Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37427 | |
Entity Registrant Name | HORIZON GLOBAL CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3574483 | |
Entity Address, Address Line One | 47912 Halyard Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Plymouth | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48170 | |
City Area Code | 734 | |
Local Phone Number | 656-3000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | HZN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,610,521 | |
Entity Central Index Key | 0001637655 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 180,860 | $ 199,190 |
Cost of sales | (160,650) | (158,630) |
Gross profit | 20,210 | 40,560 |
Selling, general and administrative expenses | (33,770) | (33,780) |
Operating (Loss) Profit | (13,560) | 6,780 |
Interest expense | (7,670) | (7,050) |
Loss on debt extinguishment of Replacement Term Loan | 0 | (11,650) |
Other expense, net | (5,490) | (2,230) |
Loss before income tax | (26,720) | (14,150) |
Income tax expense | (230) | (1,000) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Total | (26,950) | (15,150) |
Less: Net loss attributable to noncontrolling interest | (270) | (340) |
Net loss attributable to Horizon Global | $ (26,680) | $ (14,810) |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.98) | $ (0.55) |
Diluted (in dollars per share) | $ (0.98) | $ (0.55) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (26,950) | $ (15,150) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation and other | 1,890 | (2,290) |
Total other comprehensive income (loss), net of tax | 1,890 | (2,290) |
Total comprehensive loss | (25,060) | (17,440) |
Less: Comprehensive loss attributable to noncontrolling interest | (270) | (340) |
Comprehensive loss attributable to Horizon Global | $ (24,790) | $ (17,100) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 29,660 | $ 11,780 |
Restricted cash | 5,470 | 5,490 |
Receivables, net | 95,570 | 80,720 |
Inventories | 178,840 | 162,830 |
Prepaid expenses and other current assets | 15,180 | 12,340 |
Total current assets | 324,720 | 273,160 |
Property and equipment, net | 72,600 | 71,610 |
Operating lease right-of-use assets | 37,300 | 37,810 |
Other intangibles, net | 46,860 | 48,910 |
Deferred income taxes | 1,750 | 1,750 |
Other assets | 5,270 | 5,680 |
Total assets | 488,500 | 438,920 |
Current liabilities: | ||
Short-term borrowings and current maturities, long-term debt | 3,670 | 3,780 |
Accounts payable | 128,710 | 102,190 |
Short-term operating lease liabilities | 11,210 | 11,010 |
Accrued liabilities | 49,680 | 44,870 |
Total current liabilities | 193,270 | 161,850 |
Gross long-term debt | 339,970 | 297,070 |
Unamortized debt issuance costs and discount | (27,830) | (26,520) |
Long-term debt | 312,140 | 270,550 |
Deferred income taxes | 1,650 | 1,920 |
Long-term operating lease liabilities | 34,290 | 35,930 |
Other long-term liabilities | 8,800 | 8,920 |
Total liabilities | 550,150 | 479,170 |
Commitments and Contingencies (Note 9) | ||
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None | 0 | 0 |
Common stock, $0.01 par: Authorized 400,000,000 shares; 28,297,027 shares issued and 27,610,521 outstanding at March 31, 2022, and 27,973,153 shares issued and 27,286,647 outstanding at December 31, 2021 | 280 | 270 |
Common stock warrants issued, outstanding and exercisable for 10,206,146 and 9,231,146 shares of common stock at March 31, 2022 and December 31, 2021, respectively | 28,050 | 25,010 |
Paid-in capital | 171,600 | 170,990 |
Treasury stock, at cost: 686,506 shares at March 31, 2022 and December 31, 2021 | (10,000) | (10,000) |
Accumulated deficit | (236,930) | (210,250) |
Accumulated other comprehensive loss | (7,820) | (9,710) |
Total Horizon Global shareholders' deficit | (54,820) | (33,690) |
Noncontrolling interest | (6,830) | (6,560) |
Total shareholders' deficit | (61,650) | (40,250) |
Total liabilities and shareholders' deficit | $ 488,500 | $ 438,920 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued shares (in shares) | 0 | 0 |
Preferred stock, outstanding shares (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized shares (in shares) | 400,000,000 | 400,000,000 |
Common Stock, issued shares (in shares) | 28,297,027 | 27,973,153 |
Common Stock, outstanding shares (in shares) | 27,610,521 | 27,286,647 |
Treasury stock, shares (in shares) | 686,506 | 686,506 |
Common Stock Warrants | ||
Issued warrants (in shares) | 10,206,146 | 9,231,146 |
Warrants outstanding and exercisable (in shares) | 10,206,146 | 9,231,146 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (26,950) | $ (15,150) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation | 3,350 | 4,200 |
Amortization of intangible assets | 1,270 | 1,300 |
Amortization of original issuance discount and debt issuance costs | 2,870 | 2,810 |
Deferred income taxes | (200) | 470 |
Non-cash compensation expense | 1,250 | 860 |
Loss on debt extinguishment of Replacement Term Loan | 0 | 11,650 |
Paid-in-kind interest | 0 | 650 |
Increase in receivables | (16,250) | (26,870) |
Increase in inventories | (17,000) | (20,950) |
Increase in prepaid expenses and other assets | (2,710) | (940) |
Increase in accounts payable and accrued liabilities | 33,350 | 23,120 |
Other, net | 2,690 | 600 |
Net cash used for operating activities | (18,330) | (18,250) |
Cash Flows from Investing Activities: | ||
Capital expenditures | (5,000) | (3,360) |
Net cash used for investing activities | (5,000) | (3,360) |
Cash Flows from Financing Activities: | ||
Proceeds from borrowings on credit facilities | 1,040 | 1,530 |
Repayments of borrowings on credit facilities | (1,930) | (720) |
Proceeds from Senior Term Loan, net of issuance costs | 30,900 | 75,300 |
Repayments of borrowings on Replacement Term Loan, including transaction fees | 0 | (94,940) |
Proceeds from Revolving Credit Facility, net of issuance costs | 9,170 | 4,450 |
Proceeds from issuance of common stock warrants | 3,040 | 16,300 |
Proceeds from exercise of common stock warrants | 0 | 420 |
Other, net | (720) | (650) |
Net cash provided by financing activities | 41,500 | 1,690 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (310) | (510) |
Increase (decrease) for the period | 17,860 | (20,430) |
At beginning of period | 17,270 | 50,690 |
At end of period | 35,130 | 30,260 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,280 | 7,270 |
Cash paid for taxes, net of refunds | $ 390 | $ 530 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Total Horizon Global Shareholders' Equity (Deficit) | Common Stock | Common Stock Warrants | Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interest |
Beginning balance at Dec. 31, 2020 | $ (23,850) | $ (18,690) | $ 260 | $ 9,510 | $ 166,610 | $ (10,000) | $ (178,530) | $ (6,540) | $ (5,160) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (15,150) | (14,810) | (14,810) | (340) | |||||
Other comprehensive income (loss), net of tax | (2,290) | (2,290) | (2,290) | ||||||
Shares surrendered upon vesting of employee stock compensation 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 | 420 | 420 | 10 | (800) | 1,210 | ||||
Ending balance at Mar. 31, 2021 | (24,260) | (18,760) | 270 | 25,010 | 168,130 | (10,000) | (193,340) | (8,830) | (5,500) |
Beginning balance at Dec. 31, 2021 | (40,250) | (33,690) | 270 | 25,010 | 170,990 | (10,000) | (210,250) | (9,710) | (6,560) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (26,950) | (26,680) | (26,680) | (270) | |||||
Other comprehensive income (loss), net of tax | 4,990 | 4,990 | 4,990 | ||||||
Shares surrendered upon vesting of employee stock compensation awards to cover tax obligations | (640) | (640) | (640) | ||||||
Non-cash compensation expense | 1,260 | 1,260 | 10 | 1,250 | |||||
Issuance of common stock warrants | 3,040 | 3,040 | 3,040 | ||||||
Amounts reclassified from AOCI | (3,100) | (3,100) | (3,100) | ||||||
Ending balance at Mar. 31, 2022 | $ (61,650) | $ (54,820) | $ 280 | $ 28,050 | $ 171,600 | $ (10,000) | $ (236,930) | $ (7,820) | $ (6,830) |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Horizon Global Corporation and its consolidated subsidiaries (“Horizon Global,” “we,” “our,” or the “Company”) are a designer, manufacturer and distributor of a wide variety of high quality, custom-engineered towing, trailering, cargo management and other related accessory products 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 13, Segment Information , for further information on 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 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, 2021. 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. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates, judgments, and assumptions also affect the reported amounts of revenues and expenses during the reporting periods. The Company believes 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), stock compensation, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, depreciation and amortization, estimates related to lease liability and operating lease right-of-use (“ROU”) asset valuations, estimated future unrecoverable lease costs, legal and product liability matters, valuation of debt instruments and warrants, assets and obligations related to employee benefits, and the respective allocation methods, 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. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements As of March 31, 2022, there have been no new accounting pronouncements recently issued or adopted that have had or are reasonably likely to have a material impact on the Company’s condensed consolidated financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following components: March 31, December 31, (dollars in thousands) Finished goods $ 100,570 $ 85,770 Work in process 14,490 15,570 Raw materials 63,780 61,490 Total $ 178,840 $ 162,830 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consists of the following components: March 31, December 31, (dollars in thousands) Land and land improvements $ 470 $ 480 Buildings and building improvements 21,800 22,210 Machinery and equipment 138,540 135,110 Gross property and equipment 160,810 157,800 Accumulated depreciation (88,210) (86,190) Total $ 72,600 $ 71,610 During the three months ended March 31, 2022 and 2021, depreciation expense was $3.4 million and $4.2 million, respectively. |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows: March 31, 2022 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) $ 161,590 $ (138,050) $ 23,540 Technology and other (3 – 15 years) 23,750 (21,080) 2,670 Sub-total 185,340 (159,130) 26,210 Trademark/Trade names, indefinite-lived 20,650 — 20,650 Total $ 205,990 $ (159,130) $ 46,860 December 31, 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) $ 162,390 $ (137,420) $ 24,970 Technology and other (3 – 15 years) 23,870 (20,830) 3,040 Sub-total 186,260 (158,250) 28,010 Trademark/Trade names, indefinite-lived 20,900 — 20,900 Total $ 207,160 $ (158,250) $ 48,910 |
Accrued and Other Long-term Lia
Accrued and Other Long-term Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Liabilities [Abstract] | |
Accrued and Other Long-term Liabilities | Accrued and Other Long-term Liabilities Accrued liabilities consist of the following components: March 31, December 31, (dollars in thousands) Customer incentives $ 13,130 $ 13,030 Accrued compensation 10,630 7,520 Accrued transportation costs 6,180 5,600 Accrued interest 2,950 3,430 Short-term tax liabilities 2,850 3,530 Customer claims 2,760 2,900 Accrued professional services 1,630 1,700 Litigation settlements 1,160 1,290 Other 8,390 5,870 Total $ 49,680 $ 44,870 Other long-term liabilities consist of the following components: March 31, December 31, (dollars in thousands) Litigation settlements $ 1,770 $ 1,820 Long-term tax liabilities 130 130 Other 6,900 6,970 Total $ 8,800 $ 8,920 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt The Company’s long-term debt consists of the following components: March 31, December 31, (dollars in thousands) Revolving Credit Facility $ 67,220 $ 58,050 Senior Term Loan 135,000 100,000 Convertible Notes 125,000 125,000 Bank facilities, finance leases and other long-term debt 16,420 17,800 Gross debt 343,640 300,850 Less: Short-term borrowings and current maturities, long-term debt 3,670 3,780 Gross long-term debt 339,970 297,070 Unamortized debt issuance costs and discount: Unamortized debt issuance costs and original issuance discount on Senior Term Loan (25,410) (22,170) Unamortized debt issuance costs and discount on Convertible Notes (2,420) (4,350) Total (27,830) (26,520) Long-term debt $ 312,140 $ 270,550 Revolving Credit Facility In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Eclipse Business Capital LLC, formerly known as Encina Business Credit, LLC, 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. The Loan Agreement has been amended on several occasions that, among other things, increased the maximum credit available under the Revolving Credit Facility to $95.0 million. On March 31, 2022, the Company entered into an amendment to the Loan Agreement that, among other things, temporarily increased the Company’s ability to borrow against receivables and in-transit inventory as well as inventory located in the Company’s Mexico facilities, which is effective through June 30, 2022. The amendment also replaced the London Interbank Offered Rate (“LIBOR”) based interest rate with the Adjusted Term Secured Overnight Financing Rate (“Adjusted Term SOFR”). As a result of the amendment, interest on the loans under the Loan Agreement is payable in cash at the interest rate of Adjusted Term SOFR plus 4.00% per annum, subject to a 1.00% Adjusted Term SOFR 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 through June 30, 2022. Beginning June 30, 2022, the interest rate on all loans under the Loan Agreement will be 3.50% to 4.00% per annum, subject to certain conditions defined in the Loan Agreement. During the three months ended March 31, 2022 and 2021, the Company recognized $0.1 million and $0.2 million, respectively, of amortization of debt issuance costs in the accompanying condensed consolidated statements of operations. As of March 31, 2022 and December 31, 2021, there was $0.7 million and $0.8 million, respectively, of unamortized debt issuance costs included in other assets in the accompanying condensed consolidated balance sheets. As of March 31, 2022 and December 31, 2021, the Company had $17.7 million and $27.4 million of availability, respectively, under the Revolving Credit Facility. As of March 31, 2022 and December 31, 2021, the Company had $0.8 million and $2.1 million, respectively, of letters of credit issued and outstanding under the Revolving Credit Facility with no cash collateral requirement. As of March 31, 2022 and December 31, 2021, the Company also had $4.2 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 March 31, 2022 and December 31, 2021, the Company had cash collateral of $4.9 million. Cash collateral is included in restricted cash in the accompanying condensed consolidated balance sheets. Replacement Term Loan In July 2020, the Company entered into an amendment of the Company’s former term loan agreement (the “Replacement Term Loan Amendment”). The Replacement Term Loan Amendment provided a replacement term loan (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the Company’s former term loan agreement, plus any accrued interest thereon. As a result of the Company’s entering into the Senior Term Loan Credit Agreement, as defined below, in the first quarter of 2021, the Replacement Term Loan was terminated and is no longer in effect. During the three months ended March 31, 2022 and 2021, 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. During the three months ended March 31, 2022 and 2021, the Company recognized no paid-in-kind (“PIK”) interest and $0.7 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations. As of March 31, 2022 and December 31, 2021, the Company had no aggregate principal outstanding and no unamortized debt issuance and discount costs. Senior Term Loan Credit Agreement In February 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. The Senior Term Loan Credit Agreement provided for an initial term loan facility (the “Senior Term Loan”) in the aggregate principal amount of $100.0 million, all of which was borrowed by the Company and was used to repay the Replacement Term Loan 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. On February 10, 2022, the Company entered into an amendment to its Senior Term Loan Credit Agreement with Atlantic Park. The amendment provided for a $35.0 million delayed draw facility, which the Company borrowed in full (the “Delayed Draw Term Loan”) under the Company’s existing delayed draw term loan facility under the Senior Term Loan Credit Agreement and allows the net proceeds to be used for working capital purposes and to fund low-cost country expansion in the Company’s Horizon Europe-Africa operating segment. The Company accounted for the Delayed Draw Term Loan as a debt modification in accordance with guidance in Accounting Standards Codification (“ASC”) 470-50, “ Modifications and Extinguishments ”. In connection with the Delayed Draw Term Loan, the Company issued warrants (“Senior Term Loan Amendment Warrants”) to Atlantic Park to purchase up to 975,000 shares of the Company’s common stock, with an exercise price of $9.00 per share. The Senior Term Loan Amendment Warrants are exercisable at any time prior to February 10, 2027, provided that the warrants may not be exercised and shares of common stock may not be issued pursuant to the warrants unless and until the Company obtains shareholder approval permitting the issuance of such shares of common stock in accordance with the rules of the New York Stock Exchange. In accordance with guidance in ASC 480, “ Distinguishing Liabilities from Equity ” (“ASC 480”), and ASC 815, “ Derivatives and Hedging ”, the Delayed Draw Term Loan and Senior Term Loan Amendment Warrants issued are each freestanding instruments and proceeds were allocated to each instrument on a relative fair value basis of $31.9 million and $3.1 million, respectively. The Senior Term Loan Amendment Warrants are not within the scope of ASC 480 and do not meet the criteria for liability classification. However, the Senior Term Loan Amendment 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 $3.1 million allocated to the Senior Term Loan Amendment 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 $0.5 million and original issuance discount of $1.1 million were incurred in connection with the Delayed Draw Term Loan. During the three months ended March 31, 2022, the $0.5 million of debt issuance costs were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. The $1.1 million original issuance discount was allocated to each instrument on a relative fair value basis. The $1.0 million allocated to the Delayed Draw Term Loan will be amortized into interest expense over the contractual term of the loan using the effective interest method and the $0.1 million allocated to the Senior Term Loan Amendment Warrants was recorded as a reduction of equity. The Company determined the fair value of the Delayed Draw Term Loan using a discount rate build up approach. The debt discount of $3.1 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. We collectively refer to the Delayed Draw Term Loan and the Senior Term Loan as the Senior Term Loan. During the three months ended March 31, 2022 and 2021, the Company recognized $0.9 million and $0.5 million, respectively, of amortization of debt issuance and discount costs in the accompanying condensed consolidated statements of operations associated with the Senior Term Loan. 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. The Convertible Notes will mature on July 1, 2022 unless earlier converted. The Convertible Notes were not convertible during the first quarter of 2022, as no conditions allowing holders of the Convertible Notes to convert have been met. 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 March 31, 2022, the if-converted value of the Convertible Notes did not exceed the principal value of those Convertible Notes. During the three months ended March 31, 2022 and 2021, the Company recognized total interest expense of $2.8 million and $2.6 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 March 31, 2022 2021 (dollars in thousands) Contractual interest coupon on convertible debt $ 860 $ 860 Amortization of debt issuance costs 130 130 Amortization of "equity discount" related to debt 1,790 1,650 Total $ 2,780 $ 2,640 As a result of the Company’s Senior Term Loan Credit Agreement, which includes the Delayed Draw Term Loan facility described above and the Series B Preferred Stock commitment letter, executed in February 2022 and described in Note 9, Commitments and Contingencies , the Company has the ability and intent to repay the Convertible Notes when they mature on July 1, 2022. Covenant and Liquidity Matters As of March 31, 2022, the Company is in compliance with all applicable covenants in agreements governing its debt. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | LeasesThe Company leases certain facilities, automobiles and equipment under non-cancellable operating leases. Our leases have remaining lease terms of one 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 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, 2021, for more information. Supplemental information for the Company’s leases is as follows: Three Months Ended March 31, 2022 2021 (dollars in thousands) Operating lease cost $ 3,670 $ 3,870 Three Months Ended March 31, 2022 2021 Operating cash flows from operating leases $ 3,570 $ 3,360 ROU assets obtained in exchange for operating lease obligations $ 260 $ 200 March 31, December 31, Weighted average remaining lease term (years) 4.9 5.1 Weighted average discount rate 8.4 % 8.4 % |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Series B Preferred Stock Commitment Letter On February 10, 2022, the Company executed a commitment letter with Corre Partners Management L.L.C. (“Corre”) to issue, solely at the Company’s option, up to $40.0 million of Series B Preferred Stock. To the extent issued, the net proceeds of the Series B Preferred Stock may be used to repay up to $35.0 million of the Company’s outstanding Convertible Notes at maturity and, following such repayment, for general corporate purposes. If issued, the Series B Preferred Stock would accrue dividends in kind at a rate of 11.0% per annum. The Series B Preferred Stock would be perpetual, but subject to voluntary redemption at the Company’s option and subject to mandatory redemption upon a change in control or the one-year anniversary of the maturity of the Senior Term Loan. Additionally, if issued, if the Series B Preferred Stock is not redeemed after the occurrence of certain events, it would be convertible into shares of the Company’s common stock, at the option of Corre and subject to shareholder approval. The commitment letter expires on July 1, 2022. As of March 31, 2022, the Company had not issued any shares of Series B Preferred Stock. During the three months ended March 31, 2022, the Company recognized a commitment fee of $1.0 million, as required under the terms of the commitment letter, in other expense, net in the accompanying condensed consolidated statements of operations. The $1.0 million commitment fee is payable either in cash if no portion of the Series B Preferred Stock is issued or additional shares of Series B Preferred Stock, no later than the commitment expiration. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | 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 March 31, 2022 2021 (dollars in thousands, except for per share amounts) Numerator: Net loss $ (26,950) $ (15,150) Less: Net loss attributable to noncontrolling interest (270) (340) Net loss attributable to Horizon Global $ (26,680) $ (14,810) Denominator: Weighted average shares outstanding, basic 27,341,135 26,743,441 Dilutive effect of common stock equivalents — — Weighted average shares outstanding, diluted 27,341,135 26,743,441 Basic loss per share attributable to Horizon Global $ (0.98) $ (0.55) Diluted loss per share attributable to Horizon Global $ (0.98) $ (0.55) As a result of the net loss for the three months ended March 31, 2022 and 2021, 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: Three Months Ended March 31, 2022 2021 Number of options 18,961 18,961 Exercise price of options $9.20 - $11.02 $9.20 - $11.02 Restricted stock units 2,018,448 1,857,793 Convertible Notes 5,005,000 5,005,000 Convertible Notes warrants 5,005,000 5,005,000 Common stock warrants 9,761,979 7,954,167 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 7, 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. |
Equity Awards
Equity Awards | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Equity Awards | Equity Awards Horizon Global employees, non-employee directors and certain consultants participate in the Horizon Global Corporation 2020 Equity and Incentive Compensation Plan (the “Horizon 2020 Plan”). The Horizon 2020 Plan authorizes the Compensation Committee of the Horizon Global 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. The Company generally awards grants on an annual basis. In March 2022, the Company granted restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain key employees and non-employee directors. The grant date fair values for the RSUs and PSUs are based on the closing trading price of the Company’s common stock on the date of grant. T he RSUs vest ratably over a three-year period , while the PSUs cliff vest after a three-year period, upon achieving the performance criteria. The performance criteria for the PSUs is based on the Company’s three-year cumulative EBITDA. During the three months ended March 31, 2022 and 2021, the Company recognized $1.3 million and $0.9 million, respectively, of stock compensation expense related to RSUs and PSUs. Stock compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Stock Warrants In February 2022, in connection with the Delayed Draw Term Loan, the Company issued the Senior Term Loan Amendment Warrants to purchase up to 975,000 shares of the Company’s common stock, with an exercise price of $9.00 per share. See Note 7, Long-term Debt , for additional information. During the three months ended March 31, 2022, no warrants were exercised. During the three months ended March 31, 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, and paid the exercise price in cash and received 278,283 shares of common stock. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 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. 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 and the disaggregation of sales channels within each operating segment. 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 aftermarket, automotive OEMs, automotive OESs, industrial and retail customers in the agricultural, automotive, construction, industrial, marine, military, recreational vehicle, trailer and utility end markets. Products include vehicle trailer hitches, brake controllers, cargo management, heavy-duty towing products, jacks and couplers, protection/securing systems, trailer structural and electrical components, tow bars, vehicle roof racks 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 March 31, 2022 2021 (dollars in thousands) Net Sales Horizon Americas $ 101,940 $ 109,830 Horizon Europe-Africa 78,920 89,360 Total $ 180,860 $ 199,190 Operating (Loss) Profit Horizon Americas $ (4,300) $ 11,840 Horizon Europe-Africa (1,540) 1,460 Corporate (7,720) (6,520) Total $ (13,560) $ 6,780 Disaggregation of Sales 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 aftermarket channel represents sales to automotive installers and warehouse distributors. The automotive OEM channel represents sales to automotive vehicle manufacturers. The automotive OES channel primarily represents sales to automotive vehicle dealerships. 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. The Company’s net sales by segment and disaggregated by major sales channel are as follows: Three Months Ended March 31, 2022 Horizon Americas Horizon Europe-Africa Total (dollars in thousands) Net Sales Aftermarket $ 28,440 $ 19,170 $ 47,610 Automotive OEM 22,550 39,920 62,470 Automotive OES 3,730 16,780 20,510 Retail 19,820 — 19,820 E-commerce 16,070 1,680 17,750 Industrial 11,330 410 11,740 Other — 960 960 Total $ 101,940 $ 78,920 $ 180,860 Three Months Ended March 31, 2021 Horizon Americas Horizon Europe-Africa Total (dollars in thousands) Net Sales Aftermarket $ 31,690 $ 22,420 $ 54,110 Automotive OEM 27,520 48,560 76,080 Automotive OES 3,860 16,060 19,920 Retail 22,580 — 22,580 E-commerce 14,520 1,430 15,950 Industrial 9,660 550 10,210 Other — 340 340 Total $ 109,830 $ 89,360 $ 199,190 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 months ended March 31, 2022 and 2021, the effective income tax rate was (0.9)% and (7.1)%, 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, and 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 March 31, 2022, the Company believes that it is more likely than not that the recorded deferred tax assets will be realized. |
Other Expense, Net
Other Expense, Net | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Other Expense, Net | Other Expense, Net Other expense, net consists of the following components: Three Months Ended March 31, 2022 2021 (dollars in thousands) Net loss on disposition of business $ (3,090) $ — Foreign currency loss (1,350) (2,110) Series B commitment fee (1,000) — Customer early pay discounts (250) (240) Other, net 200 120 Total $ (5,490) $ (2,230) |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements As of March 31, 2022, there have been no new accounting pronouncements recently issued or adopted that have had or are reasonably likely to have a material impact on the Company’s condensed consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following components: March 31, December 31, (dollars in thousands) Finished goods $ 100,570 $ 85,770 Work in process 14,490 15,570 Raw materials 63,780 61,490 Total $ 178,840 $ 162,830 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment, net consists of the following components: March 31, December 31, (dollars in thousands) Land and land improvements $ 470 $ 480 Buildings and building improvements 21,800 22,210 Machinery and equipment 138,540 135,110 Gross property and equipment 160,810 157,800 Accumulated depreciation (88,210) (86,190) Total $ 72,600 $ 71,610 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows: March 31, 2022 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) $ 161,590 $ (138,050) $ 23,540 Technology and other (3 – 15 years) 23,750 (21,080) 2,670 Sub-total 185,340 (159,130) 26,210 Trademark/Trade names, indefinite-lived 20,650 — 20,650 Total $ 205,990 $ (159,130) $ 46,860 December 31, 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) $ 162,390 $ (137,420) $ 24,970 Technology and other (3 – 15 years) 23,870 (20,830) 3,040 Sub-total 186,260 (158,250) 28,010 Trademark/Trade names, indefinite-lived 20,900 — 20,900 Total $ 207,160 $ (158,250) $ 48,910 |
Accrued and Other Long-term L_2
Accrued and Other Long-term Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following components: March 31, December 31, (dollars in thousands) Customer incentives $ 13,130 $ 13,030 Accrued compensation 10,630 7,520 Accrued transportation costs 6,180 5,600 Accrued interest 2,950 3,430 Short-term tax liabilities 2,850 3,530 Customer claims 2,760 2,900 Accrued professional services 1,630 1,700 Litigation settlements 1,160 1,290 Other 8,390 5,870 Total $ 49,680 $ 44,870 Other long-term liabilities consist of the following components: March 31, December 31, (dollars in thousands) Litigation settlements $ 1,770 $ 1,820 Long-term tax liabilities 130 130 Other 6,900 6,970 Total $ 8,800 $ 8,920 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s long-term debt consists of the following components: March 31, December 31, (dollars in thousands) Revolving Credit Facility $ 67,220 $ 58,050 Senior Term Loan 135,000 100,000 Convertible Notes 125,000 125,000 Bank facilities, finance leases and other long-term debt 16,420 17,800 Gross debt 343,640 300,850 Less: Short-term borrowings and current maturities, long-term debt 3,670 3,780 Gross long-term debt 339,970 297,070 Unamortized debt issuance costs and discount: Unamortized debt issuance costs and original issuance discount on Senior Term Loan (25,410) (22,170) Unamortized debt issuance costs and discount on Convertible Notes (2,420) (4,350) Total (27,830) (26,520) Long-term debt $ 312,140 $ 270,550 |
Interest Income and Interest Expense Disclosure | 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 March 31, 2022 2021 (dollars in thousands) Contractual interest coupon on convertible debt $ 860 $ 860 Amortization of debt issuance costs 130 130 Amortization of "equity discount" related to debt 1,790 1,650 Total $ 2,780 $ 2,640 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Lease Information | Supplemental information for the Company’s leases is as follows: Three Months Ended March 31, 2022 2021 (dollars in thousands) Operating lease cost $ 3,670 $ 3,870 Three Months Ended March 31, 2022 2021 Operating cash flows from operating leases $ 3,570 $ 3,360 ROU assets obtained in exchange for operating lease obligations $ 260 $ 200 March 31, December 31, Weighted average remaining lease term (years) 4.9 5.1 Weighted average discount rate 8.4 % 8.4 % |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended March 31, 2022 2021 (dollars in thousands, except for per share amounts) Numerator: Net loss $ (26,950) $ (15,150) Less: Net loss attributable to noncontrolling interest (270) (340) Net loss attributable to Horizon Global $ (26,680) $ (14,810) Denominator: Weighted average shares outstanding, basic 27,341,135 26,743,441 Dilutive effect of common stock equivalents — — Weighted average shares outstanding, diluted 27,341,135 26,743,441 Basic loss per share attributable to Horizon Global $ (0.98) $ (0.55) Diluted loss per share attributable to Horizon Global $ (0.98) $ (0.55) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | A summary of these anti-dilutive common stock equivalents are as follows: Three Months Ended March 31, 2022 2021 Number of options 18,961 18,961 Exercise price of options $9.20 - $11.02 $9.20 - $11.02 Restricted stock units 2,018,448 1,857,793 Convertible Notes 5,005,000 5,005,000 Convertible Notes warrants 5,005,000 5,005,000 Common stock warrants 9,761,979 7,954,167 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company’s operating segment activity is as follows: Three Months Ended March 31, 2022 2021 (dollars in thousands) Net Sales Horizon Americas $ 101,940 $ 109,830 Horizon Europe-Africa 78,920 89,360 Total $ 180,860 $ 199,190 Operating (Loss) Profit Horizon Americas $ (4,300) $ 11,840 Horizon Europe-Africa (1,540) 1,460 Corporate (7,720) (6,520) Total $ (13,560) $ 6,780 |
Schedule of Net Sales Disaggregated by Major Sales Channels | The Company’s net sales by segment and disaggregated by major sales channel are as follows: Three Months Ended March 31, 2022 Horizon Americas Horizon Europe-Africa Total (dollars in thousands) Net Sales Aftermarket $ 28,440 $ 19,170 $ 47,610 Automotive OEM 22,550 39,920 62,470 Automotive OES 3,730 16,780 20,510 Retail 19,820 — 19,820 E-commerce 16,070 1,680 17,750 Industrial 11,330 410 11,740 Other — 960 960 Total $ 101,940 $ 78,920 $ 180,860 Three Months Ended March 31, 2021 Horizon Americas Horizon Europe-Africa Total (dollars in thousands) Net Sales Aftermarket $ 31,690 $ 22,420 $ 54,110 Automotive OEM 27,520 48,560 76,080 Automotive OES 3,860 16,060 19,920 Retail 22,580 — 22,580 E-commerce 14,520 1,430 15,950 Industrial 9,660 550 10,210 Other — 340 340 Total $ 109,830 $ 89,360 $ 199,190 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expense, Net | Three Months Ended March 31, 2022 2021 (dollars in thousands) Net loss on disposition of business $ (3,090) $ — Foreign currency loss (1,350) (2,110) Series B commitment fee (1,000) — Customer early pay discounts (250) (240) Other, net 200 120 Total $ (5,490) $ (2,230) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 100,570 | $ 85,770 |
Work in process | 14,490 | 15,570 |
Raw materials | 63,780 | 61,490 |
Total | $ 178,840 | $ 162,830 |
Property and Equipment, Net - P
Property and Equipment, Net - Property and Equipment Table (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 160,810 | $ 157,800 | |
Accumulated depreciation | (88,210) | (86,190) | |
Total | 72,600 | 71,610 | |
Depreciation | 3,350 | $ 4,200 | |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 470 | 480 | |
Buildings and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 21,800 | 22,210 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 138,540 | $ 135,110 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Intangible Assets, excluding Goodwill [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | $ 185,340 | $ 186,260 | |
Finite-lived intangible assets, accumulated amortization | (159,130) | (158,250) | |
Finite-lived intangible assets, net | 26,210 | 28,010 | |
Total other intangible assets, gross | 205,990 | 207,160 | |
Total other intangible assets, net | 46,860 | 48,910 | |
Amortization of intangible assets | 1,270 | $ 1,300 | |
Trademarks and Trade Names | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Indefinite-lived intangible assets, gross carrying amount | 20,650 | 20,900 | |
Useful Life Two To Twenty Years | Customer Relationships | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 161,590 | 162,390 | |
Finite-lived intangible assets, accumulated amortization | (138,050) | (137,420) | |
Finite-lived intangible assets, net | 23,540 | 24,970 | |
Useful Life Three to Fifteen Years | Technology and Other | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 23,750 | 23,870 | |
Finite-lived intangible assets, accumulated amortization | (21,080) | (20,830) | |
Finite-lived intangible assets, net | $ 2,670 | $ 3,040 | |
Minimum | Useful Life Two To Twenty Years | Customer Relationships | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Useful life of intangible assets | 2 years | 2 years | |
Minimum | Useful Life Three to Fifteen Years | Technology and Other | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Useful life of intangible assets | 3 years | 3 years | |
Maximum | Useful Life Two To Twenty Years | Customer Relationships | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Useful life of intangible assets | 20 years | 20 years | |
Maximum | Useful Life Three to Fifteen Years | Technology and Other | |||
Intangible Assets, excluding Goodwill [Line Items] | |||
Useful life of intangible assets | 15 years | 15 years |
Accrued and Other Long-term L_3
Accrued and Other Long-term Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities [Abstract] | ||
Customer incentives | $ 13,130 | $ 13,030 |
Accrued compensation | 10,630 | 7,520 |
Accrued transportation costs | 6,180 | 5,600 |
Accrued interest | 2,950 | 3,430 |
Short-term tax liabilities | 2,850 | 3,530 |
Customer claims | 2,760 | 2,900 |
Accrued professional services | 1,630 | 1,700 |
Litigation settlements | 1,160 | 1,290 |
Other | 8,390 | 5,870 |
Total | $ 49,680 | $ 44,870 |
Accrued and Other Long-term L_4
Accrued and Other Long-term Liabilities - Long-term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities [Abstract] | ||
Litigation settlements | $ 1,770 | $ 1,820 |
Long-term tax liabilities | 130 | 130 |
Other | 6,900 | 6,970 |
Total | $ 8,800 | $ 8,920 |
Long-term Debt - Debt Table (De
Long-term Debt - Debt Table (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Gross long-term debt | $ 343,640 | $ 300,850 |
Short-term borrowings and current maturities, long-term debt | 3,670 | 3,780 |
Gross long-term debt | 339,970 | 297,070 |
Unamortized debt issuance costs and discount | (27,830) | (26,520) |
Long-term debt | 312,140 | 270,550 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | 67,220 | 58,050 |
Senior Term Loan | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | 135,000 | 100,000 |
Unamortized debt issuance costs and discount | (25,410) | (22,170) |
Convertible notes | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | 125,000 | 125,000 |
Unamortized debt issuance costs and discount | (2,420) | (4,350) |
Bank facilities, capital leases and other long-term debt | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | $ 16,420 | $ 17,800 |
Long-term Debt - Revolving Cred
Long-term Debt - Revolving Credit Facility (Details) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||||||
Unamortized debt issuance costs | $ 700,000 | $ 700,000 | $ 800,000 | |||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Initial borrowing capacity | $ 75,000,000 | |||||
Incremental increase in borrowing capacity | 5,000,000 | |||||
Maximum incremental increase in borrowing capacity available | $ 25,000,000 | |||||
Aggregate principal | 95,000,000 | 95,000,000 | ||||
Amortization of debt issuance costs | 100,000 | $ 200,000 | ||||
Remaining borrowing capacity | 17,700,000 | 17,700,000 | 27,400,000 | |||
Total letters of credit outstanding | $ 800,000 | $ 800,000 | 2,100,000 | |||
Percentage of cash collateral required | 105.00% | 105.00% | ||||
Cash collateral | $ 4,900,000 | $ 4,900,000 | 4,900,000 | |||
Revolving Credit Facility | Other Letter Of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Total letters of credit outstanding | $ 4,200,000 | $ 4,200,000 | $ 4,200,000 | |||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 4.00% | |||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Minimum | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Maximum | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 4.00% | |||||
Revolving Credit Facility | Base Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.00% |
Long-term Debt - Replacement Te
Long-term Debt - Replacement Term Loan (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Short-term Debt [Line Items] | |||
Paid-in-kind interest | $ 0 | $ 650 | |
Replacement Term Loan | |||
Short-term Debt [Line Items] | |||
Amortization of debt issuance costs | 0 | 400 | |
Paid-in-kind interest | 0 | $ 700 | |
Debt instrument, face amount | 0 | $ 0 | |
Unamortized debt discount and issuance costs | $ 0 | $ 0 |
Long-term Debt - Senior Term Lo
Long-term Debt - Senior Term Loan Credit Agreement (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 10, 2022 | Dec. 31, 2021 | Feb. 28, 2021 | |
Debt Instrument [Line Items] | |||||
Unamortized debt issuance costs | $ 0.7 | $ 0.8 | |||
Senior Term Loan | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal | $ 100 | ||||
Incremental borrowing base | $ 125 | ||||
Portion allocated to debt | $ 31.9 | ||||
Debt issuance costs | 0.5 | ||||
Initial debt issuance costs | 1.1 | ||||
Amortization of debt issuance costs | 0.9 | $ 0.5 | |||
Senior Term Loan | Selling, general and administrative expenses | |||||
Debt Instrument [Line Items] | |||||
Amortization of debt issuance costs | 0.5 | ||||
Senior Term Loan Credit Agreement Amendments | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal | $ 35 | ||||
Issued warrants (in shares) | 975,000 | ||||
Exercise price of warrants (in usd per share) | $ 9 | ||||
Senior Term Loan Warrants | |||||
Debt Instrument [Line Items] | |||||
Portion allocated to warrants | $ 3.1 | ||||
Amortization of "equity discount" related to debt | $ 0.1 | ||||
Delayed Draw Term Loan | |||||
Debt Instrument [Line Items] | |||||
Unamortized debt issuance costs | $ 1 |
Long-term Debt - Convertible No
Long-term Debt - Convertible Notes (Details) - Convertible notes - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 01, 2017 | |
Debt Instrument [Line Items] | |||
Interest rate | 2.75% | ||
Debt instrument, face amount | $ 125,000,000 | ||
Interest expense | $ 2,780,000 | $ 2,640,000 |
Long-term Debt - Schedule of In
Long-term Debt - Schedule of Interest and Amortization on Convertible Debt (Details) - Convertible notes - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Contractual interest coupon on convertible debt | $ 860 | $ 860 |
Amortization of debt issuance costs | 130 | 130 |
Amortization of "equity discount" related to debt | 1,790 | 1,650 |
Total | $ 2,780 | $ 2,640 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term for operating leases | 5 years | ||
Termination term | 1 year | ||
Operating lease cost | $ 3,670 | $ 3,870 | |
Operating cash flows from operating leases | 3,570 | 3,360 | |
Right-of-use assets obtained in exchange for operating lease obligations | $ 260 | $ 200 | |
Weighted average remaining lease term | 4 years 10 months 24 days | 5 years 1 month 6 days | |
Weighted average discount rate | 8.40% | 8.40% | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 7 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Senior Term Loan Credit Agreement Amendments - USD ($) $ in Millions | Mar. 31, 2022 | Feb. 10, 2022 |
Loss Contingencies [Line Items] | ||
Aggregate principal | $ 35 | |
Paid-in kind interest rate | 11.00% | |
Debt Issuance Costs, Gross | $ 1 | |
Series B Preferred Stock | ||
Loss Contingencies [Line Items] | ||
Preferred Stock, Capital Shares Reserved for Future Issuance, Amount | $ 40 |
Earnings (Loss) per Share - Rec
Earnings (Loss) per Share - Reconciliation of Numerator and Denominator of Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss | $ (26,950) | $ (15,150) |
Less: Net loss attributable to noncontrolling interest | (270) | (340) |
Net loss attributable to Horizon Global | $ (26,680) | $ (14,810) |
Denominator: | ||
Weighted average shares outstanding, basic (in shares) | 27,341,135 | 26,743,441 |
Dilutive effect of common stock equivalents (in shares) | 0 | 0 |
Weighted average shares outstanding, diluted (in shares) | 27,341,135 | 26,743,441 |
Basic loss per share attributable to Horizon Global (in dollars per share) | $ (0.98) | $ (0.55) |
Diluted loss per share attributable to Horizon Global (in dollars per share) | $ (0.98) | $ (0.55) |
Earnings (Loss) per Share - Sch
Earnings (Loss) per Share - Schedule of Antidilutive Securities (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 18,961 | 18,961 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,018,448 | 1,857,793 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,005,000 | 5,005,000 |
Convertible notes warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,005,000 | 5,005,000 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 9,761,979 | 7,954,167 |
Minimum | Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Exercise price of options (in dollars per share) | $ 9.20 | $ 9.20 |
Maximum | Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Exercise price of options (in dollars per share) | $ 11.02 | $ 11.02 |
Equity Awards (Details)
Equity Awards (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 1.3 | $ 0.9 | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years |
Shareholders' Equity - (Details
Shareholders' Equity - (Details) - $ / shares | Feb. 10, 2022 | Mar. 31, 2019 |
Class of Stock [Line Items] | ||
Number of shares of common stock received (in shares) | 278,283 | |
Senior Term Loan Credit Agreement Amendments | ||
Class of Stock [Line Items] | ||
Issued warrants (in shares) | 975,000 | |
Exercise price of warrants (in usd per share) | $ 9 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | |
Segment Reporting [Abstract] | ||
Number of Reportable Segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 180,860 | $ 199,190 |
Operating (Loss) Profit | (13,560) | 6,780 |
Horizon Americas | ||
Segment Reporting Information [Line Items] | ||
Net sales | 101,940 | 109,830 |
Horizon Europe-Africa | ||
Segment Reporting Information [Line Items] | ||
Net sales | 78,920 | 89,360 |
Operating Segments | Horizon Americas | ||
Segment Reporting Information [Line Items] | ||
Net sales | 101,940 | 109,830 |
Operating (Loss) Profit | (4,300) | 11,840 |
Operating Segments | Horizon Europe-Africa | ||
Segment Reporting Information [Line Items] | ||
Net sales | 78,920 | 89,360 |
Operating (Loss) Profit | (1,540) | 1,460 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Operating (Loss) Profit | $ (7,720) | $ (6,520) |
Segment Information - Schedule
Segment Information - Schedule of Net Sales Disaggregated by Major Sales Channels (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 180,860 | $ 199,190 |
Aftermarket | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 47,610 | 54,110 |
Automotive OEM | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 62,470 | 76,080 |
Automotive OES | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 20,510 | 19,920 |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 19,820 | 22,580 |
E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 17,750 | 15,950 |
Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 11,740 | 10,210 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 960 | 340 |
Horizon Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 101,940 | 109,830 |
Horizon Americas | Aftermarket | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 28,440 | 31,690 |
Horizon Americas | Automotive OEM | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 22,550 | 27,520 |
Horizon Americas | Automotive OES | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 3,730 | 3,860 |
Horizon Americas | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 19,820 | 22,580 |
Horizon Americas | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 16,070 | 14,520 |
Horizon Americas | Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 11,330 | 9,660 |
Horizon Americas | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Horizon Europe-Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 78,920 | 89,360 |
Horizon Europe-Africa | Aftermarket | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 19,170 | 22,420 |
Horizon Europe-Africa | Automotive OEM | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 39,920 | 48,560 |
Horizon Europe-Africa | Automotive OES | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 16,780 | 16,060 |
Horizon Europe-Africa | Retail | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Horizon Europe-Africa | E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,680 | 1,430 |
Horizon Europe-Africa | Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 410 | 550 |
Horizon Europe-Africa | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 960 | $ 340 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate (as a percent) | (0.90%) | (7.10%) |
Other Expense, Net (Details)
Other Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | ||
Net loss on disposition of business | $ (3,090) | $ 0 |
Foreign currency loss | (1,350) | (2,110) |
Series B commitment fee | (1,000) | 0 |
Customer early pay discounts | (250) | (240) |
Other, net | 200 | 120 |
Total | $ (5,490) | $ (2,230) |