1 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Horizon Global Fourth Quarter 2015 Earnings Presentation March 1, 2016
2 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Safe Harbor Statement Forward-Looking Statements This presentation may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained herein 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 Company's leverage; liabilities imposed by the Company's debt instruments; market demand; competitive factors; supply constraints; material and energy costs; technology factors; litigation; government and regulatory actions; the Company's accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company's business and industry; the spin-off from TriMas Corporation; and other risks that are discussed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. The risks described herein 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. We caution readers not to place undue reliance on such statements, which speak only as of the date hereof. 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 hereof or to reflect the occurrence of unanticipated events. Non-GAAP Financial Measures In this presentation, certain non-GAAP financial measures may be used. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure may be found at the end of this presentation. Additional information is available at www.horizonglobal.com.
3 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Business Update • Mark Zeffiro Financial Results • David Rice Outlook • Mark Zeffiro Q&A Horizon Global Fourth Quarter 2015
4 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN • eCommerce growing • Globalization of Original Equipment (OE) • Evolving customer landscape • Long-term technology upgrade Market trends • 100% improvement in adjusted earnings per share(1) • Adjusted operating profit margin(1) improved 440 bps to 3.3% • Operating cash flow of $27 million YTD • Net sales flat on constant currency basis(2) Strong fourth quarter results Trends and Results Fourth Quarter 2015 (1) Excluding “Special Items” for each period, which are provided in the Appendix, “Company and Business Segment Financial Information” (2) Reconciliation provided in the Appendix, “Constant Currency Reconciliation”
5 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Three Financial Priorities for Value Creation S I G N I F I C AN T O P P O R T U N I T Y F O R VAL U E C R E AT I O N 10% & 10% Less than 2x 3-5% Organic Foster culture focused on operational excellence Execute six major margin initiatives Leverage past investments in low-cost manufacturing Integrate Cequent Americas organization Enhance multi-generational product planning Margin accretive acquisitions Commitment to reducing debt and increasing profitability Cash flow supports deleveraging Recently completed capex cycle Consistent cash flow generation through business cycle Working capital efficiency improvement Acquire well-run companies Leverage product portfolio and global footprint Expand existing distribution channels Develop new distribution channels, including eCommerce Leverage relationships with OEs across globe Expand sales to higher-growth emerging markets Prioritize new product development Bolt-on acquisitions drive non-organic growth IMPROVE MARGINS IMPROVE CAPITAL STRUCTURE DRIVE SALES GROWTH
6 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Business Update Six Months Ended December 31, 2015 S H O W I N G P R O G R E S S O N A L L T H R E E P R I O R I T I E S 10% & 10% Less than 2x 3-5% Organic Achieved adjusted segment operating margin(1) of 9.3% South Africa gaining operating leverage Juarez and Tekonsha facility closures near completion Business consolidations on track to result in savings of $5 million in 2016 EPS on an adjusted basis of $0.50(1) Improved leverage ratio by 0.5x to 3.3x(3) Converted YTD adjusted net income(1) to operating cash at 164% versus 152% in 2014 $24 million in cash on balance sheet after principal and interest payments $0 outstanding on revolver at 12/31/15 Outstanding debt reduced by $21.6M Net sales on constant currency basis(2) up 2% Americas aftermarket business rebounding Global OE business growing, with more than 20 wins globally Retail partners reduced inventory Continued FX headwinds Six Months Ended 12/31/15 Six Months Ended 12/31/15 Six Months Ended 12/31/15 (1) Excluding “Special Items” for each period, which are provided in the Appendix, “Company and Business Segment Financial Information” and “Company and Business Segment Financial Information – Six Months” (2) Reconciliation provided in the Appendix, “Constant Currency Reconciliation” (3) Reconciliation provided in the Appendix, “LTM Bank EBITDA as Defined in Credit Agreement”
7 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Initiative Objective Current Action/Result Project Realization Plant Performance Execute plant level productivity initiatives 5% on lower hours Consolidation of the Americas Fully integrate as one, lean business Finalize Tekonsha Distribution study Europe, Africa, Latin America Performance Realize accretive level of performance on YTD basis South Africa up 1600 bps Europe up 140 bps Brazil down 120 bps Juarez Closure Consolidate production in Reynosa to achieve annual savings of $4.5M Heavy duty moved Trailer products move/sourcing Sourcing Initiatives Optimize supply base through increased integration Consolidation and price negotiation in process Brand Consolidation Enhanced value from “shoulder” brands Rationalize first three brands in 2016 Horizon – Margin Dashboard
8 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Business Update • Mark Zeffiro Financial Results • David Rice Outlook • Mark Zeffiro Q&A Horizon Global Fourth Quarter 2015
9 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Fourth Quarter 2015 (Unaudited, excluding Special Items, dollars in millions, except per share amounts) (1) Segment operating profit, excluding “Special Items” refers to the sum of Cequent Americas and Cequent APEA. “Special Items” for each period are provided in the Appendix, “Company and Business Segment Financial Information”. Income and diluted earnings per share excluding “Special Items” for each period are provided in the Appendix, “Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures”. (2) Reconciliation provided in the Appendix, “Constant Currency Reconciliation” (3) Reconciliation provided in the Appendix, “LTM Bank EBITDA as Defined in Credit Agreement” Quarter Highlights • Net sales remained flat on constant currency basis(2) compared to prior year • Currency translation headwinds of approximately $6.6M, about half in Australian dollar • Segment operating profit(1) improvement of 750 bps reflects margin improvement initiatives and impacts of lower costs • Operating cash flow remained strong while funding $7.9M of interest costs • Leverage ratio of 3.3x(3) a sequential decline from 3.6x in Q3 2015 Q4 2015 QTD Q4 2014 QTD Variance Revenue $121.3 $127.6 (4.9%) Segment operating profit $7.8 ($0.4) Fav Excl. Total Special Items (1) , segment operating profit would have been: $9.9 $0.9 Fav Excl. Total Special Items (1) , segment operating profit margin would have been: 8.2% 0.7% 750 bps Corporate expense $5.9 $2.2 Loss ($1.7) ($3.1) 43.5% Excl. Total Special Items (1) , loss would have been: ($0.0) ($2.1) 99.5% Diluted earnings per share ($0.10) ($0.17) 43.5% Excl. Total Special Items (1) , diluted earnings per share would have been: $0.00 ($0.12) 100.0% Operating Cash Flow - YTD $26.9 $28.0 (3.9%) Total Debt $188.7 $0.8 Leverage ratio (covenant 5.25x) 3.3x(3)
10 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Full-Year 2015 (Unaudited, excluding Special Items, dollars in millions, except per share amounts) Full-Year Highlights: • Net sales decrease of 1.5% on constant currency basis(2) from prior year • Currency translation headwinds of approximately $27M, about half in Australian dollars • Segment operating profit improvement(1) of 140 bps reflects margin improvement initiatives and effects of lower input costs in the Americas segment • Corporate costs not comparable between periods (1) Segment operating profit, excluding “Special Items” refers to the sum of Cequent Americas and Cequent APEA. “Special Items” for each period are provided in the Appendix, “Company and Business Segment Financial Information”. Income and diluted earnings per share excluding “Special Items” for each period are provided in the Appendix, “Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures”. (2) Reconciliation provided in the Appendix, “Constant Currency Reconciliation” 2015 2014 Variance Revenue $575.5 $611.8 (5.9%) Segment operating profit $37.9 $38.5 (1.6%) Excl. Total Special Items (1) , segment operating profit would have been: $48.4 $42.9 12.8% Excl. Total Special Items (1) , segment operating profit margin would have been: 8.4% 7.0% 140 bps Corporate expense $18.3 $14.0 Income $8.3 $15.4 (45.9%) Excl. Total Special Items (1) , income would have been: $16.4 $18.5 (11.1%) Diluted earnings per share $0.46 $0.85 (46.1%) Excl. Total Special Items (1) , diluted earnings per share would have been: $0.90 $1.02 (11.8%)
11 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Cequent Americas Fourth Quarter 2015 Q4 Results Sales • Net sales decreased 2.0% on a constant currency basis(2) as compared with Q4 2014 • Retail declined $2.3M due to inventory reduction • Aftermarket strong in the quarter; up $2.2M • Industrial challenges in energy and agriculture markets continue Operating Profit(1) • Operating profit improved to 9.1% of sales from 0.6% in Q4 2014 • Reynosa 5% more productive than 2014 YTD on lower hours • Favorable margin impact from lower input costs • Americas integration continues to provide benefits Focus • Continuing emphasis on manufacturing productivity • Execution of Americas integration; completion of existing and adding new projects • Manufacturing consolidation 7.8% (Unaudited, dollars in millions) Operating Profit (1) Q4-15 Q4-14 $8.0 $0.5 9.1% 0.6%Fav (1) Excluding “Special Items” for each period, which are provided in the Appendix, “Company and Business Segment Financial Information” (2) Reconciliation provided in the Appendix, “Constant Currency Reconciliation” Net Sales Q4-15 Q4-14 $87.3 $90.0 (3.0%)
12 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Cequent APEA Fourth Quarter 2015 Q4 Results Sales • Net sales increased $2.0M to $39.6M on a constant currency basis(2) • Growth in Australia, New Zealand, Germany and the UK in local currencies • South Africa grew 51% in sales for the year • Launches in Thailand not yet at full volume, but growing • Unfavorable currency of $5.6 million Operating Profit(1) • Realizing benefits in SG&A due to prior cost reduction efforts, primarily in Australia • Operational improvements and tooling recovery offset Thailand volume • Strengthening Thai baht and U.S. dollar add pressure to input costs Focus • Increasing emphasis on new program launches • Increase manufacturing productivity • Managing growth in South Africa • Continued commercial development/integration focus for Germany and UK (1) Excluding “Special Items” for each period, which are provided in the Appendix, “Company and Business Segment Financial Information” (2) Reconciliation provided in the Appendix, “Constant Currency Reconciliation” 7.8% (Unaudited, dollars in millions) Net Sales Q4-15 Q4-14 $34.0 $37.6 (9.5%) Operating Profit (1) Q4-15 Q4-14 $2.0 0.9% 5.7% $0.4 Fav
13 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN • Payment of $9.6M to former parent under tax sharing agreement • Interest payments of $7.9M under new capital structure • Amortization payments of $5.0M under term loan Capitalization (Unaudited, dollars in millions) Strong cash generation driving leverage reduction Significant 2015 Cash Uses Leverage Ratio Q2 2015 Q4 2015 3.8 3.3 (0.5) Debt Q2 2015 Q4 2015 $210.4 $188.7 $(21.6) Cash & Availability Q2 2015 Q4 2015 $94.5 $19.5 $114.0 (1) (1) Reconciliation provided in the Appendix, “LTM Bank EBITDA as Defined in Credit Agreement”
14 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Business Update • Mark Zeffiro Financial Results • David Rice Outlook • Mark Zeffiro Q&A Horizon Global Fourth Quarter 2015
15 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Long Term Strategic Goals STRATEGIC GOALS
16 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Driven to Deliver Utilize forward-thinking technology to develop and deliver best-in-class products for our users, engage with our employees and realize value creation for our shareholders Socially Responsible Respectful and Open Team Integrity and Accountability Data and Results Driven Enriching lives through great products Global Reach Product Development Engine Multi-Channel Expertise Best-in-Class Manufacturing and Sourcing Cost Platform Talented Experienced Management Team Positioned to drive value for: ALL STAKEHOLDERS ALL CUSTOMERS ALL EMPLOYEES
17 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN • 3-5% in constant currency Revenue Growth • >100 basis points Segment Operating Profit Growth • >100% Operating Cash Conversion (1) • Full-year interest costs of ~$16M Interest Expense • ~2.5% of sales Capital Expenditures • 20% planning rate; $1.2M of UTB benefit Tax Rate 2016 Guidance Demonstrates progress on all three key financial priorities (1) Operating cash flow as a percent of net income. I n i t i a t i ve s o f fs e t n o r ma l i z ed ta x an d i n te re s t co s ts
18 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Delivered significant profit improvement in 2015 Improved cash conversion in 2015 Guidance demonstrates continued progress on key financial priorities Team is engaged and aligned around key financial priorities Wrap-up Aligned to deliver shareholder value
19 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Business Update • Mark Zeffiro Financial Results • David Rice Outlook • Mark Zeffiro Q&A Horizon Global Fourth Quarter 2015
20 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Q&A
21 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Appendix – Q4 2015
22 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Second Half 2015 (Unaudited, excluding Special Items, dollars in millions, except per share amounts) (1) Segment operating profit, excluding “Special Items” refers to the sum of Cequent Americas and Cequent APEA. “Special Items” for each period are provided in the Appendix, “Company and Business Segment Financial Information – Six Months”. 2nd half 2015 2nd half 2014 Variance Revenue $274.6 $285.5 (3.8%) Segment operating profit $20.2 $11.3 78.9% Excl. Total Special Items (1) , segment operating profit would have been: $25.4 $13.3 91.7% Excl. Total Special Items (1) , segment operating profit margin would have been: 9.3% 4.6% 460 bps Corporate expense $9.7 $6.0 Income $4.7 $2.1 118.2% Excl. Total Special Items (1) , income would have been: $9.0 $3.7 144.3% Diluted earnings per share $0.25 $0.12 110.9% Excl. Total Special Items (1) , diluted earnings per share would have been: $0.50 $0.20 150.0%
23 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Condensed Consolidated Balance Sheet (Dollars in thousands) December 31, December 31, 2015 2014 Assets Current assets: Cash and cash equivalents............................................................. 23,520$ 5,720$ Receivables, net............................................................................ 63,050 63,840 Inventories.................................................................................... 119,470 123,530 Prepaid expenses and other current assets..................................... 5,120 5,690 Total current assets.................................................................... 211,160 198,780 Property and equipment, net.............................................................. 45,890 55,180 Goodwill........................................................................................... 4,410 6,580 Other intangibles, net........................................................................ 56,020 66,510 Deferred income taxes...................................................................... 4,500 2,200 Other assets..................................................................................... 9,600 10,250 Total assets............................................................................... 331,580$ 339,500$ Liabilities and Shareholders' Equity Current liabilities: Current maturities, long-term debt................................................... 10,130$ 460$ Accounts payable.......................................................................... 78,540 81,980 Accrued liabilities.......................................................................... 39,820 37,940 Total current liabilities................................................................. 128,490 120,380 Lo g-term debt................................................................................. 178,610 300 Deferred income taxes...................................................................... 2,910 4,640 Other long-term liabilities................................................................... 19,570 25,990 Total liabilities............................................................................ 329,580 151,310 Total shareholders' equity........................................................... 2,000 188,190 Total liabilities and shareholders' equity....................................... 331,580$ 339,500$
24 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Condensed Consolidated Statement of Income (Dollars in thousands, except for per share amounts) Three months ended Twelve months ended 2015 2014 2015 2014 Net sales......................................................................... 121,270$ 127,570$ 575,510$ 611,780$ Cost of sales.................................................................... (89,040) (99,970) (432,470) (463,690) Gross profit.................................................................. 32,230 27,600 143,040 148,090 Selling, general and administrative expenses...................... (30,070) (29,560) (121,350) (122,890) Net loss on dispositions of property and equipment............. (270) (680) (2,120) (740) Operating profit (loss)................................................... 1,890 (2,640) 19,570 24,460 Other expense, net: Interest expense........................................................... (4,220) (210) (8,810) (720) Other expense, net....................................................... (710) (860) (3,740) (3,150) Other expense, net.................................................... (4,930) (1,070) (12,550) (3,870) Income (loss) before income tax........................................ (3,040) (3,710) 7,020 20,590 Income tax benefit (expense)............................................ 1,310 650 1,280 (5,240) Net income (loss)............................................................. (1,730)$ (3,060)$ 8,300$ 15,350$ Net income (loss) per share: Basic........................................................................... $ (0.10) $ (0.17) $ 0.46 $ 0.85 Diluted......................................................................... $ (0.10) $ (0.17) $ 0.46 $ 0.85 Weighted average common shares outstanding: Basic........................................................................... 18,071,076 18,062,027 18,064,491 18,062,027 Diluted......................................................................... 18,071,076 18,062,027 18,160,852 18,113,416 December 31, December 31, (unaudited)
25 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN (Dollars in thousands) Condensed Consolidated Statement of Cash Flow 2015 2014 Cash Flows from Operating Activities: Net income....................................................................................... 8,300$ 15,350$ Adjustments to reconcile net income to net cash used for operating activities: Loss on dispositions of property and equipment............................... 2,120 740 Depreciation................................................................................. 9,740 11,380 Amortization of intangible assets..................................................... 7,340 7,550 Amortization of original issuance discount and debt issuance costs... 830 - Deferred and other income taxes.................................................... (4,920) (2,720) Non-cash compensation expense................................................... 2,530 2,660 Increase in receivables.................................................................. (5,460) (3,940) Increase in inventories.................................................................. (30) (210) Decrease in prepaid expenses and other assets.............................. 140 1,080 Increase (decrease) in accounts payable and accrued liabilities....... 5,870 (4,440) Other, net..................................................................................... 450 560 Net cash provided by for operating activities................................ 26,910 28,010 Cash Flows from Investing Activities: Capital expenditures...................................................................... (8,320) (11,440) Net proceeds from disposition of property and equipment................. 1,510 330 Net cash used for investing activities........................................... (6,810) (11,110) Cash Flows from Financing Activities: Proceeds from borrowings on credit facilities.................................. 120,380 175,560 Repayments of borrowings on credit facilities.................................. (119,930) (175,900) Proceeds from Term B Loan, net of issuance costs......................... 192,820 - Repayments of borrowings on Term B Loan.................................... (5,000) - Proceeds from ABL Revolving Debt, net of issuance costs............... 57,120 - Repayments of borrowings on ABL Revolving Debt.......................... (59,430) - Cash dividend paid to former parent............................................... (214,500) - Net transfers (to) from former parent.............................................. 27,630 (18,720) Net cash used for financing activities.......................................... (910) (19,060) Effect of exchange rate changes on cash (1,390) - Cash and Cash Equivalents: Increase for the period.................................................................. 17,800 (2,160) At beginning of period................................................................... 5,720 7,880 At end of period........................................................................ 23,520$ 5,720$ Supplemental disclosure of cash flow information: Cash paid for interest................................................................ 7,870$ 590$ Twelve months ended December 31,
26 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Three months ended 2015 2014 2015 2014 Net sales.................................................................................................. 87,280$ 90,010$ 429,310$ 446,670$ Operating profit (loss)............................................................................... 5,900 (290) 30,300 30,810 Special Items to consider in evaluating operating profit: Severance and business restructuring costs........................................... 2,050 790 7,580 3,590 Loss on software disposal...................................................................... - - 1,870 Excluding Special Items, operating profit would have been.................... 7,950$ 500$ 39,750$ 34,400$ Net sales.................................................................................................. 33,990$ 37,560$ 146,200$ 165,110$ Operating profit (loss)............................................................................... 1,900$ (120)$ 7,550$ 7,650$ Special Items to consider in evaluating operating profit: Severance and business restructuring costs........................................... 50$ 470$ 1,110$ 850$ Excluding Special Items, operating profit would have been.................... 1,950$ 350$ 8,660$ 8,500$ Operating profit (loss)............................................................................... 7,800$ (410)$ 37,850$ 38,460$ Special Items to consider in evaluating operating profit: Severance and business restructuring costs........................................... 2,100$ 1,260$ 8,690$ 4,440$ Loss on software disposal...................................................................... -$ -$ 1,870$ -$ Excluding Special Items, operating profit would have been.................... 9,900$ 850$ 48,410$ 42,900$ Operating loss.......................................................................................... (5,910)$ (2,230)$ (18,280)$ (14,000)$ Net sales.................................................................................................. 121,270$ 127,570$ 575,510$ 611,780$ Operating profit (loss)............................................................................... 1,890$ (2,640)$ 19,570$ 24,460$ Total Special Items to consider in evaluating operating profit........................ 2,100$ 1,260$ 10,560$ 4,440$ Excluding Special Items, operating profit (loss) would have been........... 3,990$ (1,380)$ 30,130$ 28,900$ Total Company Cequent Americas Cequent APEA Corporate Expenses Operating Segments December 31, December 31, Twelve months ended Company and Business Segment Financial Information (Unaudited, dollars in thousands)
27 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Six months ended 2015 2014 2015 2014 Net sales.................................................................................................. 225,490$ 243,080$ 203,820$ 203,590$ Operating profit........................................................................................ 13,700 22,550 16,600 8,260 Special Items to consider in evaluating operating profit: Severance and business restructuring costs........................................... 2,470 2,440 5,110 1,150 Loss on software disposal...................................................................... 1,870 - - - Excluding Special Items, operating profit would have been.................... 18,040$ 24,990$ 21,710$ 9,410$ Net sales.................................................................................................. 75,410$ 83,270$ 70,790$ 81,840$ Operating profit........................................................................................ 3,920$ 4,630$ 3,630$ 3,020$ Special Items to consider in evaluating operating profit: Severance and business restructuring costs........................................... 1,060$ -$ 50$ 850$ Excluding Special Items, operating profit would have been.................... 4,980$ 4,630$ 3,680$ 3,870$ Operating profit........................................................................................ 17,620$ 27,180$ 20,230$ 11,280$ Special Items to consider in evaluating operating profit: Severance and business restructuring costs........................................... 3,530$ 2,440$ 5,160$ 2,000$ Loss on software disposal...................................................................... 1,870$ -$ -$ -$ Excluding Special Items, operating profit would have been.................... 23,020$ 29,620$ 25,390$ 13,280$ Operating loss.......................................................................................... (8,550)$ (7,950)$ (9,730)$ (6,050)$ Net sales.................................................................................................. 300,900$ 326,350$ 274,610$ 285,430$ Operating profit........................................................................................ 9,070$ 19,230$ 10,500$ 5,230$ Total Special Items to consider in evaluating operating profit........................ 5,400$ 2,440$ 5,160$ 2,000$ Excluding Special Items, operating profit would have been.................... 14,470$ 21,670$ 15,660$ 7,230$ June 30, December 31, Cequent Americas Cequent APEA Operating Segments Corporate Expenses Total Company Six months ended (Unaudited, dollars in thousands) Company and Business Segment Financial Information – Six Months
28 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited, dollars in thousands, except for per share amounts) Three months ended Twelve months ended December 31, December 31, 2015 2014 2015 2014 Net income (loss), as reported.............................................................................................................................. (1,730)$ (3,060)$ 8,300$ 15,350$ After-tax impact of Special Items to consider in evaluating quality of income: Severance and business restructuring costs.......................................................................................................... 1,720 940 6,940 3,100 Loss on software disposal..................................................................................................................................... - - 1,170 - Excluding Special Items, net income (loss) would have been............................................................................. (10)$ (2,120)$ 16,410$ 18,450$ Three months ended Twelve months ended December 31, December 31, 2015 2014 2015 2014 Diluted earnings (loss) per share, as reported...................................................................................................... (0.10)$ (0.17)$ 0.46$ 0.85$ After-tax impact of Special Items to consider in evaluating quality of EPS: Sever nce and business restructuring costs.......................................................................................................... 0.10 0.05 0.38 0.17 Lo s on software disposal..................................................................................................................................... - - 0.06 - Excluding Special Items, EPS would have been.................................................................................................. -$ (0.12)$ 0.90$ 1.02$ Weighted-average shares outstanding for the three and twelve months ended December 31, 2015 and 2014... 18,071,076 18,062,027 18,160,852 18,113,416
29 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures – 6 months (Unaudited, dollars in thousands, except for per share amounts) Six months ended Six months ended June 30, December 31, 2015 2014 2015 2014 Net income, as reported........................................................................................................................................ 3,680$ 13,200$ 4,620$ 2,150$ After-tax impact of Special Items to consider in evaluating quality of income: Severance and business restructuring costs.......................................................................................................... 2,570 1,590 4,370 1,510 Loss on software disposal..................................................................................................................................... 1,170 - - - Excluding Special Items, net income would have been....................................................................................... 7,420$ 14,790$ 8,990$ 3,660$ Six months ended Six months ended June 30, December 31, 2015 2014 2015 2014 Diluted earnings per share, as reported................................................................................................................ 0.20$ 0.73$ 0.25$ 0.12$ fter-tax impact of Special Items to consider in evaluating quality of EPS: S verance and business restructuring costs.......................................................................................................... 0.14 0.09 0.25 0.08 Loss on software disposal..................................................................................................................................... 0.06 - - - Excluding Special Items, EPS would have been.................................................................................................. 0.40$ 0.82$ 0.50$ 0.20$ Weighted-average shares outstanding for the six months ended June and December 31, 2015 and 2014......... 18,134,475 18,113,080 18,143,143 18,088,030
30 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN LTM Bank EBITDA as Defined in Credit Agreement (Unaudited, dollars in thousands) 8,300$ Interest expense, net (as defined)........................................................................................... 8,810 Income tax benefit................................................................................................................. (1,280) Depreciation and amortization................................................................................................ 17,080 Non-cash compensation expense (1)……………………………………………………………………… 2,530 Other non-cash expenses or losses......................................................................................... 11,350 Non-recurring expenses or costs (as defined) (2)………………………………………………………………..5,000 Interest-equivalent costs associated with any Specified Vendor Receivables financing................ 900 52,690$ Total Consolidated Indebtedness, as of December 31, 2015...................................................... 175,760$ Bank EBITDA........................................................................................................................ 52,690 Actual leverage ratio.............................................................................................................. 3.34 x Covenant requirement............................................................................................................ 5.25 x (1) (2) (3) As defined in the Credit Agreement dated June 30, 2015. Net income for year ended December 31, 2015 .......................................................................... Bank EBITDA - Year Ended December 31, 2015 (3)………………………………………………………… Non-cash compensation expense resulting from the grant of restricted shares of common stock and common stock options. Includes amounts allocated by former parent company. Under our credit agreement, costs and expenses related to cost savings projects, including restructuring and severance expenses, are not to exceed $5 million in any fiscal year and $15 million in aggregate, commencing on or after January 1, 2015.
31 DRIVEN TO DELIVER 4Q 2015 Earnings NYSE: HZN Constant Currency Reconciliation The following unaudited table reconciles revenue growth to constant currency revenue for the same measure: We evaluate growth in our operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our growth, consistent with how we evaluate our performance. Constant currency revenue results are calculated by translating current year revenue in local currency using the prior year's currency conversion rate. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Our use of this term may vary from the use of similarly-titled measures by other issuers due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. Consolidated Americas APEA Consolidated Americas APEA Consolidated Americas APEA Re e u Growth as reported (4.9%) (3.0%) (9.5%) (3.8%) 0.1% (13.5%) (5.9%) (3.9%) (11.5%) Less: Currency impact (5.2%) (1.1%) (15.0%) (5.3%) (1.0%) (16.1%) (4.4%) (0.8%) (14.3%) Revenue growth at constant currency 0.3% (1.9%) 5.5% 1.5% 1.1% 2.6% (1.5%) (3.1%) 2.8% Six Months, Ended December 31, 2015 Three Months, Ended December 31, 2015 Twelve Months, Ended December 31, 2015
