstanding, under the Revolving Credit Facility with no cash collateral requirement. As of June 30, 2021 and December 31, 2020, respectively, the Company also had $4.4 million and $4.9 million of other letters of credit issued and outstanding, under the Revolving Credit Facility with a cash collateral requirement. The cash collateral requirement is 105% of the outstanding letters of credit. As of June 30, 2021 and December 31, 2020, the Company had cash collateral, of $4.9 million and $5.1 million, respectively. Cash collateral is presented in restricted cash in the accompanying condensed consolidated balance sheets.
First Lien Term Loan Agreement
In June 2015, the Company entered into a credit agreement among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A. (the “Term Loan Agreement”) under which the Company borrowed an aggregate of $200.0 million (the “Original Term B Loan”). The Term Loan Agreement was subsequently amended and restated on several occasions and is collectively referred to as the “First Lien Term Loan Agreement”. The Original Term B Loan was also subsequently amended on several occasions and is collectively referred to as the “First Lien Term Loan”.
In May 2020, the Company entered into an amendment, limited waiver and consent to credit agreement with an effective date of April 1, 2020, to amend the First Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan and French Loan, each as defined and described below.
16

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest was replaced by the Replacement Term Loan, as defined and described below.
During the three and six months ended June 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and six months ended June 30, 2020, the Company recognized $0.1 million and $0.2 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.
During the three and six months ended June 30, 2021, the Company recognized no paid-in-kind (“PIK”) interest and during the three and six months ended June 30, 2020, the Company recognized $0.2 million and $0.4 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations.
Second Lien Term Loan Agreement
In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto. The Second Lien Term Loan Agreement provided for a term loan facility in the aggregate principal amount of $51.0 million.
In May 2020, the Company entered into an amendment, limited waiver and consent to credit agreement with an effective date of April 1, 2020, to amend the Second Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan and French Loan, each as defined and described below.
As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest was replaced by the Replacement Term Loan, as defined and described below.
During the three and six months ended June 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and six months ended June 30, 2020, the Company recognized $1.4 million and $2.7 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.
During the three and six months ended June 30, 2021, the Company recognized no PIK interest and during the three and six months ended June 30, 2020, the Company recognized $1.9 million and $3.3 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations.
Replacement Term Loan
In July 2020, the Company entered into the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon.
The interest on the Replacement Term Loan was LIBOR plus 10.75% per annum, subject to a 1.00% LIBOR floor, of which 4.00% was payable in cash and the remainder of which was PIK interest (provided that the Company may elect on not more than one occasion to pay all interest as PIK interest). The Eleventh Amendment provided for a 1.00% PIK closing fee, which was added to the principal amount of the Replacement Term Loan on the closing date and provided for a prepayment penalty on the entire principal amount of the Replacement Term Loan in an amount equal to 3.0% of the aggregate principal amount prepaid prior to December 31, 2021.
In February 2021, the Company entered into the Senior Term Loan Credit Agreement, as defined and described below. The proceeds received from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan. As a result of the repayment, the Term Loan Agreement was terminated and is no longer in effect. During the six months ended June 30, 2021, the Company recognized $11.7 million as loss on debt extinguishment in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50. Included in the loss was $8.9 million of unamortized debt issuance and others costs and a $2.8 million prepayment penalty.
During the three and six months ended June 30, 2021, the Company recognized no amortization of debt issuance costs and $0.4 million amortization of debt issuance costs, respectively, and during the three and six months ended June 30, 2020, the Company recognized no amortization of debt issuance costs in the accompanying condensed consolidated statements of operations.
17

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2020, the Company had total unamortized debt issuance and discount costs of $9.1 million, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.
During the three and six months ended June 30, 2021, the Company recognized no PIK interest and $0.7 million of PIK interest, respectively, and during the three and six months ended June 30, 2020, the Company recognized no PIK interest in the accompanying condensed consolidated statements of operations.
As of December 31, 2020, the Company had $90.2 million of aggregate principal outstanding.
Senior Term Loan Credit Agreement
On February 2, 2021, the Company entered into a credit agreement (the “Senior Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the lenders party thereto (collectively, the “Lenders”). The Senior Term Loan Credit Agreement provides for an initial term loan facility in the aggregate principal amount of $100.0 million, all of which has been borrowed by the Company and was used to repay the Replacement Term Loan, as described above, and a delayed draw term loan facility in the aggregate principal amount of up to $125.0 million, which may be drawn by the Company in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the delayed draw term loan facility.
Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor. The Senior Term Loan Credit Agreement includes customary affirmative and negative covenants, including a maximum total net leverage ratio requirement tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make capital expenditures exceeding $27.5 million during any fiscal year. To the extent that the amount of capital expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for capital expenditures in the immediately succeeding fiscal year.
Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings under the Senior Term Loan Credit Agreement mature on February 2, 2027.
All of the indebtedness under the Senior Term Loan Credit Agreement is and will be guaranteed by the Company’s existing and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.
Pursuant to the Senior Term Loan Credit Agreement, the Company issued warrants (the “Senior Term Loan Warrants”) to Atlantic Park to purchase in the aggregate up to 3,905,486 shares of the Company’s common stock, with an exercise price of $9.00 per share, subject to adjustment as provided in the Senior Term Loan Warrants. The Senior Term Loan Warrants are exercisable at any time prior to February 2, 2026.
In accordance with guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging”, the Senior Term Loan Credit Agreement and the Senior Term Loan Warrants are each freestanding instruments and proceeds were allocated to each instrument on a relative fair value basis of $82.4 million and $17.6 million, respectively.
The Senior Term Loan Warrants are not within the scope of ASC 480 and do not meet the criteria for liability classification. However, the Senior Term Loan Warrants are determined to be indexed to the Company’s common stock and meet the requirements for equity classification pursuant to ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity”. The $17.6 million allocated to the Senior Term Loan Warrants was determined using an option pricing method and is recorded in common stock warrants in the accompanying condensed consolidated balance sheets.
Debt issuance costs of $5.4 million and original issue discount of $3.0 million were incurred in connection with entry into the Senior Term Loan Credit Agreement. The total costs of $8.4 million were allocated to each instrument on a relative fair value basis. The $7.1 million allocated to the Senior Term Loan Credit Agreement will be amortized into interest expense over the contractual term of the loan using the effective interest method and the $1.3 million allocated to the Senior Term Loan Warrants was recorded as a reduction of equity.
The Company determined the fair value of the Senior Term Loan Credit Agreement using a discount rate build up approach. The debt discount of $17.6 million created by the relative fair value allocation of the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the loan. The debt discount is recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.
18

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During the three and six months ended June 30, 2021, the Company recognized $0.7 million and $1.1 million, respectively, of amortization of debt issuance and discount costs in the accompanying condensed consolidated statements of operations.
As of June 30, 2021, the Company had total unamortized debt issuance and discount costs of $23.6 million, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.
As of June 30, 2021, the Company had $100.0 million aggregate principal outstanding.
Convertible Notes
In February 2017, the Company completed a public offering of 2.75% Convertible Senior Notes (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year, beginning on July 1, 2017. The Convertible Notes are convertible into 5,005,000 shares of the Company’s common stock, based on an initial conversion price of $24.98 per share. The Convertible Notes will mature on July 1, 2022 unless earlier converted. In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”) in privately negotiated transactions with certain of the underwriters or their affiliates (in this capacity, the “option counterparties”). The Convertible Note Hedges provide the Company with the option to acquire, on a net settlement basis, 5,005,000 shares of its common stock, which is equal to the number of shares of common stock that notionally underlie the Convertible Notes, at a strike price of $24.98, which corresponds to the conversion price of the Convertible Notes. The Convertible Note Hedges have an expiration date that is the same as the maturity date of the Convertible Notes, subject to earlier exercise. The Convertible Note Hedges have customary anti-dilution provisions similar to the Convertible Notes.
During the second quarter of 2021, no conditions allowing holders of the Convertible Notes to convert have been met. Therefore, the Convertible Notes were not convertible during the second quarter of 2021 and are classified as long-term debt. Should conditions allowing holders of the Convertible Notes to convert be met in a future quarter, the Convertible Notes will be convertible at their holders’ option during the immediately following quarter. As of June 30, 2021, the if-converted value of the Convertible Notes did not exceed the principal value of those Convertible Notes.
Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. Because the Company may elect to settle conversion in cash, the Company separated the Convertible Notes into their liability and equity components by allocating the issuance proceeds to each of those components in accordance with ASC 470-20. The Company first determined the fair value of the liability component by estimating the value of a similar liability that does not have an associated equity component. The Company then deducted that amount from the issuance proceeds to arrive at a residual amount, which represents the equity component. The Company accounted for the equity component as a debt discount (with an offset to paid-in capital in excess of par value). The debt discount created by the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the Convertible Notes ending on July 1, 2022.
During the three and six months ended June 30, 2021, the Company recognized total interest expense of $2.7 million and $5.3 million and during the three and six months ended June 30, 2020, the Company recognized total interest expense of $2.5 million and $5.1 million, respectively, in the accompanying condensed consolidated statements of operations. The interest expense recognized consists of contractual interest coupon, amortization of debt discount and amortization of debt issuance costs on the Convertible Notes, and is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Contractual interest coupon on convertible debt $ 860  $ 870  $ 1,720  $ 1,740 
Amortization of debt issuance costs 140  140  270  270 
Amortization of "equity discount" related to debt 1,650  1,520  3,300  3,040 
Total $ 2,650  $ 2,530  $ 5,290  $ 5,050 

As of June 30, 2021 and December 31, 2020, the Company had total unamortized debt issuance and discount costs of $7.9 million and $11.5 million, respectively, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.
19

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of June 30, 2021 and December 31, 2020, the Company had $125.0 million and $125.0 million, respectively, of aggregate principal outstanding.
Paycheck Protection Program Loan
In April 2020, Horizon Global Company LLC (the “U.S. Borrower”), a direct U.S.-based subsidiary of the Company, received a loan from PNC Bank, National Association (“PNC”) for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES Act.
The Company submitted its PPP Loan application in good faith in accordance with the CARES Act and the guidance issued by the Small Business Administration (the “SBA”), including the SBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and sized based criteria of the program.
As of June 30, 2021, the Company has filed its application of loan forgiveness with PNC and the SBA for forgiveness of $8.0 million of the $8.7 million of funds originally received. The potential loan forgiveness is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of the loan has an interest rate of 1.0% per annum, and in July 2021, the note was amended to make the unforgiven portion payable over five years on a monthly basis. The Company has deferred interest payments until the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and Treasury and the terms of the Company’s PPP Loan. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of our PPP Loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.
The French Loan
In April 2020, S.I.A.R.R. SAS (the “French Borrower”), an indirect subsidiary of the Company, received a loan from BNP Paribas (the “French Loan”) for $5.5 million. On February 17, 2021, the French Borrower entered into an amendment to the French Loan. Under the terms of the amendment, the repayment of the loan was modified to monthly repayments of principal and interest beginning April 2022 through April 2026, from the original maturity of April 9, 2021. In addition, the interest rate on the French Loan was amended to a rate of 1.0% per annum and interest is payable monthly beginning April 2021.
Covenant and Liquidity Matters
The Company is in compliance with all of its financial covenants as of June 30, 2021.
20

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Leases
The Company leases certain facilities, automobiles and equipment under non-cancellable operating leases. Our leases have remaining lease terms of one to eight years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Most leases include one or more options to renew. The exercise of lease renewal options is typically at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in the lease term. The Company combines lease and non-lease components, which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Refer to Note 3, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020, for more information.
Supplemental information for the Company’s leases is as follows:
Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (dollars in thousands)
Operating lease cost $ 3,760  $ 3,600  $ 7,630  $ 7,200 

Six Months Ended June 30,
  2021 2020
Operating cash flows from operating leases $ 6,120  $ 8,110 
ROU assets obtained in exchange for operating lease obligations $ 540  $ 2,580 

  June 30,
2021 		December 31,
2020
Weighted average remaining lease term (years) 5.4 6.0
Weighted average discount rate 8.4  % 8.4  %
10. Contingencies
In April 2020, the Company agreed to a settlement (the “Settlement”) related to certain intellectual property infringement claims made against one of the Company’s subsidiaries in its Horizon Europe-Africa operating segment. The Company settled all historical and future associated claims for $4.4 million to be paid evenly in semi-annual installments on June 30 and December 31 of each year through December 31, 2024. As a result of the Settlement, the Company recorded a $1.5 million charge during the first quarter of 2020 in cost of sales of the accompanying condensed consolidated statements of operations. During the three and six months ended June 30, 2021, the Company recorded $0.1 million and $0.2 million of royalties, respectively, and during the three and six months ended June 30, 2020, the Company recorded $0.2 million of royalties, all of which were recorded in cost of sales in the accompanying condensed consolidated statements of operations.
As of June 30, 2021 and December 31, 2020, the Company had recorded $0.9 million and $0.9 million, respectively, in prepaid expenses and other current assets and $1.4 million and $1.8 million, respectively, in other assets, in the accompanying condensed consolidated balance sheets related to the royalties to be recognized by the Company over the life of future programs connected to the Settlement. In addition, as of June 30, 2021 and December 31, 2020, the Company had $0.9 million and $1.0 million, respectively, in accrued liabilities and $2.4 million and $2.9 million, respectively, in other long-term liabilities, in the accompanying condensed consolidated balance sheets related to the remaining semi-annual installment payments.
21

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)



11. Earnings (Loss) per Share
Basic earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding. Diluted earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding, adjusted to give effect to the assumed exercise of outstanding stock options and warrants, vesting of restricted shares outstanding, and conversion of the Convertible Notes, where dilutive to earnings per share.
A reconciliation of the numerator and the denominator of basic income (loss) per share attributable to Horizon Global and diluted income (loss) per share attributable to Horizon Global is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands, except for per share amounts)
Numerator:
Net income (loss) from continuing operations $ 960  $ (16,720) $ (14,190) $ (33,250)
Add: Loss from discontinued operations, net of tax —  —  —  (500)
Less: Net loss attributable to noncontrolling interest (330) (380) (670) (670)
Net income (loss) attributable to Horizon Global $ 1,290  $ (16,340) $ (13,520) $ (33,080)
Denominator:
Weighted average shares outstanding, basic 27,022,652  25,618,793  26,883,818  25,509,794 
Dilutive effect of common stock equivalents 5,724,551  —  —  — 
Weighted average shares outstanding, diluted 32,747,203  25,618,793  26,883,818  25,509,794 
Basic income (loss) per share attributable to Horizon Global
Continuing operations $ 0.05  $ (0.64) $ (0.50) $ (1.28)
Discontinued operations —  —  —  (0.02)
Total $ 0.05  $ (0.64) $ (0.50) $ (1.30)
Diluted income (loss) per share attributable to Horizon Global
Continuing operations $ 0.04  $ (0.64) $ (0.50) $ (1.28)
Discontinued operations —  —  —  (0.02)
Total $ 0.04  $ (0.64) $ (0.50) $ (1.30)
As a result of the net loss from continuing operations for the three months ended June 30, 2020 and six months ended June 30, 2021 and 2020, the effect of certain dilutive securities was excluded from the computation of weighted average diluted shares outstanding, as inclusion would have resulted in anti-dilution. A summary of these anti-dilutive common stock equivalents are as follows:
22

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Number of options 18,961  18,961  18,961  18,961 
Exercise price of options
$9.20 - $11.02
$9.20 - $11.02
$9.20 - $11.02
$9.20 - $11.02
Restricted stock units —  2,011,211  1,915,451  1,709,598 
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 
Common stock warrants 3,905,486  6,443,910  8,596,184  6,443,910 
For purposes of determining diluted loss per share, the Company has elected a policy to assume that the principal portion of the Convertible Notes, as described in Note 8, Long-term Debt, is settled in cash and the conversion premium is settled in shares. Therefore, the Company has adopted a policy of calculating the diluted loss per share effect of the Convertible Notes using the treasury stock method. As a result, the dilutive effect of the Convertible Notes is limited to the conversion premium, which is reflected in the calculation of diluted loss per share as if it were a freestanding written call option on the Company’s shares. Using the treasury stock method, the warrants issued in connection with the issuance of the Convertible Notes are considered to be dilutive when they are in the money relative to the Company’s average common stock price during the period. The Convertible Note Hedges purchased in connection with the issuance of the Convertible Notes are always considered to be anti-dilutive and therefore do not impact the Company’s calculation of diluted loss per share.
12. Equity Awards
Description of the Plans
In June 2020, the shareholders approved the Horizon Global Corporation 2020 Equity and Incentive Compensation Plan (the “Horizon 2020 Plan”). Horizon employees, non-employee directors and certain consultants participate in the Horizon 2020 Plan. The Horizon 2020 Plan authorizes the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), appreciation rights, restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, dividend equivalents and certain other awards based upon terms and conditions described in the Horizon 2020 Plan. No more than 4.1 million Horizon common shares may be delivered under the Horizon 2020 Plan, plus (A) the total number of shares remaining available for awards under the Horizon 2015 Plan, as defined and described below, as of June 19, 2020, plus (B) the shares that are subject to awards granted under the Horizon 2020 Plan or the Horizon 2015 Plan that are added (or added back, as applicable) to the aggregate number of shares available under the Horizon 2020 Plan pursuant to the share counting rules of the Horizon 2020 Plan. These shares may be shares of original issuance or treasury shares, or a combination of both.
Prior to the Horizon 2020 Plan, employees and non-employee directors participated in the Horizon Global Corporation 2015 Equity and Incentive Compensation Plan (as amended and restated, the “Horizon 2015 Plan”). The Horizon 2015 Plan authorized the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, and certain other awards based on or related to our common stock to Horizon employees and non-employee directors.
Stock Options
Horizon’s stock option activity is as follows:
23

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Number of Stock Options Weighted Average Exercise Price Average Remaining Contractual Life (Years) Aggregate Intrinsic Value
Outstanding at December 31, 2020 18,961  $ 10.43 
Granted —  — 
Exercised —  — 
Canceled, forfeited —  — 
Expired —  — 
Outstanding at June 30, 2021 18,961  $ 10.43  4.5 $ — 
As of June 30, 2021, there was no unrecognized compensation cost related to stock options. During the three and six months ended June 30, 2021 and 2020, there was no stock-based compensation expense recognized by the Company related to stock options. As of June 30, 2021, the aggregate intrinsic value of outstanding stock options was immaterial. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.


Restricted Stock Units
During the six months ended June 30, 2021, the Company granted an aggregate of 524,711 restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain key employees and non-employee directors. The total grants consisted of: (i) 83,482 RSUs that vested during the period, (ii) 153,563 time-based RSUs vesting on a ratable basis on March 1, 2022, March 1, 2023 and March 1, 2024, (iii) 230,350 PSUs vesting on April 1, 2024 and (iv) 57,316 time-based RSUs vesting on May 28, 2022.
During 2020, the Company granted an aggregate of 1,502,072 RSUs and PSUs to certain key employees and non-employee directors. The total grants consisted of: (i) 284,859 time-based RSUs vesting on a ratable basis on March 3, 2021, March 3, 2022 and March 3, 2023; (ii) 277,228 time-based RSUs vesting on June 24, 2021; (iii) 21,351 time-based RSUs vesting on a ratable basis on April 2, 2021, March 3, 2022 and March 3, 2023 and (iv) 918,634 PSUs vesting on March 3, 2023.
The performance criteria for the PSUs granted is based on the Company’s three-year cumulative EBITDA. The grant date fair values for the PSUs and RSUs are based on the closing trading price of the Company’s common stock on the date of grant.
The grant date fair value of RSUs is expensed over the vesting period. Changes in the number of RSUs outstanding for the six months ended June 30, 2021 are as follows:
Number of Restricted Stock Units(a)
Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020 1,800,682  $ 3.14 
Granted 524,711  8.96 
Vested (496,565) 2.63 
Canceled, forfeited (71,669) 5.21 
Outstanding at June 30, 2021 1,757,159  $ 4.94 
(a)Includes PSUs at 100% attainment.
As of June 30, 2021, there was $5.7 million in unrecognized compensation costs related to unvested RSUs that is expected to be recognized over a weighted-average period of 2.2 years.
24

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During the three and six months ended June 30, 2021, the Company recognized $0.9 million and $1.7 million, respectively, of stock-based compensation expense related to RSUs, and during the three and six months ended June 30, 2020, the Company recognized $0.9 million and $1.3 million, respectively, of stock-based compensation expense related to RSUs. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.
25

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Shareholders’ Equity
Preferred Stock
The Company is authorized to issue 100,000,000 shares of preferred stock, par value of $0.01 per share. As of June 30, 2021 and December 31, 2020, there were no preferred shares outstanding.
Common Stock
The Company is authorized to issue 400,000,000 shares of Horizon Global common stock, par value of $0.01 per share. As of June 30, 2021, there were 27,970,998 shares of common stock issued and 27,284,492 shares of common stock outstanding. As of December 31, 2020, there were 27,089,673 shares of common stock issued and 26,403,167 shares of common stock outstanding.
Common Stock Warrants
In March 2019, in connection with the Second Lien Term Loan, the Company became obligated to issue detachable warrants to purchase up to 6.25 million shares of the Company’s common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $1.50 per share.
In February 2021, in connection with the Senior Term Loan Credit Agreement, the Company issued the Senior Term Loan Warrants to purchase up to 3,905,486 shares of the Company’s common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $9.00 per share. See Note 8, Long-term Debt, for additional information.
As of June 30, 2021, warrants to purchase 1,228,490 shares of the Company’s common stock have been exercised, resulting in the issuance of 972,924 shares of the Company’s common stock. As of June 30, 2021, warrants to purchase 9,231,146 shares of the Company’s common stock were issued and remain outstanding. During the six months ended June 30, 2021, a related-party entity, JKI Holdings, LLC, an entity owned by the chair of our board of directors, exercised in full the warrants that it originally received in connection with the March 2019 issuance described above, and paid the exercise price in cash and received 278,283 shares of common stock. During the six months ended June 30, 2021, the Company recognized $0.3 million of non-cash transactions in connection with warrants exercised.
Accumulated Other Comprehensive Income (Loss) (“AOCI”)
The change in AOCI attributable to Horizon Global by component, net of tax, for the six months ended June 30, 2021 is as follows:
Foreign Currency Translation and Other
(dollars in thousands)
Balance at January 1, 2021 $ (6,540)
Net unrealized losses arising during the period (2,420)
Net change (2,420)
Balance at June 30, 2021 $ (8,960)
The change in AOCI attributable to Horizon Global by component, net of tax, for the six months ended June 30, 2020 is as follows:
Foreign Currency Translation and Other
(dollars in thousands)
Balance at January 1, 2020 $ (9,790)
Net unrealized losses arising during the period (2,300)
Net change (2,300)
Balance at June 30, 2020 $ (12,090)
26

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Segment Information
The Company groups its business into operating segments generally by the region in which sales and manufacturing efforts are focused, which are grouped on the basis of similar product, market and operating factors. Each operating segment has discrete financial information evaluated regularly by the Company’s chief operating decision maker in determining resource allocation and assessing performance. The Company reports the results of its business in two operating segments: Horizon Americas and Horizon Europe-Africa. Horizon Americas is comprised of the Company’s North American operations, and prior to the Brazil Sale also included the Company’s South American operations. Horizon Europe-Africa is comprised of the Company’s European and South African operations. See below for further information regarding the types of products and services provided within each operating segment.
The Company previously had a third operating segment, Horizon Asia-Pacific (“APAC”); however, the APAC segment was sold on September 19, 2019, and is presented as a discontinued operation in the accompanying condensed consolidated financial statements. During the first quarter of 2020, the remaining post-closing conditions of the sale were completed, resulting in a true up to net cash proceeds, which were recognized as a loss on sale of discontinued operations of $0.5 million in accordance with Accounting Standards Codification 205, “Discontinued Operations”.
Horizon Americas - A market leader in the design, manufacture and distribution of a wide variety of high-quality, custom engineered towing, trailering and cargo management products and related accessories. These products are designed to support automotive OEMs, automotive OESs, aftermarket and retail customers in the agricultural, automotive, construction, industrial, marine, military, recreational vehicle, trailer and utility end markets. Products include brake controllers, cargo management, heavy-duty towing products, jacks and couplers, protection/securing systems, trailer structural and electrical components, tow bars, vehicle roof racks, vehicle trailer hitches and additional accessories.
Horizon Europe‑Africa - With a product offering similar to Horizon Americas, Horizon Europe-Africa focuses its sales and manufacturing efforts in the Europe and Africa regions of the world.
The Company’s operating segment activity is as follows:
  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (dollars in thousands)
Net Sales
Horizon Americas $ 128,380  $ 74,120  $ 238,210  $ 166,490 
Horizon Europe-Africa 93,740  46,370  183,100  117,250 
Total $ 222,120  $ 120,490  $ 421,310  $ 283,740 
Operating Profit (Loss)
Horizon Americas $ 16,760  $ 3,430  $ 28,600  $ 6,160 
Horizon Europe-Africa 1,240  (5,970) 2,700  (8,480)
Corporate (6,670) (5,430) (13,190) (12,330)
Total $ 11,330  $ (7,970) $ 18,110  $ (14,650)
27

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Income Taxes
At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. Effective tax rates vary from period to period as separate calculations are performed for those countries where the Company's operations are profitable and whose results continue to be tax-effected and for those countries where full deferred tax valuation allowances exist and are maintained. In determining the estimated annual effective tax rate, the Company analyzes various factors, including but not limited to, forecasts of projected annual earnings, taxing jurisdictions in which the pretax income and/or pretax losses will be generated, available tax planning strategies.
During the three and six months ended June 30, 2021, the effective income tax rate was 59.3% and (20.4)%, respectively. During the three and six months ended June 30, 2020, the effective income tax rate was (0.5)% and (0.2)%, respectively. The differences in the effective tax rate compared to the statutory tax rate is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.
The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance is necessary. Full valuation allowances that are recorded for deferred tax assets in the U.S. and certain foreign jurisdictions will be maintained until sufficient positive evidence exists to reduce or eliminate them. The factors considered by management in its determination of the probability of the realization of the deferred tax assets include, but are not limited to, recent historical financial results, historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, tax planning strategies. If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. The Company has recently experienced pre-tax losses. As of June 30, 2021, the Company believes that it is more likely than not that the recorded deferred tax assets will be realized.
16. Other Expense, Net
Other expense, net consists of the following components:
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Loss on sale of business $ (2,230) $ —  $ (2,230) $ — 
Foreign currency gain (loss) 460  (220) (1,650) (1,750)
Customer pay discounts (260) (270) (500) (540)
Other, net 40  40  160  170 
Total $ (1,990) $ (450) $ (4,220) $ (2,120)

28

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition contains forward-looking statements regarding industry outlook and our expectations regarding the performance of our business. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading “Forward-Looking Statements,” at the beginning of this Quarterly Report on Form 10-Q. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
You should read the following discussion together with the Company’s reports on file with the Securities and Exchange Commission, as well as our Annual Report on Form 10-K for the twelve months ended December 31, 2020 (See Item 1A. Risk Factors).
Overview
Headquartered in Plymouth, Michigan, Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global,” “we,” or the “Company”) are a leading designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products primarily in the North American, European and African markets, primarily servicing the aftermarket, automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment servicers (“automotive OESs”) (collectively, “OEs”), retail, e-commerce and industrial channels, supporting our customers generally through a regional service and delivery model.
Critical factors affecting our ability to succeed include:
•Our ability to realize the expected future economic benefits resulting from the changes made to our manufacturing operations, distribution footprint and management team in recent years, including the operational improvement initiatives implemented in 2019-2020, which are continuously ongoing to support margin expansion;
•Our ability to continue to manage our liquidity, including continuing to service our debt obligations and comply with the applicable financial covenants thereto, especially given our recent debt refinancing and capital structure alignment to support business growth and the Company’s long-term strategic plan;
•Our ability to quickly and cost-effectively introduce new products to our customers and end-user market with a resulting streamlined customer service model and improved operating margins;
•Our ability to continue to successfully launch new products and customer programs to expand or realign our geographic coverage or distribution channels and realize desired operating efficiencies and product line or customer content penetration;
•Our ability to manage our cost structure more efficiently via global supply base management, internal sourcing and/or purchasing of materials, freight and logistics management, selective outsourcing of support functions, working capital management and a global approach to leverage our administrative functions; and
•Our ability to manage liquidity and other economic and business uncertainties related to the COVID-19 pandemic that may result in future business disruption, including any mandated operating restrictions such as temporary facility closures.
If we are unable to do any of the foregoing successfully, our financial condition and results of operations could be materially and adversely impacted.
Horizon Global reports its business in two operating segments: Horizon Americas and Horizon Europe-Africa. See Note 14, Segment Information, included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” within this Quarterly Report on Form 10-Q for further description of the Company’s operating segments.
Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost and are included in cost of sales in our condensed consolidated statements of operations. Other shipping and handling expenses, which primarily relate to Horizon Americas’ distribution network, are included in selling, general and administrative expenses in our condensed consolidated statements of operations.
29


Supplemental Analysis and Segment Information
Non-GAAP Financial Measures
The Company’s management utilizes Adjusted EBITDA as the key measure of company and segment performance and for planning and forecasting purposes, as management believes this measure is most reflective of the operational profitability or loss of the Company and its operating segments and provides management and investors with information to evaluate the operating performance of its business and is representative of its performance used to measure certain of its financial covenants, further discussed in the Liquidity and Capital Resources section below. Adjusted EBITDA should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Horizon Global, which is the most directly comparable financial measure to Adjusted EBITDA that is prepared in accordance with U.S. GAAP. Adjusted EBITDA, as determined and measured by Horizon Global, should also not be compared to similarly titled measures reported by other companies. The Company also uses operating profit (loss) to measure stand-alone segment performance.
Adjusted EBITDA is defined as net income (loss) attributable to Horizon Global before interest expense, income taxes, depreciation and amortization, and before certain items, as applicable, such as severance, restructuring, relocation and related business disruption costs, gains (losses) on debt extinguishment, impairment of goodwill and other intangibles, non-cash stock compensation, certain product liability and litigation claims, acquisition and integration costs, gains (losses) on business divestitures and other assets, debt issuance costs, board transition support and non-cash unrealized foreign currency remeasurement costs.
The following table summarizes Adjusted EBITDA for our operating segments for the three months ended June 30, 2021:
Three Months Ended June 30, 2021
Horizon Americas Horizon Europe-Africa Corporate Consolidated
(dollars in thousands)
Net income attributable to Horizon Global $ 1,290 
Net loss attributable to noncontrolling interest (330)
Net income $ 960 
Interest expense 6,980 
Income tax expense 1,400 
Depreciation and amortization 5,220 
EBITDA $ 15,980  $ 5,040  $ (6,460) $ 14,560 
Net loss attributable to noncontrolling interest —  330  —  330 
Restructuring, relocation and related business disruption costs 20  90  (40) 70 
Non-cash stock compensation —  —  850  850 
Loss (gain) on business divestitures and other assets 2,480  (10) —  2,470 
Debt issuance costs —  —  190  190 
Unrealized foreign currency remeasurement costs —  (340) (110) (450)
Adjusted EBITDA $ 18,480  $ 5,110  $ (5,570) $ 18,020 







30

The following table summarizes Adjusted EBITDA for our operating segments for the three months ended June 30, 2020:
Three Months Ended June 30, 2020
Horizon Americas Horizon Europe-Africa Corporate Consolidated
(dollars in thousands)
Net loss attributable to Horizon Global $ (16,340)
Net loss attributable to noncontrolling interest (380)
Net loss $ (16,720)
Interest expense 8,220 
Income tax expense 80 
Depreciation and amortization 5,470 
EBITDA $ 5,350  $ (3,250) $ (5,050) $ (2,950)
Net loss attributable to noncontrolling interest —  380  —  380 
Restructuring, relocation and related business disruption costs 410  30  210  650 
Non-cash stock compensation —  —  900  900 
Loss on business divestitures and other assets 240  —  40  280 
Debt issuance costs —  —  560  560 
Unrealized foreign currency remeasurement costs (100) 690  (370) 220 
Adjusted EBITDA $ 5,900  $ (2,150) $ (3,710) $ 40 
31

Segment Information
Financial information for our operating segments for the three months ended June 30, 2021 and 2020 is as follows:
Three Months Ended June 30, Change Constant Currency Change
2021 As a Percentage of Net Sales 2020 As a Percentage of Net Sales $ % $ %
(dollars in thousands)
Net Sales
Horizon Americas $ 128,380  57.8  % $ 74,120  61.5  % $ 54,260  73.2  % $ 54,270  73.2  %
Horizon Europe-Africa 93,740  42.2  % 46,370  38.5  % 47,370  102.2  % 39,480  85.1  %
Total $ 222,120  100.0  % $ 120,490  100.0  % $ 101,630  84.3  % $ 93,750  77.8  %
Gross Profit
Horizon Americas $ 35,080  27.3  % $ 18,140  24.5  % $ 16,940  93.4  % $ 16,700  92.1  %
Horizon Europe-Africa 12,210  13.0  % (90) (0.2) % 12,300  13,666.7  % 11,390  12,655.6  %
Total $ 47,290  21.3  % $ 18,050  15.0  % $ 29,240  162.0  % $ 28,090  155.6  %
Selling, General and Administrative Expenses
Horizon Americas $ 18,320  14.3  % $ 14,730  19.9  % $ 3,590  24.4  % $ 3,480  23.6  %
Horizon Europe-Africa 10,970  11.7  % 5,870  12.7  % 5,100  86.9  % 4,140  70.5  %
Corporate 6,670  N/A 5,420  N/A 1,250  23.1  % 1,250  23.1  %
Total $ 35,960  16.2  % $ 26,020  21.6  % $ 9,940  38.2  % $ 8,870  34.1  %
Operating Profit (Loss)
Horizon Americas $ 16,760  13.1  % $ 3,430  4.6  % $ 13,330  388.6  % $ 13,210  385.1  %
Horizon Europe-Africa 1,240  1.3  % (5,970) (12.9) % 7,210  120.8  % 7,240  121.3  %
Corporate (6,670) N/A (5,430) N/A (1,240) (22.8  %) (1,240) (22.8  %)
Total $ 11,330  5.1  % $ (7,970) (6.6) % $ 19,300  242.2  % $ 19,210  241.0  %
Capital Expenditures
Horizon Americas $ 2,880  2.2  % $ 900  1.2  % $ 1,980  220.0  % $ 1,970  218.9  %
Horizon Europe-Africa 3,700  3.9  % 490  1.1  % 3,210  655.1  % 3,170  646.9  %
Corporate —  N/A —  N/A —  —  % —  —  %
Total $ 6,580  3.0  % $ 1,390  1.2  % $ 5,190  373.4  % $ 5,140  369.8  %
Depreciation of Property and Equipment and Amortization of Intangibles
Horizon Americas $ 1,780  1.4  % $ 2,040  2.8  % $ (260) (12.7  %) $ (280) (13.7  %)
Horizon Europe-Africa 3,390  3.6  % 3,370  7.3  % 20  0.6  % (260) (7.7  %)
Corporate 50  N/A 60  N/A (10) (16.7  %) (10) (16.7  %)
Total $ 5,220  2.4  % $ 5,470  4.5  % $ (250) (4.6  %) $ (550) (10.1  %)
Adjusted EBITDA
Horizon Americas $ 18,480  14.4  % $ 5,900  8.0  % $ 12,580  213.2  % N/A N/A
Horizon Europe-Africa 5,110  5.5  % (2,150) (4.6) % 7,260  337.7  % N/A N/A
Corporate (5,570) N/A (3,710) N/A (1,860) (50.1  %) N/A N/A
Total $ 18,020  8.1  % $ 40  —  % $ 17,980  44,950.0  % N/A N/A
32


Results of Operations
Three Months Ended June 30, 2021 Compared with Three Months Ended June 30, 2020
Consolidated net sales increased $101.6 million, or 84.3%, to $222.1 million during the three months ended June 30, 2021, as compared to $120.5 million during the three months ended June 30, 2020. The impact was driven by an increase in net sales in Horizon Americas and Horizon Europe-Africa primarily as a result of the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that significantly impacted the Company in the second quarter of 2020. Net sales for Horizon Americas increased $54.3 million, driven primarily by increases in sales volumes in the aftermarket, automotive OEM and retail sales channels, as well as pricing recovery initiatives driven by commodity and input cost price increases. Net sales for Horizon Europe-Africa increased $47.3 million, driven primarily by increases in sales volumes in the automotive OEM, automotive OES and aftermarket sales channels, as well as $7.9 million of favorable currency translation.
Gross profit margin (gross profit as a percentage of net sales) was 21.3% and 15.0% during the three months ended June 30, 2021 and 2020, respectively. The improved gross profit margin is primarily due to higher net sales in Horizon Americas and Horizon Europe-Africa as detailed above, coupled with favorable net sales channel mix, as well as improved operating efficiency during the three months ended June 30, 2021, as compared to the three months ended June 30, 2020, as a result of the impacts of the COVID-19 pandemic experienced in the second quarter of 2020.
Selling, general and administrative (“SG&A”) expenses increased $9.9 million, primarily attributable to $4.9 million higher personnel and other variable compensation costs combined across the Company, driven by temporary salary reductions in the U.S. and participation in certain payroll reimbursement programs in Horizon Europe-Africa in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic. Unfavorable currency translation in Horizon Europe-Africa of $1.0 million also contributed to the increase.
Operating margin (operating profit (loss) as a percentage of net sales) was 5.1% and (6.6)% during the three months ended June 30, 2021 and 2020, respectively. Operating profit improved $19.3 million to an operating profit of $11.3 million during the three months ended June 30, 2021, from an operating loss of $(8.0) million during the three months ended June 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.
Other expense, net increased $1.5 million to $2.0 million during the three months ended June 30, 2021, as compared to $0.5 million during the three months ended June 30, 2020, primarily attributable to the $2.2 million loss on the sale of the Company’s Brazil business during the three months ended June 30, 2021. Refer to Note 4, Goodwill and Other Intangible Assets, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information of the sale of the Company’s Brazil business.
Interest expense decreased $1.2 million to $7.0 million during the three months ended June 30, 2021, as compared to $8.2 million during the three months ended June 30, 2020, primarily as a result of the Company’s February 2021 refinancing, which resulted in a new term loan agreement and replaced the Company’s existing term loan agreement. The new term loan included a lower interest rate and removed paid-in-kind interest, resulting in lower interest expense for the three months ended June 30, 2021, as compared to the three months ended June 30, 2020. Refer to Note 8, Long-term Debt, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information of the Company’s February 2021 refinancing.
The effective income tax rate for the three months ended June 30, 2021 and 2020 was 59.3% and (0.5)%, respectively. The increase in tax expense and related impacts on the effective income tax rate for the three months ended June 30, 2021 is attributable to projected jurisdictional income mix in jurisdictions not in a valuation allowance, coupled with utilization limitations on usage of U.S. tax attributes. The difference in the effective tax rate compared to the statutory tax rate for both periods is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.
Net income from continuing operations increased $17.7 million to $1.0 million during the three months ended June 30, 2021, compared to a net loss from continuing operations of $(16.7) million during the three months ended June 30, 2020. The improvement was attributable to the operational results detailed above.
See below for a discussion of operating results by segment.
33

Horizon Americas
Net sales by sales channel, in thousands, for Horizon Americas are as follows:
Three Months Ended June 30, Change
2021 2020 $ %
Net Sales
Aftermarket $ 40,560  $ 22,280  $ 18,280  82.0  %
Automotive OEM 22,650  9,510  13,140  138.2  %
Automotive OES 4,240  1,080  3,160  292.6  %
Retail 32,610  22,830  9,780  42.8  %
E-commerce 19,730  13,370  6,360  47.6  %
Industrial 8,590  5,040  3,550  70.4  %
Other —  10  (10) (100.0) %
Total $ 128,380  $ 74,120  $ 54,260  73.2  %
Net sales increased $54.3 million, or 73.2%, to $128.4 million during the three months ended June 30, 2021, as compared to $74.1 million during the three months ended June 30, 2020, primarily attributable to higher sales volumes in all sales channels. The increased volumes compared to the three months ended June 30, 2020, are attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that impacted the Company in the second quarter of 2020. Net sales also increased by $10.3 million in 2021 due to pricing increases, which were implemented to recover increased material and input costs. The increase was partially offset by a $5.0 million increase in sales returns and allowances during the three months ended June 30, 2021, as compared with the three months ended June 30, 2020, primarily as a result of the higher sales volumes experienced.
Horizon Americas’ gross profit increased $17.0 million, or 93.4%, to $35.1 million, or 27.3% of net sales, during the three months ended June 30, 2021, as compared to $18.1 million, or 24.5% of net sales, during the three months ended June 30, 2020. The increase in gross profit and gross profit margin reflects the changes in sales detailed above. Additionally, gross profit was impacted by the following:
–$0.9 million of favorable tariff recoveries;
–$5.2 million unfavorable manufacturing input costs, such as material costs due to increasing commodity and raw material market prices, coupled with other input costs; and
–$2.3 million unfavorable outbound freight costs driven by higher sales volumes discussed above.
SG&A increased $3.6 million to $18.3 million, or 14.3% of net sales, during the three months ended June 30, 2021, as compared to $14.7 million, or 19.9% of net sales, during the three months ended June 30, 2020. The increase in SG&A was primarily attributable to the cost saving initiatives implemented by the Company and corresponding savings realized during the second quarter of 2020 in response to the impacts of the COVID-19 pandemic. As a result, the increase in SG&A is attributable to the following:
–$2.3 million higher personnel and other variable compensation costs, primarily as a result of temporary salary reductions in the U.S. and other compensation and benefit cost reductions in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic; and
–$0.9 million higher outside professional fees and other administrative costs.
Horizon Americas’ operating profit increased $13.4 million to $16.8 million, or 13.1% of net sales, during the three months ended June 30, 2021, as compared to $3.4 million, or 4.6% of net sales, during the three months ended June 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.
Horizon Americas’ Adjusted EBITDA increased $12.6 million to $18.5 million during the three months ended June 30, 2021, as compared to Adjusted EBITDA of $5.9 million during the three months ended June 30, 2020. Adjusted EBITDA improved primarily due to the operational results detailed above.
34

Horizon Europe-Africa
Net sales by sales channel, in thousands, for Horizon Europe-Africa are as follows:
Three Months Ended June 30, Change
2021 2020 $ %
Net Sales
Aftermarket $ 26,130  $ 16,680  $ 9,450  56.7  %
Automotive OEM 44,190  20,620  23,570  114.3  %
Automotive OES 19,970  7,720  12,250  158.7  %
E-commerce 1,960  230  1,730  752.2  %
Industrial 630  340  290  85.3  %
Other 860  780  80  10.3  %
Total $ 93,740  $ 46,370  $ 47,370  102.2  %
Net sales increased $47.3 million, or 102.2%, to $93.7 million during the three months ended June 30, 2021, as compared to $46.4 million, during the three months ended June 30, 2020, primarily attributable to higher sales volumes in the automotive OEM, automotive OES and aftermarket sales channels. The increased volumes are attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that impacted the Company in the second quarter of 2020. The increase was also due to $7.9 million of favorable currency translation.
Horizon Europe-Africa’s gross profit increased $12.3 million, or 13,666.7%, to $12.2 million, or 13.0% of net sales, during the three months ended June 30, 2021, from $(0.1) million, or (0.2)% of net sales, during the three months ended June 30, 2020. The increase in gross profit and gross profit margin reflects the changes in sales detailed above. Additionally, gross profit was impacted by the following:
–$2.5 million higher labor costs, primarily as a result of payroll costs reimbursed in the prior year under terms of certain government payroll reimbursement programs;
–$1.1 million unfavorable outbound freight costs driven by higher sales volumes discussed above; and
–$0.8 million unfavorable manufacturing input costs, such as material costs due to increasing commodity and raw material market prices, coupled with other input costs.
SG&A increased $5.1 million to $11.0 million, or 11.7% of net sales, during the three months ended June 30, 2021, as compared to $5.9 million, or 12.7% of net sales, during the three months ended June 30, 2020. The increase in SG&A was primarily attributable to the cost saving initiatives implemented by the Company and corresponding savings realized during the second quarter of 2020 in response to the impacts of the COVID-19 pandemic. As a result, the increase in SG&A is attributable to the following:
–$1.3 million of higher personnel and other variable compensation cost, partially as a result of payroll costs reimbursed in the prior year under terms of certain government payroll reimbursement programs;
–$1.3 million of higher outside professional fees and other administrative costs; and
–$1.0 million of unfavorable currency translation.
Horizon Europe-Africa’s operating profit increased $7.2 million to an operating profit of $1.2 million, or 1.3% of net sales, during the three months ended June 30, 2021, as compared to an operating loss of $(6.0) million, or (12.9)% of net sales, during the three months ended June 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.
Horizon Europe-Africa’s Adjusted EBITDA increased $7.3 million to $5.1 million during the three months ended June 30, 2021, as compared to Adjusted EBITDA of $(2.2) million during the three months ended June 30, 2020. Adjusted EBITDA improved primarily due to the operational results detailed above.
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Corporate Expenses
Corporate expenses included in operating profit increased $1.3 million to $6.7 million during the three months ended June 30, 2021, as compared to $5.4 million during the three months ended June 30, 2020. The increase was primarily attributable to the following:
–$1.3 million higher personnel and other variable compensation costs, primarily as a result of temporary salary reductions in the U.S. and other compensation and benefit cost reductions in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic.
Corporate Adjusted EBITDA was $(5.6) million during the three months ended June 30, 2021, as compared to Adjusted EBITDA of $(3.7) million during the three months ended June 30, 2020. The change in Adjusted EBITDA was primarily due to the operational results detailed above.
The following table summarizes Adjusted EBITDA for our operating segments for the six months ended June 30, 2021:
Six Months Ended June 30, 2021
Horizon Americas Horizon Europe-Africa Corporate Consolidated
(dollars in thousands)
Net loss attributable to Horizon Global $ (13,520)
Net loss attributable to noncontrolling interest (670)
Net loss $ (14,190)
Interest expense 14,030 
Income tax expense 2,400 
Depreciation and amortization 10,720 
EBITDA $ 29,180  $ 8,830  $ (25,050) $ 12,960 
Net loss attributable to noncontrolling interest —  670  —  670 
Restructuring, relocation and related business disruption costs (840) 20  (40) (860)
Loss on debt extinguishment —  —  11,650  11,650 
Non-cash stock compensation —  —  1,710  1,710 
Loss (gain) on business divestitures and other assets 2,720  (10) —  2,710 
Debt issuance costs —  —  190  190 
Unrealized foreign currency remeasurement costs 270  950  420  1,640 
Adjusted EBITDA $ 31,330  $ 10,460  $ (11,120) $ 30,670 

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The following table summarizes Adjusted EBITDA for our operating segments for the six months ended June 30, 2020:
Six Months Ended June 30, 2020
Horizon Americas Horizon Europe-Africa Corporate Consolidated
(dollars in thousands)
Net loss attributable to Horizon Global $ (33,080)
Net loss attributable to noncontrolling interest (670)
Net loss $ (33,750)
Interest expense 16,410 
Income tax expense 70 
Depreciation and amortization 10,530 
EBITDA $ 10,290  $ (4,340) $ (12,690) $ (6,740)
Net loss attributable to noncontrolling interest —  670  —  670 
Loss from discontinued operations, net of tax —  —  500  500 
Severance 530  20  (10) 540 
Restructuring, relocation and related business disruption costs 1,300  30  320  1,650 
Non-cash stock compensation —  —  1,320  1,320 
Loss (gain) on business divestitures and other assets 600  (180) 40  460 
Product liability and litigation claims —  1,510  —  1,510 
Debt issuance costs —  —  1,310  1,310 
Unrealized foreign currency remeasurement costs (700) 2,440  10  1,750 
Adjusted EBITDA $ 12,020  $ 150  $ (9,200) $ 2,970 
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The following table summarizes financial information for our operating segments for the six months ended June 30, 2021 and 2020:
Six Months Ended June 30, Change Constant Currency Change
2021 As a Percentage
of Net Sales 		2020 As a Percentage
of Net Sales 		$ % $ %
(dollars in thousands)
Net Sales
Horizon Americas $ 238,210  56.5  % $ 166,490  58.7  % $ 71,720  43.1  % $ 72,160  43.3  %
Horizon Europe-Africa 183,100  43.5  % 117,250  41.3  % 65,850  56.2  % 51,020  43.5  %
Total $ 421,310  100.0  % $ 283,740  100.0  % $ 137,570  48.5  % $ 123,180  43.4  %
Gross Profit
Horizon Americas $ 64,350  27.0  % $ 37,760  22.7  % $ 26,590  70.4  % $ 26,450  70.0  %
Horizon Europe-Africa 23,500  12.8  % 6,540  5.6  % 16,960  259.3  % 15,180  232.1  %
Total $ 87,850  20.9  % $ 44,300  15.6  % $ 43,550  98.3  % $ 41,630  94.0  %
Selling, General and Administrative Expenses
Horizon Americas $ 35,750  15.0  % $ 31,620  19.0  % $ 4,130  13.1  % $ 4,120  13.0  %
Horizon Europe-Africa 20,800  11.4  % 15,020  12.8  % 5,780  38.5  % 4,070  27.1  %
Corporate 13,190  N/A 12,310  N/A 880  7.1  % 880  7.1  %
Total $ 69,740  16.6  % $ 58,950  20.8  % $ 10,790  18.3  % $ 9,070  15.4  %
Operating Profit (Loss)
Horizon Americas $ 28,600  12.0  % $ 6,160  3.7  % $ 22,440  364.3  % $ 22,320  362.3  %
Horizon Europe-Africa 2,700  1.5  % (8,480) (7.2) % 11,180  131.8  % 11,090  130.8  %
Corporate (13,190) N/A (12,330) N/A (860) (7.0) % (860) (7.0) %
Total $ 18,110  4.3  % $ (14,650) (5.2) % $ 32,760  223.6  % $ 32,550  222.2  %
Capital Expenditures
Horizon Americas $ 4,380  1.8  % $ 1,470  0.9  % $ 2,910  198.0  % $ 2,900  197.3  %
Horizon Europe-Africa 5,560  3.0  % 3,980  3.4  % 1,580  39.7  % 1,060  26.6  %
Corporate —  N/A —  N/A —  —  % —  —  %
Total $ 9,940  2.4  % $ 5,450  1.9  % $ 4,490  82.4  % $ 3,960  72.7  %
Depreciation of Property and Equipment and Amortization of Intangibles
Horizon Americas $ 3,690  1.5  % $ 4,200  2.5  % $ (510) (12.1) % $ (500) (11.9) %
Horizon Europe-Africa 6,930  3.8  % 6,220  5.3  % 710  11.4  % 160  2.6  %
Corporate 100  N/A 110  N/A (10) (9.1) % (10) (9.1) %
Total $ 10,720  2.5  % $ 10,530  3.7  % $ 190  1.8  % $ (350) (3.3) %
Adjusted EBITDA
Horizon Americas $ 31,330  13.2  % $ 12,020  7.2  % $ 19,310  160.6  % N/A N/A
Horizon Europe-Africa 10,460  5.7  % 150  0.1  % 10,310  6,873.3  % N/A N/A
Corporate (11,120) N/A (9,200) N/A (1,920) (20.9) % N/A N/A
Total $ 30,670  7.3  % $ 2,970  1.0  % $ 27,700  932.7  % N/A N/A
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Results of Operations

Six Months Ended June 30, 2021 Compared with Six Months Ended June 30, 2020
Consolidated net sales increased $137.6 million, or 48.5%, to $421.3 million during the six months ended June 30, 2021, as compared to $283.7 million during the six months ended June 30, 2020. The impact was driven by an increase in net sales in Horizon Americas and Horizon Europe-Africa primarily as a result of the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that began to impact the Company near the end of the first quarter of 2020, and significantly impacted the Company during the second quarter of 2020. Net sales for Horizon Americas increased $71.7 million, driven primarily by increases in sales volumes in the aftermarket, automotive OEM, retail and e-commerce sales channels, as well as pricing recovery initiatives driven by commodity and input cost price increases. Net sales for Horizon Europe-Africa increased $65.9 million, driven primarily by increases in sales volumes in the automotive OEM, automotive OES and aftermarket sales channels, as well as $14.8 million of favorable currency translation.
Gross profit margin was 20.9% and 15.6% during the six months ended June 30, 2021 and 2020, respectively. The improved gross profit margin is primarily due to higher net sales in Horizon Americas and Horizon Europe-Africa as detailed above, coupled with favorable net sales channel mix, as well as improved operating efficiency during the six months ended June 30, 2021, as compared to six months ended June 30, 2020, as a result of the impacts of the COVID-19 pandemic experienced during the six months ended June 30, 2020.
SG&A increased $10.8 million primarily attributable to $7.9 million higher personnel and other variable compensation costs combined across the Company, driven primarily by temporary salary reductions in the U.S. and the Company’s participation in certain payroll reimbursement programs in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic. Unfavorable currency translation in Horizon Europe-Africa of $1.7 million also contributed to the increase.
Operating margin was 4.3% and (5.2)% during the six months ended June 30, 2021 and 2020, respectively. Operating profit improved $32.8 million to an operating profit of $18.1 million during the six months ended June 30, 2021, from an operating loss of $(14.7) million during the six months ended June 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.
Other expense, net increased $2.1 million to $4.2 million during the six months ended June 30, 2021, as compared to $2.1 million during the six months ended June 30, 2020, primarily attributable to the $2.2 million loss on the sale of the Company’s Brazil business completed during the second quarter of 2021. Refer to Note 4, Goodwill and Other Intangible Assets, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information of the sale of the Company’s Brazil business.
Interest expense decreased $2.4 million to $14.0 million during the six months ended June 30, 2021, as compared to $16.4 million during the six months ended June 30, 2020, primarily as a result of the Company’s February 2021 refinancing, which resulted in a new term loan agreement and replaced the Company’s existing term loan agreement. The new term loan included a lower interest rate and removed paid-in-kind interest, resulting in lower interest expense for the six months ended June 30, 2021. Additionally, as a result of the refinancing, the Company incurred an $11.7 million loss on debt extinguishment related to the termination of the existing term loan agreement. Refer to Note 8, Long-term Debt, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information.
The effective income tax rate for the six months ended June 30, 2021 and 2020 was (20.4)% and (0.2)%, respectively. The increase in tax expense and related impacts on the effective income tax rate for the six months ended June 30, 2021 is attributable to projected jurisdictional income mix in jurisdictions not in a valuation allowance, coupled with utilization limitations on usage of U.S. tax attributes. The difference in the effective tax rate compared to the statutory tax rate for both periods is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.
Net loss from continuing operations improved $19.1 million, to a net loss of $(14.2) million for the six months ended June 30, 2021, compared to a net loss from continuing operations of $(33.3) million for the six months ended June 30, 2020. The improvement was attributable to the operational results detailed above.
Loss from discontinued operations, net of tax is attributable to the sale of the Company’s former APAC operating segment, which was sold in September 2019. During the six months ended June 30, 2020, the remaining post-closing conditions of the sale were completed, including a true up to net cash proceeds, which resulted in a loss on sale of discontinued operations of $0.5 million, in accordance with Accounting Standards Codification 205-20, “Discontinued Operations”.
See below for a discussion of operating results by segment.
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Horizon Americas
Net sales by sales channel, in thousands, for Horizon Americas are as follows:
Six Months Ended June 30, Change
2021 2020 $ %
Net Sales
Aftermarket $ 72,250  $ 49,050  $ 23,200  47.3  %
Automotive OEM 50,170  29,870  20,300  68.0  %
Automotive OES 8,100  2,350  5,750  244.7  %
Retail 55,190  46,400  8,790  18.9  %
E-commerce 34,250  25,880  8,370  32.3  %
Industrial 18,250  12,890  5,360  41.6  %
Other —  50  (50) N/A
Total $ 238,210  $ 166,490  $ 71,720  43.1  %
Net sales increased $71.7 million, or 43.1%, to $238.2 million during the six months ended June 30, 2021, as compared to $166.5 million during the six months ended June 30, 2020, primarily attributable to higher sales volumes in all sales channels. The increased volumes compared to the six months ended June 30, 2020, are attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that began to impact the Company near the end of the first quarter of 2020, and significantly impacted the Company during the second quarter of 2020. Net sales also increased by $13.1 million in 2021 due to pricing increases, which were implemented to recover increased material and input costs. The increase was partially offset by a $3.7 million increase in sales returns and allowances during the six months ended June 30, 2021, as compared with the six months ended June 30, 2020, primarily as a result of the higher sales volumes experienced.
Horizon Americas’ gross profit increased $26.6 million, or 70.4%, to $64.4 million, or 27.0% of net sales, during the six months ended June 30, 2021, as compared to $37.8 million, or 22.7% of net sales, during the six months ended June 30, 2020. The increase in gross profit and gross profit margin reflects the changes in sales detailed above. Additionally, gross profit was impacted by the following:
–$2.1 million of favorable tariff recoveries;
–$4.0 million unfavorable outbound freight costs driven by higher sales volumes discussed above; and
–$3.7 million unfavorable manufacturing input costs, such as material costs due to increasing commodity and raw material market prices, coupled with other input costs.
SG&A increased $4.2 million to $35.8 million, or 15.0% of net sales during the six months ended June 30, 2021, as compared to $31.6 million, or 19.0% of net sales, during the six months ended June 30, 2020. The increase in SG&A was primarily attributable to the cost saving initiatives implemented by the Company and corresponding savings realized during the second quarter of 2020 in response to the impacts of the COVID-19 pandemic. As a result, the increase in SG&A is attributable to the following:
–$3.8 million higher personnel and other variable compensation costs, primarily as a result of temporary salary reductions in the U.S. and other compensation and benefit cost reductions in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic;
–$1.5 million higher distribution center lease and variable operating and other support costs; partially offset by:
–$0.8 million lower depreciation and amortization.
Horizon Americas’ operating profit increased $22.4 million to $28.6 million, or 12.0% of net sales, during the six months ended June 30, 2021, as compared to $6.2 million, or 3.7% of net sales, during the six months ended June 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.
Horizon Americas’ Adjusted EBITDA increased $19.3 million to $31.3 million during the six months ended June 30, 2021, as compared to Adjusted EBITDA of $12.0 million during the six months ended June 30, 2020. Adjusted EBITDA improved primarily due to operational results detailed above.
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Horizon Europe-Africa
Net sales by sales channel, in thousands, for Horizon Europe-Africa are as follows:
Six Months Ended June 30, Change
2021 2020 $ %
Net Sales
Aftermarket $ 48,550  $ 32,390  $ 16,160  49.9  %
Automotive OEM 92,750  62,020  30,730  49.5  %
Automotive OES 36,030  20,180  15,850  78.5  %
E-commerce 3,390  660  2,730  413.6  %
Industrial 1,180  660  520  78.8  %
Other 1,200  1,340  (140) (10.4) %
Total $ 183,100  $ 117,250  $ 65,850  56.2  %
Net sales increased $65.9 million, or 56.2%, to $183.1 million during the six months ended June 30, 2021, as compared to $117.3 million during the six months ended June 30, 2020, primarily attributable to higher sales volumes in the automotive OEM, automotive OES and aftermarket sales channels. The increased volumes are attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that began to impact the Company near the end of the first quarter of 2020, and significantly impacted the Company during the second quarter of 2020. The increase was also due to $14.8 million of favorable currency translation.
Horizon Europe-Africa’s gross profit increased $17.0 million, or 259.3%, to $23.5 million, or 12.8% of net sales, during the six months ended June 30, 2021, from $6.5 million, or 5.6% of net sales, during the six months ended June 30, 2020. The increase in gross profit margin reflects the changes in sales detailed above. Additionally, gross profit was impacted by the following:
–$3.7 million favorable manufacturing costs driven by improved operating efficiency and partially offset by unfavorable manufacturing input costs, such as material costs due to increasing commodity and raw material market prices, coupled with other input costs;
–$1.5 million favorable litigation settlement costs related to the charge incurred in the prior year for settlement of intellectual property infringement claims, see Note 10, Contingencies, included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements” for more information;
–$3.9 million higher labor costs, primarily as a result of payroll costs reimbursed in the prior year under terms of certain government payroll reimbursement programs; and
–$1.3 million unfavorable outbound freight costs driven by higher sales volumes discussed above.
SG&A increased $5.8 million to $20.8 million, or 11.4% of net sales during the six months ended June 30, 2021, as compared to $15.0 million, or 12.8% of net sales, during the six months ended June 30, 2020. The increase in SG&A was primarily attributable to the cost saving initiatives implemented by the Company and corresponding savings realized during the second quarter of 2020 in response to the impacts of the COVID-19 pandemic. As a result, the increase in SG&A is attributable to the following:
–$1.8 million higher personnel and other variable compensation cost, partially as a result of payroll costs reimbursed in the prior year under terms of certain government payroll reimbursement programs;
–$1.2 million of higher outside professional fees and other administrative costs; and
–$1.7 million of unfavorable currency translation.
Horizon Europe-Africa’s operating profit increased $11.2 million to an operating profit of $2.7 million, or 1.5% of net sales during the six months ended June 30, 2021, as compared to an operating loss of $(8.5) million, or (7.2)% of net sales, during the six months ended June 30, 2020. Improved operating profit and operating margin were primarily due to the operational results described above.
Horizon Europe-Africa’s Adjusted EBITDA increased $10.3 million to $10.5 million during the six months ended June 30, 2021, as compared to Adjusted EBITDA of $0.2 million during the six months ended June 30, 2020. Adjusted EBITDA improved primarily due to operational results detailed above.
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Corporate Expenses
Corporate expenses included in operating profit increased $0.9 million to $13.2 million during the six months ended June 30, 2021, as compared to $12.3 million during the six months ended June 30, 2020. The increase was primarily attributable to the following:
–$2.3 million higher personnel and other variable compensation costs primarily as a result of temporary salary reductions in the U.S. and other compensation and benefit cost reductions in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic; partially offset by:
–$1.1 million lower costs incurred related to professional service fees and other costs associated with new debt issuance, amendments, and modifications and related structure changes.
Corporate Adjusted EBITDA was $(11.1) million during the six months ended June 30, 2021, as compared to Adjusted EBITDA of $(9.2) million during the six months ended June 30, 2020. The change in Adjusted EBITDA was primarily due to the higher personnel and compensation costs described above.
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Liquidity and Capital Resources
Our capital and working capital requirements are funded through a combination of cash on hand, cash flows from operations, and various borrowings and factoring arrangements described below, including our asset-based Revolving Credit Facility (as defined below). As of June 30, 2021, and December 31, 2020, we had $12.9 million and $18.2 million, respectively, of cash and cash equivalents held at foreign subsidiaries. There may be country specific regulations, which may restrict or result in increased costs in the repatriation of these funds.
In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers (the “ABL Borrowers”). The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of $75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million. As of June 30, 2021, the Company had availability of $37.3 million under the Revolving Credit Facility and $11.8 million of cash and cash equivalents in the United States.
As of June 30, 2021 and December 31, 2020, total cash and availability was $62.0 million and $83.4 million, respectively. The Company defines cash and availability as cash and cash equivalents and amounts of cash accessible but undrawn from credit facilities.
During 2020, in response to the initial uncertain economic environment caused in part from the COVID-19 pandemic, the Company pursued funding from available government programs and other sources of liquidity designed to strengthen its balance sheet and enhance financial flexibility. These sources included short-term loans, some of which are forgivable if certain conditions are met as well as entering into or modifying other arrangements. A summary of these actions is described below.
In April 2020, Horizon Global Company LLC (the “U.S. Borrower”), a direct U.S.-based subsidiary of the Company, received a loan from PNC Bank, National Association (“PNC”) for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES Act.
The Company submitted its PPP Loan application in good faith in accordance with the CARES Act and the guidance issued by the Small Business Administration (the “SBA”), including the SBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and sized based criteria of the program.
As of June 30, 2021, the Company has filed its application of loan forgiveness with PNC and the SBA for forgiveness of $8.0 million of $8.7 million of funds originally received. The potential loan forgiveness is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of the loan has an interest rate of 1.0% per annum, and in July 2021, the note was amended to make the unforgiven portion payable over five years on a monthly basis. The Company has deferred interest payments until the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and Treasury and the terms of the Company’s PPP Loan. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of our PPP Loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.
In April 2020, S.I.A.R.R. SAS (the “French Borrower”), an indirect subsidiary of the Company, received a loan from BNP Paribas (the “French Loan”) for $5.5 million. On February 17, 2021, the French Borrower entered into an amendment to the French Loan, which under the terms of the amendment, the repayment of the loan was modified to monthly repayments of principal and interest beginning April 2022 through April 2026, from the original maturity of April 9, 2021. In addition, the interest rate on the French Loan was amended to a rate of 1.0% per annum and interest is payable monthly beginning April 2021.
In March 2020, Westfalia-Automotive GmbH (“Westfalia”), an indirect subsidiary of the Company, was approved for a government payroll reimbursement program in Germany under the Kurzarbeitergeld (the “KUG”). The KUG is designed to reimburse employers for payroll costs incurred and paid to employees affected by the business disruption and government mandated operating restrictions in place due to the COVID-19 pandemic for the period March 1, 2020 through August 31, 2020. Westfalia was approved to receive reimbursement of certain costs for the period March 19, 2020 through August 31, 2020. The Company was reimbursed $3.3 million for qualifying payroll costs under terms of the KUG for the twelve months ended December 31, 2020.
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We believe the combination of these sources, as well as the changes to our capital structure following our recent refinancing activities, as fully summarized below, will enable us to meet our working capital, capital expenditures and other funding requirements. Our ability to fund our working capital needs, debt payments and other obligations, and to comply with financial covenants, including borrowing base limitations under our Revolving Credit Facility, depends on our future operating performance and cash flow and many factors outside of our control, including the costs of raw materials, the state of the automotive accessories market, financial and economic conditions and the extent and duration of the impact of the COVID-19 pandemic.
Cash Flows - Operating Activities
Net cash used for and provided by operating activities during the six months ended June 30, 2021 and 2020 was $(27.6) million and $4.9 million, respectively.
During the six months ended June 30, 2021, the Company generated $18.8 million in cash flows, based on the reported net loss of $(14.2) million and after considering the effects of non-cash items related to depreciation, amortization of intangible assets, loss on debt extinguishment, amortization of original issuance discount and debt issuance costs, deferred income taxes, non-cash compensation expense, paid-in-kind interest, and other, net. During the six months ended June 30, 2020, the Company used $(8.2) million in cash flows, based on the reported net loss of $(33.3) million and after considering the effects of similar non-cash items previously described.
Changes in operating assets and liabilities used $(46.5) million and sourced $13.1 million of cash during the six months ended June 30, 2021 and 2020, respectively.
Changes in accounts receivable resulted in a net use of cash of $(30.6) million and $(16.8) million during the six months ended June 30, 2021 and 2020, respectively. The increase in accounts receivable is higher in the six months ended June 30, 2021 as compared with the six months ended June 30, 2020 as a result of higher net sales activity in the second quarter of 2021 as compared with the second quarter of 2020 driven by the impacts of the COVID-19 pandemic that began to impact the Company near the end of the first quarter of 2020, and significantly impacted the Company during the second quarter of 2020.
Changes in inventory resulted in a use of cash of $(31.4) million during the six months ended June 30, 2021 and source of cash of $19.3 million during the six months ended June 30, 2020. The increase in inventory during the six months ended June 30, 2021 was due in part to recent macroeconomic factors, such as rising costs of raw materials, constraints on shipping container availability and port congestion leading to higher inventory costs and levels of in-transit inventory as well as seasonal inventory build in order to meet the demand of the Company’s traditional peak selling season. The decrease in inventory during the six months ended June 30, 2020 was due to improved inventory management coupled with the COVID-19 business disruptions that impacted the Company during the six months ended June 30, 2020.
Changes in accounts payable and accrued liabilities resulted in a source of cash of $16.0 million and $13.5 million during the six months ended June 30, 2021 and 2020, respectively. The higher source of cash for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 is primarily due to the working capital build during the six months ended June 30, 2021 for the Company’s peak selling season coupled with the mix of payments to suppliers and vendors and related terms.
Cash Flows - Investing Activities
Net cash used for investing activities during the six months ended June 30, 2021 and 2020 was $(9.9) million and $(5.4) million, respectively.
During the six months ended June 30, 2021 and 2020, capital expenditures were $(9.9) million and $(5.5) million, respectively, and related to growth, capacity and productivity-related projects within Horizon Americas and Horizon Europe-Africa. The increase in capital expenditures is primarily due to the Company’s curtailment or retiming of certain projects during the six months ended June 30, 2020, in response to the impacts and business disruptions of the COVID-19 pandemic.
Cash Flows - Financing Activities
Net cash provided by financing activities was $17.3 million and $29.3 million during the six months ended June 30, 2021 and 2020, respectively.
During the six months ended June 30, 2021 and 2020, net proceeds from the Revolving Credit Facility, net of issuance costs, were $20.0 million and $35.5 million, respectively. During the six months ended June 30, 2020, net repayments on the Company’s former asset based lending facility totaled $(19.9) million.
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During the six months ended June 30, 2021, proceeds from the Company’s new term loan, net of issuance costs and related issuance of common stock warrants were $75.3 million and $16.3 million, respectively. During the six months ended June 30, 2021, repayments of borrowings on Replacement Term Loan, including transaction fees were $(94.9) million.
Additionally, during the six months ended June 30, 2020, proceeds from the PPP Loan were $8.7 million.
Factoring Arrangements
The Company has factoring arrangements with financial institutions to sell certain accounts receivable. During the six months ended June 30, 2021 and 2020, total receivables sold under certain non-recourse factoring arrangements was $158.2 million and $94.6 million, respectively. We utilize factoring arrangements as part of our working capital needs. The costs of participating in these arrangements are immaterial to our results. Refer to Note 3, Summary of Significant Accounting Policies, in Item 8, “Financial Statements and Supplementary Data,” included within our Annual Report on Form 10-K for the twelve months ended December 31, 2020, for additional information.
45

Our Debt and Other Commitments
We and certain of our subsidiaries are party to the asset-based Revolving Credit Facility, as defined and described above. The Revolving Credit Facility provides for $75.0 million of funding on a revolving basis, subject to borrowing base availability, and matures on March 13, 2023. As of June 30, 2021, there was $44.2 million outstanding on the Revolving Credit Facility bearing interest at a weighted average rate of 5.3%.
In February 2021, the Company entered into a limited consent to the Loan Agreement governing its Revolving Credit Facility, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement, as defined and described below.
On April 19, 2021, the Company entered into an amendment to the Loan Agreement governing its Revolving Credit Facility, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility from $75.0 million to $85.0 million. The amendment also increased sub-limits relating to the Company’s ability to borrow against in-transit inventory as well as inventory located in the Company’s Mexico facilities.
In addition, the Company and certain of its subsidiaries, have been or are parties to other long-term credit agreements, including the Senior Term Loan Credit Agreement, as defined and described below. As of June 30, 2021, there was $100.0 million outstanding on the Senior Term Loan Credit Agreement bearing cash interest at 7.50%.
In February 2017, the Company completed a public offering of 2.75% Convertible Senior Notes due 2022 (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year.
First Lien Term Loan Agreement and Second Lien Term Loan Agreement
In March 2019, the Company amended and restated the existing term loan agreement (the “First Lien Term Loan Agreement”) to permit the Company to, among other things, enter into the Second Lien Term Loan Agreement, as defined and described below.
In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto.
In May 2020, the Company entered into amendments, limited waivers and consents in connection with the Loan Agreement governing its Revolving Credit Facility, the First Lien Term Loan Agreement, and the Second Lien Term Loan Agreement, each with an effective date of April 1, 2020, that, among other things, consented to the Company’s applying for, obtaining and incurring the PPP Loan and French Loan, each as defined and described above.
As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement was replaced by the Replacement Term Loan, as defined and described below.
Replacement Term Loan
In July 2020, the Company entered into a limited consent to the Loan Agreement governing its Revolving Credit Facility and the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the First Lien Term Loan Agreement and Second Lien Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon.
In February 2021, the Company entered into the Senior Term Loan Credit Agreement, as defined and described below. The proceeds received from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan. As a result of the repayment, the credit agreement governing the Company’s Replacement Term Loan was terminated and is no longer in effect.

46

Senior Term Loan Credit Agreement
On February 2, 2021, the Company entered into a credit agreement (the “Senior Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the lenders party thereto (collectively, the “Lenders”). The Senior Term Loan Credit Agreement provides for an initial term loan facility in the aggregate principal amount of $100.0 million, all of which has been borrowed by the Company and used to repay the Replacement Term Loan, as described above, and a delayed draw term loan facility in the aggregate principal amount of up to $125.0 million, which may be drawn by the Company in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the delayed draw term loan facility.
Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor. The Senior Term Loan Credit Agreement includes customary affirmative and negative covenants, including a maximum total net leverage ratio requirement tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make capital expenditures exceeding $27.5 million during any fiscal year. To the extent that the amount of capital expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for capital expenditures in the immediately succeeding fiscal year.
Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings under the Senior Term Loan Credit Agreement mature on February 2, 2027.
All of the indebtedness under the Senior Term Loan Credit Agreement is and will be guaranteed by the Company’s existing and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.
Covenant and Liquidity Matters
The Loan Agreement governing our Revolving Credit Facility contains various negative and affirmative covenants and other requirements affecting us and our subsidiaries, including restrictions on incurrence of debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, asset dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The Revolving Credit Facility does not include any financial maintenance covenants other than a financial covenant that stipulates the Company will not make capital expenditures exceeding $30.0 million during any fiscal year.
We are subject to variable interest rates on our Senior Term Loan Credit Agreement and Revolving Credit Facility. At June 30, 2021, 1-Month LIBOR and 3-Month LIBOR approximated 0.10% and 0.15%, respectively.
The Company is in compliance with all of its financial covenants as of June 30, 2021.
In addition to our long-term debt, we have other cash commitments related to leases. We account for these lease transactions as operating leases and rent expense related thereto for the six months ended June 30, 2021 and 2020 was $7.6 million and $7.2 million, respectively. We expect to continue to utilize leasing as a financing strategy in the future to meet capital expenditure needs and to reduce debt levels.
Refer to Note 8, Long-term Debt, and Note 9, Leases, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information.
47

Consolidated EBITDA
Consolidated EBITDA (defined as “Consolidated EBITDA” in our Senior Term Loan Agreement) is a comparable measure to how the Company assesses performance. As discussed further in the Segment Information and Supplemental Analysis section above, we use certain non-GAAP financial measures to assess performance and measure our covenant compliance in accordance with the Senior Term Loan Agreement, which includes Adjusted EBITDA at the operating segment level. For the measurement of our Senior Term Loan Agreement financial covenants, the definition of Consolidated EBITDA limits the amount of non-recurring expenses or costs including restructuring, moving and severance that can be excluded to $10 million in any cumulative four fiscal quarter period. Similarly, the definition limits the amount of fees, costs and expenses incurred in connection with any proposed asset sale, offering of equity interests or any indebtedness, lender agent fees, and fees in connection with the maintenance and/or forgiveness of the PPP Loan, in aggregate, that can be excluded to $8 million in any cumulative four fiscal quarter period.
The reconciliations of net income (loss) attributable to Horizon Global to EBITDA, EBITDA to Adjusted EBITDA and Adjusted EBITDA to Consolidated EBITDA are as follows:
Three Months Ended June 30, Six Months Ended June 30, Last Twelve Months Ended June 30,
2021 2020 Change 2021 2020 Change 2021 2020 Change
(dollars in thousands) (dollars in thousands) (dollars in thousands)
Net income (loss) attributable to Horizon Global $ 1,290  $ (16,340) $ 17,630  $ (13,520) $ (33,080) $ 19,560  $ (17,000) $ 80,720  $ (97,720)
Net loss attributable to noncontrolling interest (330) (380) 50  (670) (670) —  (1,420) (1,320) (100)
Net income (loss) $ 960  $ (16,720) $ 17,680  $ (14,190) $ (33,750) $ 19,560  $ (18,420) $ 79,400  $ (97,820)
Interest expense 6,980  8,220  (1,240) 14,030  16,410  (2,380) 29,300  48,530  (19,230)
Income tax expense (benefit) 1,400  80  1,320  2,400  70  2,330  750  (9,320) 10,070 
Depreciation and amortization 5,220  5,470  (250) 10,720  10,530  190  23,100  21,680  1,420 
EBITDA $ 14,560  $ (2,950) $ 17,510  $ 12,960  $ (6,740) $ 19,700  $ 34,730  $ 140,290  $ (105,560)
Net loss attributable to noncontrolling interest 330  380  (50) 670  670  —  1,420  1,320  100 
Loss (income) from discontinued operations, net of tax —  —  —  —  500  (500) —  (182,240) 182,240 
EBITDA from continuing operations $ 14,890  $ (2,570) $ 17,460  $ 13,630  $ (5,570) $ 19,200  $ 36,150  $ (40,630) $ 76,780 
Adjustments pursuant to Senior Term Loan Agreement:
Losses on sale of receivables 270  250  20  500  540  (40) 1,370  1,170  200 
Debt extinguishment losses —  —  —  11,650  —  11,650  11,650  —  11,650 
Non-cash equity grant expenses 850  900  (50) 1,710  1,320  390  3,390  2,500  890 
Other non-cash expenses or losses 1,790  220  1,570  3,920  1,750  2,170  1,360  1,210  150 
Term Loans related fees, costs and expenses —  —  —  —  —  —  —  (120) 120 
Lender agent related professional fees, costs, and expenses(a)
90  270  (180) 100  380  (280) 100  320  (220)
Non-recurring expenses or costs(b)
130  970  (840) (820) 4,480  (5,300) 110  17,080  (16,970)
Non-cash losses on asset sales 10  20  (10) 10  90  (80) 10  1,240  (1,230)
Other (10) (20) 10  (30) (20) (10) (30) 660  (690)
Adjusted EBITDA $ 18,020  $ 40  $ 17,980  $ 30,670  $ 2,970  $ 27,700  $ 54,110  $ (16,570) $ 70,680 
Non-recurring expense limitation(a)(b)
N/A N/A N/A N/A N/A N/A N/A (7,080) 7,080 
Other 10  20  (10) 30  20  10  30  (660) 690 
Consolidated EBITDA $ 18,030  $ 60  $ 17,970  $ 30,700  $ 2,990  $ 27,710  $ 54,140  $ (24,310) $ 78,450 
(a) Fees, costs and expenses incurred in connection with any proposed asset sale, offering of equity interests or any indebtedness, lender agent fees, and fees in connection with the maintenance and/or forgiveness of the PPP Loan are not to, in aggregate, exceed $8 million in adjustments in determining Consolidated EBITDA in any four fiscal quarter period.
(b) Non-recurring expenses or costs including restructuring, moving and severance are not to, in aggregate, exceed $10 million in adjustments in determining Consolidated EBITDA in any four fiscal quarter period.
Credit Rating
The Company’s debt agreements do not require that we maintain a credit rating.
48

Outlook
Our business remains susceptible to economic conditions that could adversely affect our results, including potential negative impacts of the COVID-19 pandemic. The trend of customer orders in the economies that most significantly affect our demand has been strong, including the United States and Europe. However, we have experienced rising pricing to certain raw materials, including steel, and while the Company endeavors to recover incremental input costs through pricing actions, the recoveries generally occur over time and are not guaranteed. In addition, recent macroeconomic factors, such as constraints on shipping container availability, port congestion and the global microchip shortage have resulted in a delay of receiving raw materials by the Company or some of our OE customers, which has resulted in retiming some customer orders to future periods. We continue to monitor these supply constraints and remain committed to fulfilling and delivering our customers’ orders driven by the strong product demand we have experienced.
We also remain focused on maintaining liquidity to fund our operations, while considering future maturities in our capital structure, which have been addressed and will continue to be addressed as the Company continues to execute upon its business plan and operational improvement initiatives in 2021. These initiatives were put in place to streamline and simplify its operations and provide a roadmap to achieve our strategic priorities of margin expansion, liquidity management and organic business growth.
We believe the unique strategic footprint we enjoy in our market space will benefit us as our OE customers continue to demonstrate a preference for stronger relationships with few suppliers. We believe that our strong brand positions, portfolio of product offerings, and existing customer relationships present a long-term opportunity for us and provide leverage to see balanced growth in OE, aftermarket and retail businesses. That position and brand recognition allows us flexibility to bring our products to market in various channels that we believe provide us the ability to leverage our current operational footprint to meet or exceed our customer demands.
Impact of New Accounting Standards
See Note 2, New Accounting Pronouncements, included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” within this Quarterly Report on Form 10-Q.
Critical Accounting Policies
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates that affect both the amounts and timing of the recording of assets, liabilities, net sales and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.
There were no material changes to the items that we disclosed as our critical accounting policies in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the twelve months ended December 31, 2020.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
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Item 4. Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Evaluation of disclosure controls and procedures
As of June 30, 2021, an evaluation was carried out by management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) pursuant to Rule 13a-15 of the Exchange Act. The Company’s disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, the Company’s disclosure controls and procedures are effective to provide reasonable assurance that they would meet their objectives.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended June 30, 2021, that have materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are subject to claims and litigation in the ordinary course of business, but we do not believe that any such claim or litigation is likely to have a material adverse effect on our financial position, results of operations, or cash flows. For additional information regarding legal proceedings, refer to Note 10, Contingencies, included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” within this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
A discussion of our risk factors, which could materially affect our business, financial condition or future results, can be found in the section entitled “Risk Factors,” in our Annual Report on Form 10-K for the twelve months ended December 31, 2020. There have been no significant changes in our risk factors disclosed in our 2020 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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Item 6. Exhibits.
Exhibits Index:
3.1(b)
3.2(a)
10.1*
31.1
31.2
32.1
32.2
101.INS
Inline XBRL Instance Document. (not part of filing)
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (embedded within the Inline XBRL 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).

* Certain exhibits and schedules are omitted pursuant to Item 601(a)(5) of Regulation S-K, and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request.
52

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  HORIZON GLOBAL CORPORATION (Registrant)
/s/ DENNIS E. RICHARDVILLE
Date: August 3, 2021 By:
Dennis E. Richardville
Chief Financial Officer

53
Exhibit 10.1
FOURTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
This Fourth Amendment to Loan and Security Agreement (this “Fourth Amendment”) is made this 19th day of April, 2021, by and among HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“Horizon Americas”), CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and collectively the “Borrowers”), HORIZON GLOBAL CORPORATION, a Delaware corporation (“Parent”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“Horizon Global”) CEQUENT ELECTRICAL PRODUCTS DE MÉXICO, S. de R.L. de C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Electrical MX”), CEQUENT SALES COMPANY DE MÉXICO, S. de R.L. de C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Sales MX”, and together with Parent, Horizon Global and Cequent Electrical MX, each a "Guarantor" and collectively the “Guarantors”; the Borrowers and Guarantors are referred to herein as, collectively, jointly and severally, the “Loan Parties” and each a “Loan Party”), the Lenders party hereto and ENCINA BUSINESS CREDIT, LLC, as agent for the Lenders (in such capacity, the "Agent").
BACKGROUND
A.The Loan Parties, Lenders and the Agent entered into that certain Loan and Security Agreement dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. The Loan Agreement, as in effect immediately prior to the date hereof, and all other Loan Documents executed in connection therewith prior to the date hereof are collectively referred to as the “Existing Financing Agreements”.
B.The Loan Parties have informed the Agent that the Loan Parties desire to make certain modifications to the Loan Agreement, and, subject to the terms and conditions of this Fourth Amendment, the Lenders and the Agent have agreed to amend certain provisions of the Loan Agreement as set forth herein.
NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made a part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:
1.Defined Terms. Capitalized terms used herein but not otherwise defined herein shall have the meanings attributed thereto in the Loan Agreement, as amended by this Fourth Amendment.
2.Amendments to Loan Agreement. Subject to the satisfaction (or waiver) of the conditions precedent specified in Section 4 below:
(a)the Loan Agreement (including the Annexes attached thereto) is hereby amended in its entirety to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the changed pages to the conformed Loan Agreement attached as Annex I hereto; and
(b)Exhibit H to the Loan Agreement, the Form of Borrowing Base Certificate, is hereby amended be deleting said exhibit in its entirety and replacing it with the corresponding exhibit set forth in Annex II attached hereto.
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3.Representations and Warranties. Each Loan Party hereby:
(a)after giving effect to this Fourth Amendment, reaffirms all representations and warranties made to the Lenders and the Agent under the Loan Agreement and all of the other Existing Financing Agreements and represents and warrants that after giving effect to this Fourth Amendment and the transactions contemplated hereby all such representations and warranties are true and correct in all material respects (unless otherwise qualified by materiality or the occurrence of a Material Adverse Effect, in which case such representation and warranty is true and correct in all respects) on and as of the date hereof (or, to the extent any representations or warranties are expressly made solely as of an earlier date, such representations and warranties are true and correct as of such earlier date);
(b)as of the date hereof, reaffirms all covenants contained in the Loan Agreement (as amended hereby) and all of the other Existing Financing Agreements and covenants to comply with all such covenants until the Termination Date; and
(c)as of the date hereof, represents and warrants that:
(i)no Default or Event of Default has occurred and is continuing under the Loan Agreement or any of the other Existing Financing Agreements;
(ii)such Loan Party has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Fourth Amendment;
(iii)the execution, delivery and performance by such Loan Party of this Fourth Amendment have been duly and validly authorized and do not violate such Loan Party's Governing Documents or any law or any material agreement or instrument (including, without limitation, the Term Loan Agreement) or any court order which is binding upon such Loan Party or its property, do not constitute grounds for acceleration of any Indebtedness or obligation under any material agreement or instrument which is binding upon such Loan Party or its property, and do not require the consent of any Person (including, without limitation, the Term Loan Agent);
(iv)this Fourth Amendment has been duly executed and delivered by, and is enforceable against, each of the Loan Parties party hereto, in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles; and
(v)no Loan Party is required to obtain any government approval, consent, or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the execution, delivery or performance of this Fourth Amendment.
4.Conditions Precedent. This Fourth Amendment shall become effective on the date on which the following conditions have been fulfilled to the satisfaction of the Agent (the “Fourth Amendment Effective Date”):
(a)each of the following documents shall be duly executed by all parties thereto and delivered to the Agent, in form and substance satisfactory to the Agent, and each such document shall be in full force and effect:
(i)this Fourth Amendment;

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10176272v2        


(ii)an amended and restated Revolving Note in favor of the Lender; and
(iii)the Amendment Fee Letter.
(b)the Borrowers shall have paid to the Agent all fees due on the Fourth Amendment Effective Date and shall have paid or reimbursed Agent for all of Agent's costs, charges and expenses incurred through the Fourth Amendment Effective Date for which invoices have been presented to the Loan Parties prior to the date hereof payable to the extent required by Section 15.7 of the Loan Agreement (including, without limitation, reasonable and documented attorneys’ fees and expenses incurred in connection with the preparation, negotiation and execution of this Fourth Amendment and the documents provided for herein or related hereto); and
(c)after giving effect to this Fourth Amendment, all representations and warranties contained in Section 3 above shall be true and correct in all respects.
5.Further Assurances. Each Loan Party hereby agrees to take all such actions and to execute and/or deliver to the Agent all such documents, assignments, financing statements and other documents, as the Agent may reasonably require from time to time, to effectuate and implement the purposes of this Fourth Amendment.
6.Reaffirmation of Loan Documents; No Novation. Each Loan Party, as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such Loan Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party and (ii) to the extent such Loan Party granted liens on or security interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed any Obligations, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of such Obligations as amended hereby. Each Loan Party hereby consents to this Fourth Amendment and acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and reaffirmed. The execution of this Fourth Amendment shall not serve to effect a novation of any Indebtedness under the Loan Documents or any other Obligations.
7.No Modification. Except as expressly set forth herein, nothing contained in this Fourth Amendment shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any other Loan Document or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Agent reserves all rights, privileges and remedies under the Loan Documents. Except as amended or consented to hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect. All references in the Loan Documents to the Loan Agreement shall be deemed to be references to the Loan Agreement as modified hereby.
8.Release of Claims. In consideration of the Agent’s and Lenders’ agreements contained in this Fourth Amendment, each Loan Party hereby irrevocably releases and forever discharges the Agent, Lenders and their respective affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and from any and all claims, suits, actions, investigations or proceedings, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Loan Party ever had or now has against the Agent, any Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of the Agent or any other Released Person relating to the Loan Agreement or any other Loan Document on or prior to the date hereof.
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9.Miscellaneous.
(a)Headings; Construction. Section and subsection headings are used in this Fourth Amendment only for convenience and do not affect the meanings of the provisions that they precede.
(b)Modifications. No modification hereof or of any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.
(c)Governing Law; Loan Document. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. FURTHER, THE LAW OF THE STATE OF NEW YORK SHALL APPLY TO ALL DISPUTES OR CONTROVERSIES ARISING OUT OF OR CONNECTED TO OR WITH THIS FOURTH AMENDMENT WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. This Fourth Amendment is a Loan Document and is subject to and has the benefit of all the provisions in the Loan Agreement applicable to Loan Documents.
(d)Counterparts; Fax/Email Signatures. This Fourth Amendment may be executed in any number of counterparts, all of which shall constitute one and the same agreement. This Fourth Amendment may be executed by signatures delivered by facsimile or electronic mail, each of which shall be fully binding on the signing party.

[Signature Pages Follow]




















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10176272v2        


IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to be executed and delivered by their duly authorized officers as of the date first above written.

HORIZON GLOBAL AMERICAS INC.,
as a Borrower

By: /s/ Jay Goldbaum                
Name: Jay Goldbaum
Title: Vice President and Secretary
CEQUENT TOWING PRODUCTS OF CANADA LTD., as a Borrower
By: /s/ Jay Goldbaum                
Name: Jay Goldbaum
Title: Vice President and Secretary    
HORIZON GLOBAL CORPORATION,
as a Guarantor
By: /s/ Jay Goldbaum                
Name: Jay Goldbaum
Title: Vice President and Secretary
HORIZON GLOBAL COMPANY LLC,
as a Guarantor
By: /s/ Jay Goldbaum                
Name: Jay Goldbaum
Title: Vice President and Secretary    

CEQUENT ELECTRICAL PRODUCTS DE MÉXICO, S. DE R.L. DE C.V., as a Guarantor
By: /s/ Jay Goldbaum                
Name:     Jay Goldbaum
Title:     Legal Representative
CEQUENT SALES COMPANY DE MÉXICO, S. DE R.L. DE C.V., as a Guarantor
By: /s/ Jay Goldbaum                
Name:     Jay Goldbaum
Title:     Legal Representative
[Signature Page to Fourth Amendment to Loan and Security Agreement]

ENCINA BUSINESS CREDIT, LLC, as Agent
By: /s/ Brian Hynds
Name:    Brian Hynds
Title:    Authorized Signatory
ENCINA BUSINESS CREDIT SPV, LLC,
as a Lender

By: /s/ Brian Hynds
Name:    Brian Hynds
Title:    Authorized Signatory    


[Signature Page to Fourth Amendment to Loan and Security Agreement]

Annex I
Conformed Loan Agreement
(changed pages only)
See attached.


Conformed through ThirdFourth Amendment






LOAN AND SECURITY AGREEMENT

Dated as of March 13, 2020 by and among
HORIZON GLOBAL AMERICAS INC. AND
CEQUENT TOWING PRODUCTS OF CANADA, LTD.,
any other Borrower party hereto from time to time, as Borrowers,

HORIZON GLOBAL CORPORATION AND HORIZON GLOBAL COMPANY LLC
any other Guarantor party hereto from time to time, as Guarantors,

any other Loan Party party hereto from time to time, as Loan Parties,

the Lenders from time to time party hereto, and
ENCINA BUSINESS CREDIT, LLC,
as Agent










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TABLE OF CONTENTS
Page
1. DEFINITIONS 1
1.1
Certain Defined Terms
1
1.2
Accounting Terms and Determinations
29
1.3
Other Definitional Provisions and References
30
1.4
Interpretation (Québec)
30
1.5
Interpretation (Mexico)
31
2. LOANS 31
2.1
Amount of Loans
31
2.2
Protective Advances; Overadvances
33
2.3
Notice of Borrowing; Manner of Revolving Loan Borrowing
34
2.4
Swingline Loans
35
2.5
Repayments
36
2.6
Prepayments / Voluntary Termination / Application of Prepayments
36
2.7
Obligations Unconditional
37
2.8
Reversal of Payments
38
2.9
Notes
38
2.10
Defaulting Lenders
38
2.11
Appointment of Borrower Representative
39
2.12
Joint and Several Liability
39
2.13
Other Provisions Applicable to Letters of Credit
41
2.14
Separate Letter of Credit Facility
42
3.
INTEREST AND FEES; LOAN ACCOUNT
42
3.1
Interest
42
3.2
Fees
42
3.3
Computation of Interest and Fees
44
3.4
Loan Account; Monthly Accountings
44
3.5
Further Obligations; Maximum Lawful Rate
44
3.6
Certain Provisions Regarding LIBOR Loans; Replacement of Lenders
45
4.
CONDITIONS PRECEDENT
46
4.1
Conditions to Initial Loans/Letters of Credit
46
4.2
Conditions to all Loans and/or Letters of Credit
46
5.
COLLATERAL
47
5.1
Grant of Security Interest
47
5.2
Possessory Collateral
48
5.3
Further Assurances
48
5.4
UCC Financing Statements
49
6.
CERTAIN PROVISIONS REGARDING ACCOUNTS, INVENTORY, COLLECTIONS AND APPLICATIONS OF PAYMENTS
49
6.1
Lock Boxes and Blocked Accounts
49
6.2
Application of Payments
50
6.3
Notification; Verification
50
6.4
Power of Attorney
51
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Loan and Security Agreement

This Loan and Security Agreement (as it may be amended, restated, supplemented or otherwise modified from time to time, this "Agreement") is entered into on March 13, 2020, by and among HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“Horizon Americas”), CEQUENT TOWING PRODUCTS OF CANADA, LTD., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and together with any other Borrower party hereto from time to time, collectively the "Borrowers"), HORIZON GLOBAL CORPORATION, a Delaware corporation (“Parent”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“Horizon Global”) CEQUENT ELECTRICAL PRODUCTS DE MÉXICO, S. DE R.L. DE C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Electrical MX”), CEQUENT SALES COMPANY DE MÉXICO, S. DE R.L. DE C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Sales MX”, and together with Parent, Horizon Global and Cequent Electrical MX, each a “Guarantor” and together with any other Guarantor party hereto from time to time, collectively the “Guarantors”) and together with any other Loan Party party hereto from time to time, as Loan Parties (as defined herein), the Lenders party hereto from time to time and ENCINA BUSINESS CREDIT, LLC, as agent for the Lenders (in such capacity, "Agent"). The Annexes, Exhibits and Schedules to this Agreement, as well as the Perfection Certificate attached to this Agreement, are an integral part of this Agreement and are incorporated herein by reference.

1.DEFINITIONS.

1.1        Certain Defined Terms.

Unless otherwise defined herein, the following terms are used herein as defined in the UCC from time to time: Accounts, Account Debtor, As-Extracted Collateral, Certificated Security, Chattel Paper, Commercial Tort Claims, Debtor, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Financing Statement, Fixtures, General Intangibles, Goods, Health-Care-Insurance Receivables, Instruments, Inventory, Letter-of-Credit Rights, Money, Payment Intangible, Proceeds, Secured Party, Securities Accounts, Security Agreement, Supporting Obligations and Tangible Chattel Paper; provided, however, that (a) as such terms relate to any Collateral of any Canadian Borrower, such terms shall refer to such Collateral as defined in the PPSA, to the extent applicable and (b) as such terms relate to any such Collateral encumbered by or to be encumbered by a Mexican Security Document, such terms shall have the meanings assigned to them in such Mexican Security Document, to the extent applicable.

As used in this Agreement, the following terms have the following meanings:

“ABL Priority Collateral” means as defined in the Intercreditor Agreement (it being understood and agreed that any time the Term Loan Debt is not in effect, the term “ABL Priority Collateral” shall mean all Collateral).

"ABLSoft" means the electronic and/or internet-based system approved by Agent for the purpose of making notices, requests, deliveries, communications and for the other purposes contemplated in this Agreement or otherwise approved by Agent, whether such system is owned, operated or hosted by Agent, any of its Affiliates or any other Person.

1

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“ABN AMRO Factoring Agreement” means the Factoring Agreement, dated as of June 5, 2012, between Westfalia-Automotive GmbH and ABN AMRO Commercial Finance GmbH, as amended, restated, supplemented or otherwise modified from time to time.
"Accounts Advance Rate" means the percentage set forth in Section 1(b)(i) of Annex I.
"Advance Rates" means, collectively, the Accounts Advance Rate and the Inventory Advance Rate.
"Affiliate" means, with respect to any Person, any other Person in control of, controlled by, or under common control with the first Person, and any other Person who has a substantial interest, direct or indirect, in the first Person or any of its Affiliates, including, any officer or director of the first Person or any of its Affiliates (and if that Person is an individual, any member of the immediate family (including parents, siblings, spouse, children, stepchildren, nephews, nieces and grandchildren) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust); provided, that neither Agent, any Lender nor any of their respective Affiliates shall be deemed an "Affiliate" of any Borrower for any purposes of this Agreement. For the purpose of this definition, a "substantial interest" shall mean the direct or indirect legal or beneficial ownership of more than ten (10%) percent of any class of equity or similar interest.
"Agent" has the meaning set forth in the preamble to this Agreement, and includes any successor agent appointed in accordance with Section 14.6.
"Agent Fee Letter" means that certain fee letter agreement dated as of the Closing Date between Agent and Borrowers.
"Agent-Related Persons" means Agent, together with its Affiliates, officers, directors, employees, members, managers, attorneys, and agents.
"Agent Professionals" means attorneys, accountants, appraisers, auditors, business valuation experts, liquidation agents, collection agencies, auctioneers, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by Agent.
"Agreement" and "this Agreement" has the meaning set forth in the preamble to this Agreement.
"Anti-Corruption Laws" means laws, rules, and regulations of any jurisdiction applicable to any Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.
"Applicable Margin" has the meaning set forth in Section 3(a) of Annex I.
"Applicable Percentage" has the meaning set forth in Section 3.2(e)(i).
"Approved Electronic Communication" means each notice, demand, communication, information, document and other material transmitted, posted or otherwise made or communicated by e-mail, facsimile, ABLSoft or any other equivalent electronic service, whether owned, operated or hosted by Agent, any of its Affiliates or any other Person, that any party is obligated to, or otherwise chooses to, provide to Agent pursuant to this Agreement or any other Loan Document, including any


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"Existing Credit Agreement" means the Amended and Restated Loan Agreement, dated as of December 22, 2015, by and among the Obligors (as defined therein), the several banks and other financial institutions or entities party thereto, Bank of America, N.A., as Administrative Agent, and the other parties thereto, as amended, restated, supplemented, otherwise modified from time to time.

"FATCA" means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“Fee Letter” means that certain fee letter, dated the Closing Date, among the Borrowers and the Agent, as amended, restated, supplemented or otherwise modified from time to time.

"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

"Fiscal Year" means the fiscal year of Borrowers which ends on December 31 of each
year.

"Fixed Charge Coverage Ratio" means, for the period in question, the ratio of (a) EBITDA minus unfinanced Capital Expenditures of the Financial Covenant Parties on a consolidated basis for such period, to (b) Fixed Charges for such period.

"Fixed Charges" means, for the period in question, on a consolidated basis, the sum of
(a) all principal payments scheduled to be made during or with respect to such period in cash in respect of Indebtedness of the Financial Covenant Parties, plus (b) all Interest Expense of the Financial Covenant Parties for such period paid in cash attributable to such period, plus (c) all taxes of the Financial Covenant Parties paid in cash for such period and plus (d) all cash distributions (including Permitted Tax Distributions, if applicable), dividends, redemptions and other cash payments made with respect to equity securities or subordinated debt issued by the Financial Covenant Parties, minus (e) all cash investments made in cash by any Loan Party to any Subsidiary of Parent that is not a Loan Party to the extent permitted under clauses (b) and (c) of the definition of Permitted Investment.

"Foreign Subsidiary" means any Subsidiary that is not a Loan Party organized or incorporated under the laws of a jurisdiction of the United States, any State thereof, or the District of Columbia or Canada.
"FRB" means the Board of Governors of the Federal Reserve System or any successor thereto.
"Funding Account" has the meaning set forth in Section 2.3(b).
"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting

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(i) (i) Provided no Default or Event of Default then exists, at any time during the period from and after the Closing Date through the second anniversary of the Closing Date, the Borrower Representative may request from time to time (but subject to the conditions set forth in clause (c)(v) below) that the Maximum Revolving Facility Amount be increased by an amount in the aggregate for all such increases of the Maximum Revolving Facility Amount not to exceed the Available Increase Amount (each such increase, an “Increase”); provided, that (i) any such request for an Increase shall be in a minimum amount of $5,000,000, (ii) Borrowers may make a maximum of fivefour (54) such requests and (iii) after giving effect thereto, the sum of the total of the Increases does not exceed $25,000,000.15,000,000. At the time of sending such notice, the Borrower Representative (in consultation with the Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders).
(ii) The Agent shall notify the Borrower Representative and each Lender of the Lenders’ responses to each request made hereunder.
(iii) Each Lender shall notify the Agent within such time period whether or not it agrees to increase its Revolving Loan Commitment and, if so, whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Revolving Loan Commitment, and no Lender shall be required to so increase its Revolving Loan Commitment hereunder.
(iv) If the Maximum Revolving Facility is increased in accordance with this Section, the Agent, in consultation with the Borrower Representative, shall determine the effective date and the final allocation of such increase. The Agent shall promptly notify the Borrower Representative and the Lenders of the final allocation of such increase and the date of such increase; on such date, the (i) the Maximum Revolving Commitment under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Commitment Increases, and (ii) Annex III shall be deemed modified, without further action, to reflect the revised Revolving Loan Commitment and Pro Rata Share of the Lenders.
(v) Each of the following shall be conditions precedent to any Increase of the Maximum Revolving Facility Amount:
(A) each of the conditions precedent set forth in Section 4.2 is satisfied;
(B) Borrowers shall have paid Agent an additional closing fee specified in the Fee Letter; and
(C) Borrower Representative shall deliver to Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such Increase, and (B) in the case of each Borrower, certifying that, before and after giving effect to such Increase, (1) the representations and warranties contained in Section 7 and the other Loan Documents are true and correct, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, (2) no Default or Event of Default exists and (3) Borrowers are in compliance (on a pro forma basis) with the covenants contained in Section 9 and (ii) legal opinions and documents consistent with those delivered on the Closing Date, to the extent requested by Agent.


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IN WITNESS WHEREOF, each Borrower, each other Loan Party party hereto, Agent and each Lender have signed this Agreement as of the date first set forth above.


Agent:

ENCINA BUSINESS CREDIT, LLC

By:

Name:    __________________________________

Its:    Authorized Signatory

Lenders:

ENCINA BUSINESS CREDIT SPV, LLC


By:

Name:    ___________________________________

Its:    Authorized Signatory    




















Signature Page to Loan and Security Agreement

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Perfection Certificate

See Attached.








































Perfection Certificate Page 1

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Annex I
Description of Certain Terms


1. Loan Limits for Revolving Loans and Letters of Credit
(a) Maximum Revolving Facility Amount
$75,000,00085,000,000 (as increased from time to time in accordance with Section 2.1(c))
(b) Advance Rates
(i) Accounts Advance Rate
a. Eligible Receivables of Investment Grade Account Debtors
Ninety percent (90%); provided, that if Dilution exceeds five percent (5%), Agent may, at its option, (A) reduce such advance rate by the number of full or partial percentage points comprising such excess or (B) establish a Reserve on account of such excess (the "Dilution Reserve").
b. Eligible Receivables of Non-Investment Grade Account Debtors
Eighty-five percent (85%); provided, that if Dilution exceeds five percent (5%), Agent may, at its option, (A) reduce such advance rate by the number of full or partial percentage points comprising such excess or (B) establish a Dilution Reserve on account of such excess.
(ii) Inventory Advance Rate(s)
Lower of cost or net realizable value:
Seventy percent (70% )
NOLV:
Eighty-five percent (85%)
(c) Letter of Credit Limit:
$3,500,000
(d) Inventory Sublimit(s)
i. Overall
$47,500,000
ii. Mexican Inventory Sublimit
$4,000,0005,000,000
iii. In-Transit Sublimit
$5,500,0007,500,000
(e) Reserved
(f) Reserved
2. Availability Block
$5,000,000
3. Interest Rates
(a) Applicable Margins
Four percent (4.00%) per annum in excess of the LIBOR Rate
Three percent (3.00%) per annum in excess of the Base Rate
4. Maximum Days Eligible Accounts
(a) Maximum days after original invoice date for Eligible Accounts other than for Specified Account Debtors
One hundred twenty (120) days

(b) Maximum days after original invoice date for Eligible Accounts of only
Three hundred sixty-five (365) days

Annex I-1

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Annex II

Agent and Lenders shall be provided with each of the documents set forth below at the following times, in form satisfactory to Agent:

I.
Monthly (no later than the 3rd Business Day after the end of each month)
(a) An Account roll-forward with reasonable supporting details as agreed to by the parties with respect to Borrowers’ Accounts (delivered electronically in an acceptable format) and which for the avoidance of doubt will not contain eligibility criteria or otherwise reflect ineligible items. Such reasonable supporting details will include: (i) Account roll-forward; and (ii) Account aging (at the customer level; will tie to the Account roll-forward balance and will include Type – INV, DEB, CRD)
(b) A gross Inventory roll-forward with reasonable supporting details as agreed to by the parties with respect to Borrowers’ gross Inventory (delivered electronically in an acceptable format) and which for the avoidance of doubt will not contain eligibility criteria or otherwise reflect ineligible items. Such reasonable supporting details will include: (i) a gross Inventory roll-forward; and (ii) an Inventory – perpetual listing (will tie to the gross Inventory roll-forward)

II.
Monthly (no later than 15th day after the end of each month)
(c) An Account roll-forward with supporting details supplied from sales journals, collection journals, credit registers and any other records, with respect to Borrowers' Accounts (delivered electronically in an acceptable format)
(d) Notice of all claims, offsets, or disputes asserted by Account Debtors with respect to Borrowers' Accounts
(e) A detailed Inventory perpetual report with respect to Borrowers' Inventory, including a listing by category and location of Inventory (delivered electronically in an acceptable format)
(f) A summary and a detailed aging, by total, of Borrowers' Accounts, together with reconciliation to the weekly Borrowing Base submitted closest to such date and support documentation for any reconciling items noted (delivered electronically in an acceptable format)
(g) A summary aging, by vendor, of each Loan Party's accounts payable and a listing by vendor, of any held and/or outstanding checks (delivered electronically in an acceptable format)
(h) A monthly Account roll-forward with respect to Borrowers' Accounts, in a format acceptable to Agent in its discretion, tied to the beginning and ending Account balances of Borrowers' month-end accounts receivable aging (delivered electronically in an acceptable format)
(i) A reconciliation of Accounts summary aging and trade accounts payable summary aging to each of (i) Borrowers'


Annex II-1

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Annex III


Revolving Loan Commitments1


Encina Business Credit SPV, LLC
$75,000,00085,000,000
Total
$75,000,00085,000,000


































_____________________________
1 As increased from time to time in accordance with Section 2.1(c).


Annex III-1

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Exhibit A


[FORM OF] NOTICE OF BORROWING


[letterhead of Borrower Representative]


ENCINA BUSINESS CREDIT, LLC,
as Agent
123 N Wacker Suite 2400
Chicago, IL 60606
Attention: John Whetstone

Ladies and Gentlemen:

Please refer to the Loan and Security Agreement dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") among the undersigned, as Borrower Representative, the Borrowers (as defined therein) the Loan Party (as defined therein) party thereto, the Lenders party thereto and ENCINA BUSINESS CREDIT, LLC, as Agent for the Lenders. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement. This notice is given pursuant to Section 2.3 of the Loan Agreement and constitutes a representation by Borrower Representative, for itself and on behalf of each Borrower, that the conditions specified in Section 4 of the Loan Agreement have been satisfied. Without limiting the foregoing, (i) each of the representations and warranties set forth in the Loan Agreement and in the other Loan Documents is true and correct in all respects as of the date hereof (or to the extent any representations or warranties are expressly made solely as of an earlier date, such representations and warranties shall be true and correct as of such earlier date), both before and after giving effect to the Loans requested hereby, and (ii) no Default or Event of Default is in existence, both before and after giving effect to the Loans requested hereby.

Borrower Representative hereby requests a borrowing, on behalf of each Borrower, under the Loan Agreement as follows:

The aggregate amount of the proposed borrowing is $[______________]. The requested borrowing date for the proposed borrowing (which is a Business Day) is [______________], [____].

Borrower Representative has caused this Notice of Borrowing to be executed and delivered by its officer thereunto duly authorized on [_____________].


HORIZON GLOBAL AMERICAS INC.,
as Borrower Representative

By:_______________________________________
Title:

Ex.A-1

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Exhibit B


CLOSING CHECKLIST


[Attached]









































Ex. B-1

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Exhibit C


CLIENT USER FORM

ENCINA BUSINESS CREDIT, LLC
ABLSoft – Client User Form


Borrowers Names: Horizon Global Americas Inc.
Cequent Towing Products of Canada, Ltd.

Borrower Number: HORIZON101

Loan and Security Agreement Date: March 13, 2020

I, being an authorized signer of the above borrower, as Borrower Representative (the "Borrower"), refer to the above Loan and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") between the Borrowers named above, the other Loan Parties party thereto, the Lenders party thereto and ENCINA BUSINESS CREDIT, LLC, as Agent. This is the Client User Form, used to determined client access to ABLSoft. Terms defined in the Loan Agreement have the same meaning when used in this Client User Form.
Being duly authorized by Borrower Representative, on behalf of Borrowers, I confirm that the following individuals have been authorized by Borrower to have access to ABLSoft:

First Name
Last Name
Email Address
Phone Number
HORIZON GLOBAL AMERICAS INC., as Borrower Representative

By_________________________
Name:______________________
Title:_______________________

Ex. C-1

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Exhibit D


AUTHORIZED ACCOUNTS FORM

ENCINA BUSINESS CREDIT, LLC
Authorized Accounts Form


Borrowers Names: Horizon Global Americas Inc.
Cequent Towing Products of Canada, Ltd.

Borrower Number: HORIZON101

Loan and Security Agreement Date: March 13, 2020

I, being an authorized signer of HORIZON GLOBAL AMERICAS INC., Delaware corporation, as Borrower Representative, refer to the above Loan and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") between the Borrower named above, the Lenders party thereto and ENCINA BUSINESS CREDIT, LLC, as agent ("Agent"). This is the Authorized Accounts Form, referring to authorized operating bank accounts of Borrower. Terms defined in the Loan Agreement have the same meaning when used in this Authorized Accounts Form.

Being duly authorized by Borrower Representative, I confirm that the following operating bank accounts of Borrowers are the accounts into which the proceeds of any Loan may be paid:

Bank
Routing Number
Account number
Account name

HORIZON GLOBAL AMERICAS INC., as Borrower Representative

By:_____________________________
Authorized Signer
Name: ______________________
Title:________________________


Ex. D-1

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Exhibit E

[FORM OF] ACCOUNT DEBTOR NOTIFICATION

[Date]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

[Account Debtor]
[Address]

Re: Loan Transaction with ENCINA BUSINESS CREDIT, LLC

Ladies and Gentlemen:

Please be advised that we have entered into certain financing arrangements (along with any other financing agreements that we may enter into with Agent in the future, the "Financing Arrangements") with ENCINA BUSINESS CREDIT, LLC ("Agent"), as Agent for certain Lenders, pursuant to which we have granted to Agent a security interest in, among other things, any and all Accounts and Chattel Paper (as those terms are defined in the Uniform Commercial Code) owing by you to us, whether now existing or hereafter arising.
You are authorized and directed to respond to any inquiries that Agent may direct to you from time to time pertaining to the validity, amount and other matters relating to such Accounts and Chattel Paper. In the event that Agent requests that payment for any Accounts and/or Chattel Paper be made directly to Agent, you are hereby authorized and directed to comply with such instructions, without further authorization or instruction from us.

This authorization and directive shall be continuing and irrevocable until Agent advises you, in writing, that this authorization is no longer in force.

Very truly yours,
[BORROWER]


By: _____________________________
Name: ________________________
Its:


cc: ENCINA BUSINESS CREDIT, LLC
as Agent
123 N Wacker Suite 2400
Chicago, IL 60606
Attention: John Whetstone



Ex. E-1

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Exhibit F

[FORM OF] COMPLIANCE CERTIFICATE

[letterhead of Parent]

To: ENCINA BUSINESS CREDIT, LLC,
as Agent
123 N Wacker Suite 2400
Chicago, IL 60606
Attention: John Whetstone

Re: Compliance Certificate dated _______________

Ladies and Gentlemen:

Reference is made to that certain Loan and Security Agreement dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") by and among ENCINA BUSINESS CREDIT, LLC ("Agent"), the Lenders party thereto, Horizon Global Americas Inc., a Delaware corporation (“Horizon Americas”), Cequent Towing Products of Canada, Ltd., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and collectively, the “Borrowers”) and each of the other Loan Parties (as defined therein) party thereto. Capitalized terms used in this Compliance Certificate have the meanings set forth in the Loan Agreement unless specifically defined herein.

Pursuant to Section 7.15 of the Loan Agreement, the undersigned Authorized Officer of Parent hereby certifies on behalf of each Borrower (solely in his capacity as an officer of Parent and not in his individual capacity) that:

1. The financial statements of Borrowers for the ___ -month period ending _____________ attached hereto have been prepared in accordance with GAAP and fairly present the financial condition of Borrowers for the periods and as of the dates specified therein (it being understood that the obligation to furnish the foregoing to the Agent shall be deemed to be satisfied in respect of any fiscal quarter of the Parent by the filing of the Parent’s [annual][quarterly] report on Form [10-K][10-Q] for such [fiscal year][fiscal quarter] with the Securities and Exchange Commission to the extent permitted by the Loan Agreement).

2. As of the date hereof, there does not exist any Default or Event of Default.

3. Borrowers are in compliance with the applicable financial covenant contained in Section 9.2 of the Loan Agreement for the periods covered by this Compliance Certificate. Attached hereto are statements of all relevant facts and computations in reasonable detail sufficient to evidence Borrowers’ compliance with such financial covenant, which computations were made in accordance with GAAP.

4. [Except as attached hereto, the Loan Parties have not acquired, or otherwise registered, any registered Intellectual Property since the last quarter.]2
IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this __ day of _______________, ______.
____________________
2 To be included in all quarter-end certificates.
Ex. F-1

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Exhibit G

[FORM OF] ASSIGNMENT AND ASSUMPTION

Dated [___________ ___, 20_]

Reference is made to the Loan and Security Agreement dated as of March 13, 2020 among Horizon Global Americas Inc., a Delaware corporation (“Horizon Americas”), Cequent Towing Products of Canada, Ltd., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and collectively the “Borrowers” ) , the other Loan Parties party thereto, the lenders party thereto as "Lenders" and Encina Business Credit, LLC, as agent ("Agent") for the Lenders (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement"). Terms defined in the Loan Agreement are used herein as therein defined.

[____________], solely in its capacity as a Lender under the Loan Agreement (the "Assignor"), and [__________] (the "Assignee") agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, without recourse, representation or warranty (except as expressly set forth elsewhere herein), and the Assignee hereby purchases and assumes from the Assignor, on the Effective Date (as defined below), an interest as set forth in Exhibit A attached hereto (the "Assigned Interest") in and to (i) all of the Assignor's right, title and interest with respect to the Loans set forth in Exhibit A, (ii) all of the Assignor's right, title and interest with respect to the [Revolving Loan Commitment] of Assignor as set forth in Exhibit A and (iii) to the extent related thereto, all of the Assignor's rights and obligations, solely as a Lender, under the Loan Agreement and any other Loan Document (including, without limitation, (A) the outstanding principal amount of the Loans made by the Assignor and assigned to Assignee hereunder, and (B) the Assignor's pro rata share of the obligations owing by each Loan Party under the Loan Agreement and the Loan Documents). The Assigned Interest (expressed as a percentage) in the Loans and the [Revolving Loan Commitment] is set forth in Exhibit A.

2. The Assignor (i) represents and warrants as of the date hereof that [its Revolving Loan Commitment, or if its Revolving Loan Commitment shall have been terminated, the outstanding principal amount of its Revolving Loans], is set forth in Exhibit A (without giving effect to assignments thereof which have not yet become effective); (ii) represents and warrants that it is the legal and beneficial owner of the interest it is assigning hereunder; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by or in connection with the Loan Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other Loan Document, or any other instrument or document furnished pursuant thereto; and (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under the Loan Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto.

3. The Assignee represents and warrants that it has become a party hereto solely in reliance upon its own independent investigation of the financial and other circumstances surrounding the Loan Parties, the Collateral, the Loans, the Revolving Loan Commitments and all aspects of the transactions evidenced by or referred to in the Loan Documents, or has otherwise satisfied itself thereto, and that it is not relying upon any representation, warranty or statement (except any such representation, warranty or statement expressly set forth in this Assignment and Assumption) of the Assignor in connection with the assignment made under this Assignment and Assumption. The Assignee further acknowledges that the Assignee will, independently and without reliance upon Agent, the Assignor or any other Lender and based upon the


Ex. G-1


10068325v7
10176250v4



IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Assignment and Assumption as of the Effective Date.


[ASSIGNOR]


By_______________________________________
Name ____________________________________
Title
NOTICE ADDRESS AND PAYMENT
INSTRUCTIONS FOR ASSIGNOR
Telephone No. (___) ___-____
Telecopy No. (___)___-____

[ASSIGNEE]


By_______________________________________
Name ____________________________________
Title
NOTICE ADDRESS AND PAYMENT
INSTRUCTIONS FOR ASSIGNEE
Telephone No. (___)___-____
Telecopy No. (___)___-____








Ex. G-4

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EXHIBIT A



Borrowers: Horizon Global Americas Inc.
Cequent Towing Products of Canada, Ltd.


Description of Loan Agreement: Loan and Security Agreement, dated as of March 13, 2020 among Borrowers, the other Loan Parties party thereto, the lenders party thereto as "Lenders" and Encina Business Credit, LLC as agent ("Agent") for the Lenders (as amended, restated, supplemented or otherwise modified from time to time).

Assigned Interests:

Assignor's Interest Prior to Assignment
Assigned Interests
Assignor's Remaining Interest After Assignment
Assignee's Pro Rata Shares
Revolving Loans and Revolving Loan Commitments

























Ex. H-1

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10176250v4



Exhibit H

[FORM OF] BORROWING BASE CERTIFICATE

See attached.












































Ex. H-1

10068325v7
10176250v4


Schedule 7.32

Post-Closing Matters













































10068325v7
10176250v4


Annex II

Updated Form of Borrowing Base Certificate
See attached.





10068325v7
10176250v4

Exhibit 31.1
Certification
Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) and (B))

I, Terrence G. Gohl, certify that:
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.
Date: August 3, 2021
/s/ TERRENCE G. GOHL
Terrence G. Gohl
Chief Executive Officer



Exhibit 31.2
Certification
Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) and (B))

I, Dennis E. Richardville, certify that:
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.
Date: August 3, 2021
/s/ DENNIS E. RICHARDVILLE
Dennis E. Richardville
Chief Financial Officer



Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Global Corporation (the "Company") on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Terrence G. Gohl, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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.
Date: August 3, 2021
/s/  TERRENCE G. GOHL
Terrence G. Gohl
Chief Executive Officer



Exhibit 32.2
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Global Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dennis E. Richardville, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes‑Oxley Act of 2002, that to the best of my knowledge:
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.
Date: August 3, 2021
/s/  DENNIS E. RICHARDVILLE
Dennis E. Richardville
Chief Financial Officer