Recent HZN transcripts
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Jeff Tryka | Lambert IR, Investor Relations |
Terry Gohl | Chief Executive Officer |
Dennis Richardville | Chief Financial Officer |
Good morning, everyone, and welcome to Horizon Global’s Second Quarter 2020 Conference Call. My name is Rocco, and I will be your operator for today’s call. All participants will be in a listen-only mode until we reach the question-and-answer session of the conference call. This call is being recorded at the request of Horizon Global. If anyone has any objections, you may disconnect at this time. to like now would introduce Mr. I with Tryka Lambert IR, firm. Relations Investor Global’s Horizon Jeff Mr. proceed. may you Tryka,
Thank morning, operator. XXXX you, Good conference second Horizon call quarter Global’s and webcast. and welcome to
Global’s our well today is many Terry of Richardville, call Relations available at Global’s Officer. our on we Financial as news Investor this Chief Officer; section results. second the On quarter Horizon Gohl, Horizon XXXX in and horizonglobal.com. Chief the are website Dennis morning, announced as Earlier sites Executive The results
X. to These Relations release Investor are Turning our the includes disclosures which are Today’s the press Slide presentation appendices section non-GAAP of reconciled and quarterly in of on disclosures. presentation, our both to website GAAP available horizonglobal.com. to at
I’d disclosures With today’s in said, differ would Form results the to statements and to about We’ve Terry? described filings to like that uncertainties forward-looking over these risk which views like Executive our Terry the other Chief turn XX-Q Officer, subject could other Exchange reports report X. in XX-K, Gohl. being presentation actual the include and Global’s factors These cause you in annual and and to future Horizon company’s performance, most uncertainties risks materially risks statements. on and Securities the that call statements. with all on from Form constitute remind that to forward-looking Turning our are Commission. will recent statements quarterly to I Horizon Global’s Slide our
two this this of XXXX for also thank what and us XXXX; the behalf we you continued the Quarter earnings an on of Horizon in And interest COVID-XX for we crisis the you all. in presented on we emotionally. second other we and Thank in company our stayed uncertainty people, showed quarter to March, the of on support and call the performed. whom series as incredible member adapted events many conditions faced, personally, pandemic morning’s of new company. today, me of and let call, stood we are up, attending The we a welcoming focused, for that way and heavy your faced your a distribution we brought with On by to with with employees, Jeff. professionally case us as we community, you, burden and back rapidly But all start as call. up, manufacturing Global’s
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employees the of team local we happened or operations a volumes to rapidly like to Second, restrictions which as no we would advanced shutdown planning. transition for to act slow the the us virus. spread notifications support change presented with And fashion enacted Major regional or in little a would our cliff time our protect effectively We were to workplace adjustment to the team. changes via would third, period. throughout and dramatic the said would reflect to flex a we in better significant customer that and
the the plants motion it. later as the crisis in pull a to we better of even continuous And the and forward, that were through do improve would operationally, emerge set that and set and tied our financially to set put, we entered we for thing beings which position we challenges Our full enhancement of executing faster improvement or pace better at initiatives from those considering up. protect presented stronger simply peers; terms a capacity in capital right our certain opportunity the remaining than restart, collective down ourselves of with time. to we stepped period so situation actions planning, workforce, everyone hoped to across objective a liquidity employees. Simply to would shutdown periods; and through working wages concessions commitment solid set a we time with in our lengthy better benefits with happen. did the solid of leverage was a set, position, all employment and would Besides, of rapid the slow the would the being And emerge foundation we than of restart we the which the demands and and it
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quarter, end we at you the as July our the sales provide our early You of will recovery at today. also discussion an the see and this look results sales highlight during
from improvements drive the showed team, were able rose able great business entire And across in time storm, of efforts through Everyone to collective the They only the away turmoil. team shy the not up. global the we challenge the a to during significant we throughout were of Our the to period. didn’t challenge. weather board but the
some on of the X. starting highlights Let’s Page review
impact and to of bullets please points, preface virus was sales the consider As the that these a dramatic global response rapid.
and us, and we our to of presented focus decline new challenge we that to address we cash period XX.X% During XXXX. $XX improve to saw liquidity work any the in our and sales for to in company. million with ended our Keeping the to the quarter, to pretty up compared plan No conditions results. or reduction net a impressive went to through with sales in some performance, base same small react face
For XXXX, of cash $XX.X improvement. receivable. performance improvements year, whopping this generated we improvement on significant was million major capital a improvement of of operations. management. We our the through inventories a continued focus the million reflected $XX.X to working driver million compared marked This and This positive effective A prior million first from $XX.X flow $X.X is of recognized capital XXXX. working by in accounts in half QX
first million. our resulting challenges unprecedented a Overall, – all and of of $XX.X restarting on loan this a taking working availability cash which term $XXX to capital while million we chain, supply through million, absorbing We accelerated and $XXX.X operations May over our by the with in and at also pay roughly end, and debt our improved cut primarily period period of gross our down lien quarter June. shutdown
time During operating This first the provides also company. plan. strategic refinanced as between this us that date extended the action at past a single consistent again quarter, with maturity debtholders significant and our our demonstrates and we loan This term a facility. rate. lien second we This are as our result a loans we team execute once an term into stability provides
will EBITDA the by minimize sales during of for the but which of to for in year-to-date. also quarter Dennis further result pandemic. improvements, a the his aggressive provide and included challenges the drive decline the helped portion significant light cost impact presented details efforts positive of presentation, Our the us
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A since highlight SG&A We or first, by items few XX% costs have million. significant to our have year-over-year regarding made this are; improved then. defined progress further $X.X
through million deployment, improvements relentlessly in the all and pursued a facility We We lean our generated events labor second negotiated Kaizen XX we the position Reynosa cost implemented which year effective million actions to the labor deployed and globe agreement during savings and run with have Rheda, generate between expect this alone, improved outcome Metals with across in full rate our our new Germany employees, $X $X quarter. for company.
significant leadership been Reynosa, and to have team improvements well-defined Second, a production throughput facility, thanks our plan. Mexico great at
principles The at come big lean renovation gains and four progress a of is our recognize up investment is the further capacity increased and fully presses these only eliminated of metrics, tied more XX%. incremental $XXX,XXX. significant capacity been able a deployment Coupler month to Jack is Hitch through core We’ve minimum up capital for throughput in improvements XXX%. products. over capacity have is of We four These on so into constraint are as provided the capacity XX%. sure. presses. these changes impact by be will recognized to for capacity we presses August, as with to up
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transform our partners Our up as employees we leadership this management as brought stepped and operation.
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are COVID-XX in prior see, and XX.X%. outpacing then net March the cumulative were period. year million through swept between can we lines during June, sales or $XX through you The decline sales year-over-year down Europe area February pandemic year-over-year and total the As in Americas. sales the before January the represents onto
the task no earlier, sales small address. decline I rapid said was and As severe to
sloped see, can the was significant rapid, but the of slope in recovery lines, the the impact direction. equally can you As as with and a is positive you also this see
the shutdown XX% we of the We continues in of to recovery XXX% were April. build. have XXXX in activities. the continue significant of since rates net queue height entered seen run million to Momentum new June roughly back outdoor sales rise in shift the In U.S. a with to as July. rate and as accessory to to consumer orders open in Towing Europe $XX take we continue behaviors the
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and of that order to elimination the appreciate the we to cost You efficiency recognize options. expect improvement with these multiple are sure
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of federal many recognize safety to deck. along deployment early the industry these CDC issue quarter aligned of response health with Relative applicable pandemic, one and local the COVID-XX We X. protocols and the and Page state to through Turning to our and points you’ll identified stringent practices, from earnings with attacked mandates. best our
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to objective drive levels our one of have We set the with our performance EBITDA being double-digit of calls. the constantly I speak through during them earnings
million levels were by just levels optimization foundation all is at also European drive hammering highlighted through that We I but We completed labor-related agreement SG&A will million result the actions to US$X completed to cost which cost file teamwork Our great Germany a that period. away team significant annual throughout optimization, actions during competitiveness in result and this, new Rheda, adds million flexibility one US$X.X we the and mentioned, and as between organizational XXX impact, the the other US$X in in costs region by that February of our bottom per has line roughly improvement forward was in to and pandemic with in the completed. were running while pursuit dramatic team new labor-related million January incremental X% roadmap points on We US$X and be outcome yet basis EBITDA work generated which business. at by to the significant A increasing year. items increase, move This the the matters. before done competitive at that plan ratified our reductions. tied facility, through and more labor employee an between with continuous – in improvements rank will X%
is well goal Our within reach.
second our XXXX. interest date Turning extending into term business early remain aligned June successfully single plan. we a the our In rate, loans while maturity to first to Covenants facility with equivalent XX. at XX, Page an refinanced July, and lien
teamwork to this Dennis of we financing work in as it great now over the at to turn plans. further to improvement for later look our now, continuous will our flexibility is back from through or situation financial you to for between we but through lenders stated opportunity to specifics have comments, earlier, take and some a another and come recognize closing refinancing, work further company but runway sales This, section. optimize Europe. releasing example our will collateral Dennis I’ll Additional July put we that a our debtholders. secured – resulted the the look our action tied that as execute for I I
it take Dennis, away. So
combined Terry. you a an and Good to term for July you, outstanding second XX Slide loans to and joining into for first update us. amendment everyone, morning, executed our Thank our turn thank balances On refinancing. we XXXX, of lien is a our the Please term on X, notes an refinance July due X, June in which rate and if days XX not are XXXX existing XXXX of XX.XX% a previous rates, Interest maturity maturity LIBOR retired. advance, currently similar springing XX, plus loan. of date are convertible to with
net December ending same to of of ratio term secured XX covenants unchanged, consolidated X.XX:X up the The of the X.X:X a covenant leverage was with the provides the period. and for results June first requires strategic FCCR at thereafter. coverage measurement the Slide amended flexibility loans XXXX. a into from remain XXXX, second to initial the an initiatives. to at above Please term for September XXXX, and ratio review require all-periods Further, at combination fixed an for charge FCCR the turn company’s for X:X enhanced XX, our execute of maturity While its single or loan XXXX amendment the company with quarter lien XX, fiscal XX, second extended quarter replacement and X.X:X
be a will all operations continuing basis. As a on reminder, results
primarily Therefore sales they of were results. result in sales the quarter of of all the year ongoing lower COVID-XX to The decline prior Consolidated APAC facilities of due previously the idled APAC Many financial response mentioned to period. temporarily was third in a pandemic. are million, discussion Horizon in presented net from decrease of in statements. XX.X% the $XXX.X COVID-XX for volumes restrictions sales. not the government our or operations a As included mandated the XXXX, the decline discontinued comparable is as periods were attributable classified quarter its of impacts the company’s million segment $XX.X in Global’s during to sale in of resulting
industrial achieve sales However, decrease pandemic, to of Europe-Africa we momentum the than segment. drove million facilities adjusted the Europe-Africa. sales attributable the the up is unfavorability decreased levels EBITDA operating from million was $XX.X OEM Americas $XX.X quarter, of comparable savings. also second operating we $X.X $XX,XXX, both by see in in year impacts XXXX. lower of million sudden SG&A began as the the net of and gross income million profit million related offset lower meet which period. loss prior in Net the margin unfavorable restrictions eased continued which million the volume $X worked to is in adjusted of demand. and to primarily of COVID second quarter compared $X.X year EBITDA the hard and OES decreased an the in Americas to aftermarket due the breakeven in in to declines, and Americas. COVID-XX has to of decreased quarter $XX.X result $XX.X OEM period. sales million declines reported segment. net quarter reported The sales Despite Lower Automotive comparable we and of and profit $XX.X decreased OES primarily the the Operating our were We million performance net positive an with our is and customer operating Retail, automotive ramped prior
year due prior or OES pandemic from for quarter, cost. was the of decreased margin million profit primarily XX, loss SG&A $XX.X lower volumes year On offset OEMs year Europe-Africa the net million, million, to automotive Net quarter, lower and We comparable Net our to to XX were Net This primarily attributable sales a its year the of comparable sales million the sales turn million an to compared as the million in the $X.X of than $XX.X the due in XX.X% The results. $XX.X flex decreased to segment. the to the decrease quarter than $X.X due period. period. comparable were $X.X million to the $X.X decrease COVID-XX aftermarket was compared OEM pandemic. company to production $X.X operations lower and in net by as the as closures. sales Transitioning were million from in decrease compared prior comparable discounts, year driven at period and decreased curtail We Americas $XX.X profit the lower Americas comparable loss in year EBITDA $XX.X volumes a in year quarter. operating net prior $X.X fines $XX.X year the of alignment compared down in Adjusted and million period $X.X lower penalties million, result million comparable earlier. related returns profit savings. full we’ve reflects prior distribution $X partially the year the comparable in lower $XX.X to by million prior COVID-XX the quarter, decrease and channel million profit million reduction to economic an totaling $XXX.X to a in partially to the channels shown sales to of during industrial gross reported or related reported Americas channels The sales segment, consolidated Automotive prior EBITDA operating for the was $X.X support OEM Slide million an comparable comparable from to the mentioned operating review XX.X% profit lower retail, the prior facilities uncertainties and million manufacturing million of sales decreased period. and period. Adjusted by prior operating compared OES cost $XX.X the sales operating of prior let’s million sales operating performance operating retail segment period. of the allowances gross in over period. the an SG&A to million profit the as offset period. Consolidated Slide primarily Now with in plant was $XX.X a also primarily
of Our and sales economic end net result of This unfavorability reported the OES $XX.X of by the automotive first the Decreased was in sales also million due sales $XX.X XXXX. business net late alignment We than decreased Europe-Africa lost Americas. COVID-XX in EBITDA, in impacts Adjusted uncertainties the the sales in were days decreased by comparable was is impacted $XX.X in net drove to gross our profit of a million disruption pandemic, uncertainties Retail, to million the reported EBITDA which volumes all year $XX.X the And a lower of we the million, SG&A $X.X of Operating our lower with in to year attributable began first decrease related year of segment. income of from associated million $XX.X prior and OEM comparable and $XX.X quarter. the loss million primarily in of COVID-XX of sales the adjusted OEM $X an decreased economic was the that lower markets net loss operating to production million half prior of Americas and the compared to period. in reported million industrial has closures Automotive an savings. offset million margin operating period. $X result million which response $XX.X COVID-XX. segment. in aftermarket sales plant net and OES in
year, the pandemic. for in of both reported the and EBITDA despite operations half the we COVID-XX of prior by was our overall efficiency positive significant to to the in lower hard evidenced and of as the EBITDA the first improve lower adjusted worked calls, fact The earnings lower Americas that our impact volumes primarily Europe-Africa. discussed adjusted have we due the As cost still
sales COVID-XX. We Now an prior a performance. offset primarily comparable cost. to let’s in operating period million in than an sales review operating $X.X of and closures period the the segment, the the OEM turn $XXX.X in first operating Net million year sales by sales lower segment. attributable period. million of by to Transitioning profit reduction channels channels comparable $XX.X over year savings. manufacturing the to million to prior $X.X lower a operating to as period. lower Americas for $XX.X in plant $X.X the reported profit million, lower gross a in million to period. compared margin with alignment year-to-date and prior million year partially EBITDA facilities net and result cost year our prior economic decreased of loss operating of sales Europe-Africa to and OEM $X.X $XX segment retail Americas compared SG&A year $XX.X compared industrial Slide lost its million as to profit an were flex of the the uncertainties at the automotive the net of loss were comparable the half decreased was to distribution was in OES of XX OES million than gross $X the aftermarket period during Net earlier. $XX.X to year down, lower COVID-XX compared profit sales to the pandemic. comparable due million The as lower primarily the company million from an offset Adjusted support decrease operations $XXX,XXX operating totaling $XX.X response volumes period. $X.X This the period, $X.X was or mentioned comparable of The and Adjusted to in EBITDA primarily the of to was comparable operating year year, decreased We prior comparable prior lower a XX.X% profit prior result million from as in SG&A production the the million period. reported days $XXX.X by driven $XX volumes million decreased million Automotive decrease in due million
as to Total decrease in million quarter quarter compared to sheet represented working trade XX. and compared fourth the a XXXX. position million total on the to of capital which and our of Slide $XX.X million XXXX of balance $XX.X of on moving Now second quarter a decrease liquidity $XX.X the second of XXXX,
$X.X $XX.X increased Inventory to compared Days quarter to hand compared XX, XXXX. increase quarter Inventory days was second the fourth of XX XXXX. of XXX of to $XX.X increase quarter receivable payable the quarter compared as as of of on decreased XXXX. million million days, as XX an increased $XX.X the accounts fourth quarter quarter an an hand second outstanding of fourth the to XXXX. as compared compared $XX.X of to to compared sales Accounts Days days, of million Specifically second six to million XXXX. on days the to days days was was the payable million to $XXX.X of XXXX. as million increase XX
and the first third basis. capitalization and quarter the form offset liquidity that prior during debt lien of million we management, pay of leverage XXXX uncertainties of from $XXX.X decreased of the to result PPP into as and the Turning $XXX.X response XXXX. down million decreased Taking our to in $XXX.X period, in additional COVID-XX our by our economic of ABL consideration, all term second increased the the partially SBA significantly year-over-year our million the on debt on to a borrowings the quarter in loans in French total a year gross leverage, by have and debt of in
able quarter the of Terry to on comments. second the it We the under our our improvement that the initiatives, operational and business business. and $XX.X comprised COVID-XX liquidity, I deliver managing his back With meet uncertainties will million. economic hand is facility including turn for believe and to availability run to that, company $XX.X will on As of our totaled through for million, closing impact needs was to $XX.X of its XXXX disruptions related million liquidity ABL cash of which business
you, Dennis. Thank
surge million truly July inflection supports Turning sales buying while that exceeding the Americas leading point is XX, sales XX%. the extended. represented year both exactly what of also had This and is regions sales strength net stat million. being highlights of August recovery market, resulted by net orders and smash Page and that it levels. and traditional prior That the $XX volumes XX open to to its XXXX into demand compared roughly a continued securing alone over the of in of Europe-Africa the the season over holding Americas
the great OEM. able We to continue significant products, were business XXXX our line, great combination sales continued These for a with region X%, August. period in story. well We book-to-order a much strong OEM compared of a outlook. recovered during Europe-Africa leading is all the favorability to roughly takes our call sales in is month outsell pointing on XX% sales by condition e-Commerce into mix same and the aftermarket to and see presenting we and in businesses, in makeup increases to rates
an the Turning to you in illustrating XX, month. here shown Page each we month, North our Each orders backlog sales. of we the increase are American have at of end open net
So increased pace. we an are shipping at
page that. What continues to see, customers our can the partners, capacity with our are intake outpace since these with orders gross in rate, turn along orders summary order I a North will these well supply then. a strong the and you the is to to next Reynosa, in pace support positioned XXXX As to sales, execute American recognize you we from of orders continuing sales full-August last on the implemented this in with place the increase XX% see company’s increased the represent to day at strong fill order-intake that July, on
pandemic well. Page XX, hit the extremely on We summary hard. reacted in So
period. significant time review the safe Take a capacity, represent team. The this the for metrics X truly work providing efficiency the by work our it, are that we environment most have in people. great critical to you secured improvements when our the We on operational presented, during and Horizon team Page asset, and drove quality
XX% has significantly reset maturities a improvements debt capital position our liquidity improved spend. working in in through solid We and and SG&A improvement our refinancing resulting streamlined Our executed been successful options.
have on performance with significant foundation laid work a and by COGS to the team We going-forward, European solid the recovery actions completed outstanding address in SG&A for our that.
and our we’ve the a delivering methods, deal. achieved through We have metrics. improved quality increased operating are We distribution great we to rising the in-short capacity of our we��ve challenge generated marketplace volumes streamlined increased that in
and and turn over the will for not to support. for your not I have attention now have We operator gas. much it foot-off a for Thank roadmap we back the take will your more, you continued questions. and our
to the And ladies remarks. I’d over the gentlemen, and Terry turn conference like for question-and-answer any session. to final this concludes back Gohl
very your your say to I’d Well, and again for much thank in you support. closing like attention
Some of we day you or two. next will calls follow-up have the we’ve over had – with
forward look we So to going. stay momentum healthy those. everyone, But Thank much. very safe, please keep stay for and let’s you this
sir. concludes This today’s you, Thank call. conference
and a wonderful lines You may day. your now have disconnect
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