Horizon Global Delivers Profit Improvement for Fourth Consecutive Quarter
Second Quarter 2016 Highlights
- Operating profit more than doubled from $5.4 million to $11.1 million
- Operating profit margin increased to 6.6 percent, up 320 basis points
-
Adjusted operating profit(1) margin improved to 10.3
percent, up 380 basis points -
Adjusted segment operating profit(1) margin improved to
13.0 percent, up 400 basis points
-
Net sales increased from $158.5 million to $167.8 million, up 5.8
percent
- Net sales increased 7.1 percent on a constant currency basis(2)
- Diluted earnings per share more than tripled from $0.12 to $0.40
-
Adjusted diluted earnings per share(3) more than doubled to
$0.64
- Generated operating cash flow greater than net income
-
Leverage ratio improved to 3.1 times(4) as of June 30,
2016, down from 3.8 times(4) one year ago
TROY, Mich.–(BUSINESS WIRE)–Horizon Global Corporation (NYSE: HZN), one of the world’s leading
manufacturers of branded towing and trailering equipment, reported
strong second quarter earnings, reflecting a continued focus on
execution while advancing key financial priorities.
“We capped off our first twelve months as a public company with a strong
performance in the second quarter as we saw solid revenue growth, strong
margin expansion and a reduction in leverage. Our accomplishments in our
first twelve months include nearly doubling operating profit, improving
operating margin by 300 basis points, more than doubling net income and
reducing our leverage ratio,” said A. Mark Zeffiro, President and Chief
Executive Officer of Horizon Global. “We continue to execute against our
strategic plan, focusing on our three key financial priorities of
increasing operating margins, improving our capital structure and
growing our revenues. Our automotive OE and aftermarket channels
improved over the prior year with e-Commerce doing particularly well.
Our results in the second quarter are indicative of our ability to
improve operations in the near term while remaining focused on long term
value creation.”
2016 Second Quarter Segment Highlights
Horizon North America. Net sales increased 8.7 percent,
with strong volume in e-commerce, automotive aftermarket and automotive
original equipment (OE) channels, offset by declines in retail and
industrial channels. Operating profit increased $5.2 million to $13.5
million, or 10.6 percent of net sales, due to higher sales, favorable
product mix, and lower input costs. Adjusted operating profit(1)
increased $7.0 million to $19.4 million, or 15.3 percent of net sales.
Horizon International. Net sales decreased 2.2 percent on
a reported basis, but increased 2.7 percent on a constant currency basis(2),
driven by strong growth in the OE channel, both in new and existing
programs. Operating profit increased $1.0 million to $2.2 million, or
5.3 percent of net sales, as a result of increased volume, productivity
initiatives and lower selling costs. Adjusted operating profit(1)
increased $0.5 million to $2.4 million, or 5.9 percent of net sales.
Outlook
Guidance issued for the year ended December 31, 2016 remains the same as
issued on March 1, 2016:
-
Net sales growth of 2 to 4 percent on a GAAP basis and 3 to 5 percent
on a constant currency basis(5) - Adjusted segment operating profit increasing more than 100 basis points(6)
-
Net cash conversion greater than 100 percent of net income (operating
cash flow as a percent of net income)
“Margin improvement remains our number one priority, and our results in
the first half of 2016 reflect our ongoing commitment to achieving a
10.0 percent operating margin. The consolidation of our facilities in
Mexico is complete and the integration of the Horizon North America
businesses is on track. Our core business model of building strong
brands while driving customer value is showing results. Through our
focus on lean and productivity, along with specific margin improvements,
we achieved a 400 basis point improvement in adjusted segment operating
margins,” said Zeffiro.
“Our outlook for 2016 remains consistent with our previous guidance.
Softening consumer confidence in North America along with signs of
inflation has resulted in uncertain global order patterns. We continue
to show improvements in our business and execute on our strategic plans
as we lay the foundation for our business beyond today and focus on
product innovation to strengthen our competitive advantage.”
Conference Call Details
Horizon Global will host a conference call regarding second quarter 2016
earnings on Tuesday, August 9, 2016 at 8:30 a.m. Eastern Time.
Participants in the call are asked to register five to ten minutes prior
to the scheduled start time by dialing (844) 711-8052 and from outside
the U.S. at (832) 900-4641. Please use the conference identification
number 47839715.
The conference call will be webcast simultaneously and in its entirety
through the Horizon Global website. An earnings presentation will also
be available on the Horizon Global website at the time of the conference
call. Shareholders, media representatives and others may participate in
the webcast by registering through the Investor Relations section on the
Company’s website.
A replay of the call will be available on Horizon Global’s website or by
phone by dialing (800) 585-8367 and from outside the U.S. at (404)
537-3406. Please use the conference identification number 47839715. The
telephone replay will be available approximately two hours after the end
of the call and continue through August 25, 2016.
About Horizon Global
Headquartered in Troy, Michigan, Horizon Global Corporation (NYSE: HZN)
is a leading designer, manufacturer and distributor of industry leading
high-quality, custom-engineered towing, trailering, cargo management and
related accessory products for original equipment, aftermarket and
retail channel customers on a global basis. Our mission is to utilize
forward-thinking technology to develop and deliver best-in-class
products for our customers, engage with our employees and realize value
creation for our shareholders. For more information, please visit www.horizonglobal.com.
Safe Harbor Statement
This earnings release may contain “forward-looking statements” as
defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements contained herein speak only as of the date
they are made and give our current expectations or forecasts of future
events. These forward-looking statements can be identified by the use of
forward-looking words, such as “may,” “could,” “should,” “estimate,”
“project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,”
“target,” “plan” or other comparable words, or by discussions of
strategy that may involve risks and uncertainties. These forward-looking
statements are subject to numerous assumptions, risks and uncertainties
which could materially affect our business, financial condition or
future results including, but not limited to, risks and uncertainties
with respect to: the Company’s leverage; liabilities imposed by the
Company’s debt instruments; market demand; competitive factors; supply
constraints; material and energy costs; technology factors; litigation;
government and regulatory actions; the Company’s accounting policies;
future trends; general economic and currency conditions; various
conditions specific to the Company’s business and industry; the spin-off
from TriMas Corporation; and other risks that are discussed in the
Company’s most recent Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q or Current Reports on Form 8-K. The risks described herein are
not the only risks facing our Company. Additional risks and
uncertainties not currently known to us or that we currently deemed to
be immaterial also may materially adversely affect our business,
financial position and results of operations or cash flows. We caution
readers not to place undue reliance on such statements, which speak only
as of the date hereof. We do not undertake any obligation to review or
confirm analysts’ expectations or estimates or to release publicly any
revisions to any forward-looking statement to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
(1) |
Please refer to “Company and Business Segment Financial Information,” which details certain costs, expenses, other charges, collectively described as ”Special Items,” that are included in the determination of operating profit under GAAP, but that management would consider important in evaluating the quality of the Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities. Accordingly, the Company presents adjusted operating profit excluding these Special Items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. |
|
(2) |
We evaluate growth in our operations on both an as reported basis and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our growth, consistent with how we evaluate our performance. Constant currency revenue results are calculated by translating current period revenue in local currency using the prior period’s currency conversion rate. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Our use of this term may vary from the use of similarly-titled measures by other issuers due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. See Appendix II for reconciliation. |
|
(3) |
Appendix I details certain costs, expenses, and other charges, collectively described as ”Special Items,” that are included in the determination of net income under GAAP, but that management would consider important in evaluating the quality of the Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities. Accordingly, the Company presents adjusted net income and adjusted diluted earnings per share excluding these Special Items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. |
|
(4) |
Appendix III reconciles net income to “Consolidated Bank EBITDA” as defined in our credit agreement. We believe this reconciliation provides valuable supplemental information regarding our capital structure, consistent with how we evaluate our performance. Leverage ratio is calculated by dividing “Total Consolidated Indebtedness” by “Consolidated Bank EBITDA”. “Total Consolidated Indebtedness” is defined as total Company debt less domestic cash. Domestic cash as of June 30, 2016 and 2015 was $16.1 million and $1.5 million, respectively. |
|
(5) |
We evaluate growth in our operations on both an as reported basis and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our growth, consistent with how we evaluate our performance. Constant currency revenue results are calculated by translating current period revenue in local currency using the prior period’s currency conversion rate. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Our use of this term may vary from the use of similarly-titled measures by other issuers due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. See Appendix V for reconciliation of the Company’s 2016 guidance of revenue growth on a constant currency basis to growth on a GAAP basis. |
|
(6) |
Excluding “Special Items”. Included in Appendix V, “2016 Guidance Reconciliation”, this non-GAAP measure has been reconciled to the most comparable GAAP measure. “Special Items” detail certain costs, expenses, and other charges that are included in the determination of operating profit under GAAP, but that management would consider important in evaluating the quality of the Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities. |
|
Horizon Global Corporation | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Dollars in thousands) | |||||||
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 31,040 | $ | 23,520 | |||
Receivables, net | 88,540 | 63,050 | |||||
Inventories | 107,600 | 119,470 | |||||
Prepaid expenses and other current assets | 6,880 | 5,120 | |||||
Total current assets | 234,060 | 211,160 | |||||
Property and equipment, net | 46,430 | 45,890 | |||||
Goodwill | 5,440 | 4,410 | |||||
Other intangibles, net | 51,830 | 56,020 | |||||
Deferred income taxes | 4,760 | 4,500 | |||||
Other assets | 10,320 | 9,600 | |||||
Total assets | $ | 352,840 | $ | 331,580 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Current maturities, long-term debt | $ | 12,490 | $ | 10,130 | |||
Accounts payable | 79,760 | 78,540 | |||||
Accrued liabilities | 40,910 | 39,820 | |||||
Total current liabilities | 133,160 | 128,490 | |||||
Long-term debt | 184,280 | 178,610 | |||||
Deferred income taxes | 2,970 | 2,910 | |||||
Other long-term liabilities | 18,640 | 19,570 | |||||
Total liabilities | 339,050 | 329,580 | |||||
Commitments and contingent liabilities | — | — | |||||
Total shareholders’ equity | 13,790 | 2,000 | |||||
Total liabilities and shareholders’ equity | $ | 352,840 | $ | 331,580 |
Horizon Global Corporation | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
(Unaudited – dollars in thousands, except per share amounts) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net sales | $ | 167,760 | $ | 158,540 | $ | 313,870 | $ | 300,900 | ||||||||
Cost of sales | (122,050 | ) | (120,790 | ) | (230,550 | ) | (227,850 | ) | ||||||||
Gross profit | 45,710 | 37,750 | 83,320 | 73,050 | ||||||||||||
Selling, general and administrative expenses | (31,970 | ) | (30,550 | ) | (61,660 | ) | (62,190 | ) | ||||||||
Impairment of intangible assets | (2,240 | ) | — | (2,240 | ) | — | ||||||||||
Net loss on dispositions of property and equipment | (380 | ) | (1,840 | ) | (490 | ) | (1,790 | ) | ||||||||
Operating profit | 11,120 | 5,360 | 18,930 | 9,070 | ||||||||||||
Other expense, net: | ||||||||||||||||
Interest expense | (4,230 | ) | (120 | ) | (8,500 | ) | (240 | ) | ||||||||
Other expense, net | (560 | ) | (720 | ) | (1,170 | ) | (1,970 | ) | ||||||||
Other expense, net | (4,790 | ) | (840 | ) | (9,670 | ) | (2,210 | ) | ||||||||
Income before income tax credit (expense) | 6,330 | 4,520 | 9,260 | 6,860 | ||||||||||||
Income tax credit (expense) | 1,000 | (2,320 | ) | 260 | (3,180 | ) | ||||||||||
Net income | $ | 7,330 | $ | 2,200 | $ | 9,520 | $ | 3,680 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.40 | $ | 0.12 | $ | 0.53 | $ | 0.20 | ||||||||
Diluted | $ | 0.40 | $ | 0.12 | $ | 0.52 | $ | 0.20 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 18,162,451 | 18,062,027 | 18,130,081 | 18,062,027 | ||||||||||||
Diluted | 18,319,068 | 18,134,475 | 18,260,246 | 18,134,475 |
Horizon Global Corporation | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(Unaudited – dollars in thousands) | ||||||||
Six months ended | ||||||||
June 30, | ||||||||
2016 | 2015 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 9,520 | $ | 3,680 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: |
||||||||
Loss on dispositions of property and equipment | 490 | 1,790 | ||||||
Depreciation | 4,990 | 5,080 | ||||||
Amortization of intangible assets | 3,640 | 3,720 | ||||||
Impairment of intangible assets | 2,240 | — | ||||||
Amortization of original issuance discount and debt issuance costs | 930 | |||||||
Deferred income taxes | (370 | ) | 980 | |||||
Non-cash compensation expense | 1,830 | 1,270 | ||||||
Increase in receivables | (23,870 | ) | (31,110 | ) | ||||
(Increase) decrease in inventories | 12,540 | (4,140 | ) | |||||
Increase in prepaid expenses and other assets | (1,580 | ) | (1,630 | ) | ||||
Increase (decrease) in accounts payable and accrued liabilities | (2,680 | ) | 12,800 | |||||
Other, net | (270 | ) | 670 | |||||
Net cash provided by (used for) operating activities | 7,410 | (6,890 | ) | |||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (6,670 | ) | (4,140 | ) | ||||
Net proceeds from disposition of property and equipment | 240 | 1,470 | ||||||
Net cash used for investing activities | (6,430 | ) | (2,670 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from borrowings on credit facilities | 36,770 | 73,100 | ||||||
Repayments of borrowings on credit facilities | (37,280 | ) | (65,410 | ) | ||||
Proceeds from Term B Loan, net of issuance costs | — | 192,970 | ||||||
Repayments of borrowings on Term B Loan | (5,000 | ) | — | |||||
Proceeds from ABL Revolving Debt | 81,930 | 7,720 | ||||||
Repayments of borrowings on ABL Revolving Debt | (71,930 | ) | — | |||||
Proceeds from borrowings on Vendor Financing | 2,390 | — | ||||||
Net transfers from former parent | — | 27,630 | ||||||
Cash dividend paid to former parent | — | (214,500 | ) | |||||
Shares surrendered upon vesting of employees’ share based payment awards to cover tax obligations |
(260 | ) | — | |||||
Net cash provided by financing activities | 6,620 | 21,510 | ||||||
Effect of exchange rate changes on cash | (80 | ) | (620 | ) | ||||
Cash and Cash Equivalents: | ||||||||
Increase for the period | 7,520 | 11,330 | ||||||
At beginning of period | 23,520 | 5,720 | ||||||
At end of period | $ | 31,040 | $ | 17,050 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 7,510 | $ | 220 |
Horizon Global Corporation | ||||||||||||||||
Company and Business Segment Financial Information | ||||||||||||||||
(Unaudited – dollars in thousands) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Horizon North America | ||||||||||||||||
Net sales | $ | 126,860 | $ | 116,710 | $ | 235,590 | $ | 220,290 | ||||||||
Operating profit | $ | 13,470 | $ | 8,240 | $ | 23,580 | $ | 14,140 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 3,630 | $ | 2,250 | $ | 4,330 | $ | 2,470 | ||||||||
Loss on software disposal | $ | — | $ | 1,870 | $ | — | $ | 1,870 | ||||||||
Impairment of intangible assets | $ | 2,280 | $ | — | $ | 2,280 | $ | — | ||||||||
Adjusted operating profit | $ | 19,380 | $ | 12,360 | $ | 30,190 | $ | 18,480 | ||||||||
Horizon International | ||||||||||||||||
Net sales | $ | 40,900 | $ | 41,830 | $ | 78,280 | $ | 80,610 | ||||||||
Operating profit | $ | 2,160 | $ | 1,210 | $ | 4,610 | $ | 3,480 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 260 | $ | 750 | $ | 280 | $ | 1,060 | ||||||||
Adjusted operating profit | $ | 2,420 | $ | 1,960 | $ | 4,890 | $ | 4,540 | ||||||||
Operating Segments | ||||||||||||||||
Operating profit | $ | 15,630 | $ | 9,450 | $ | 28,190 | $ | 17,620 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 3,890 | $ | 3,000 | $ | 4,610 | $ | 3,530 | ||||||||
Loss on software disposal | $ | — | $ | 1,870 | $ | — | $ | 1,870 | ||||||||
Impairment of intangible assets | $ | 2,280 | $ | — | $ | 2,280 | $ | — | ||||||||
Adjusted operating profit | $ | 21,800 | $ | 14,320 | $ | 35,080 | $ | 23,020 | ||||||||
Corporate Expenses | ||||||||||||||||
Operating loss | $ | (4,510 | ) | $ | (4,090 | ) | $ | (9,260 | ) | $ | (8,550 | ) | ||||
Total Company | ||||||||||||||||
Net sales |
$ | 167,760 | $ | 158,540 | $ | 313,870 | $ | 300,900 | ||||||||
Operating profit | $ | 11,120 | $ | 5,360 | $ | 18,930 | $ | 9,070 | ||||||||
Total Special Items to consider in evaluating operating profit | $ | 6,170 | $ | 4,870 | $ | 6,890 | $ | 5,400 | ||||||||
Adjusted operating profit | $ | 17,290 | $ | 10,230 | $ | 25,820 | $ | 14,470 |
Appendix I | ||||||||||||||||
Horizon Global Corporation | ||||||||||||||||
Additional Information Regarding Special Items Impacting | ||||||||||||||||
Reported GAAP Financial Measures | ||||||||||||||||
(Unaudited – dollars in thousands, except per share amounts) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income, as reported | $ | 7,330 | $ | 2,200 | $ | 9,520 | $ | 3,680 | ||||||||
Impact of Special Items to consider in evaluating quality of income: |
||||||||||||||||
Severance and business restructuring costs | 3,890 | 3,000 | 4,610 | 3,530 | ||||||||||||
Loss on software disposal | — | 1,870 | — | 1,870 | ||||||||||||
Impairment of intangible assets | 2,280 | — | 2,280 | — | ||||||||||||
Tax impact of Special Items | (1,850 | ) | (1,530 | ) | (1,980 | ) | (1,660 | ) | ||||||||
Adjusted net income | $ | 11,650 | $ | 5,540 | $ | 14,430 | $ | 7,420 | ||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Diluted earnings per share, as reported | $ | 0.40 | $ | 0.12 | $ | 0.52 | $ | 0.20 | ||||||||
Impact of Special Items to consider in evaluating quality of EPS: | ||||||||||||||||
Severance and business restructuring costs | 0.21 | 0.17 | 0.25 | 0.19 | ||||||||||||
Loss on software disposal | — | 0.10 | — | 0.10 | ||||||||||||
Impairment of intangible assets | 0.13 | — | 0.13 | — | ||||||||||||
Tax impact of Special Items | (0.10 | ) | (0.08 | ) | (0.11 | ) | (0.09 | ) | ||||||||
Adjusted earnings per share | $ | 0.64 | $ | 0.31 | $ | 0.79 | $ | 0.40 | ||||||||
Weighted-average shares outstanding, diluted | 18,319,068 | 18,134,475 | 18,260,246 | 18,134,475 |
Appendix II |
||||||||||||||||||
Horizon Global Corporation | ||||||||||||||||||
Reconciliation of Reported Revenue Growth | ||||||||||||||||||
to Constant Currency Basis | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||
June 30, 2016 | June 30, 2016 | |||||||||||||||||
Horizon | Horizon | |||||||||||||||||
North | Horizon | North | Horizon | |||||||||||||||
Consolidated | America | International | Consolidated | America | International | |||||||||||||
Revenue growth as reported | 5.8 | % | 8.7 | % | (2.2 | )% | 4.3 | % | 6.9 | % | (2.9 | )% | ||||||
Less: currency impact | (1.3 | )% | — | % | (4.9 | )% | (2.0 | )% | — | % | (7.6 | )% | ||||||
Revenue growth at constant currency | 7.1 | % | 8.7 | % | 2.7 | % | 6.3 | % | 6.9 | % | 4.7 | % |
Appendix III | ||||||||||||||||
Horizon Global Corporation | ||||||||||||||||
LTM Bank EBITDA as Defined in Credit Agreement | ||||||||||||||||
(Unaudited – dollars in thousands) | ||||||||||||||||
Less: | Add: | |||||||||||||||
Year Ended | Twelve Months | |||||||||||||||
December 31, | Six Months Ended | Six Months Ended | Ended June 30, | |||||||||||||
2015 | June 30, 2015 | June 30, 2016 | 2016 | |||||||||||||
Net income | $ | 8,300 | $ | 3,680 | $ | 9,520 | $ | 14,140 | ||||||||
Bank stipulated adjustments: | ||||||||||||||||
Interest expense, net (as defined) | 8,810 | 240 | 8,500 | 17,070 | ||||||||||||
Income tax expense (benefit) | (1,280 | ) | 3,180 | (260 | ) | (4,720 | ) | |||||||||
Depreciation and amortization | 17,080 | 8,800 | 8,630 | 16,910 | ||||||||||||
Non-cash compensation expense(1) | 2,530 | 1,270 | 1,830 | 3,090 | ||||||||||||
Other non-cash expenses or losses | 11,350 | 10,930 | 900 | 1,320 | ||||||||||||
Non-recurring expenses or costs (as defined)(2) | 5,000 | 3,530 | 4,250 | 5,720 | ||||||||||||
Impairment of intangible assets | — | — | 2,280 | 2,280 | ||||||||||||
Interest-equivalent costs associated with any Specified Vendor Receivables Financing |
900 | 330 | 530 | 1,100 | ||||||||||||
Consolidated Bank EBITDA, as defined | $ | 52,690 | $ | 31,960 | $ | 36,180 | $ | 56,910 |
June 30, 2016 | |||
Total Consolidated Indebtedness(4) | $ | 178,110 | |
Consolidated Bank EBITDA, as defined | 56,910 | ||
Actual leverage ratio | 3.13 x | ||
Covenant requirement | 5.25 x |
Less: | Add: | ||||||||||||||
Year Ended | Twelve Months | ||||||||||||||
December 31, | Six Months Ended | Six Months Ended | Ended June 30, | ||||||||||||
2014 | June 30, 2014 | June 30, 2015 | 2015 | ||||||||||||
Net income | $ | 15,350 | $ | 13,200 | $ | 3,680 | $ | 5,830 | |||||||
Bank stipulated adjustments: | |||||||||||||||
Interest expense, net (as defined) | 720 | 360 | 240 | 600 | |||||||||||
Income tax expense | 5,240 | 4,190 | 3,180 | 4,230 | |||||||||||
Depreciation and amortization | 18,930 | 9,740 | 8,800 | 17,990 | |||||||||||
Non-cash compensation expense(1) | 2,660 | 1,570 | 1,270 | 2,360 | |||||||||||
Other non-cash expenses or losses | 15,260 | 8,620 | 10,930 | 17,570 | |||||||||||
Non-recurring expenses or costs (as defined)(2) | 4,440 | 2,440 | 3,530 | 5,530 | |||||||||||
Acquisition integration costs(3) | 90 | 60 | — | 30 | |||||||||||
Interest-equivalent costs associated with any Specified Vendor Receivables Financing |
870 | 320 | 330 | 880 | |||||||||||
Consolidated Bank EBITDA, as defined | $ | 63,560 | $ | 40,500 | $ | 31,960 | $ | 55,020 |
June 30, 2015 | |||
Total Consolidated Indebtedness(4) | $ | 210,370 | |
Consolidated Bank EBITDA, as defined | 55,020 | ||
Actual leverage ratio | 3.82 x | ||
Covenant requirement | 5.25 x |
______________
(1) |
Non-cash compensation expenses resulting from the grant of restricted shares of common stock and common stock options. Includes amounts allocated by former parent company. |
|
(2) |
Under our credit agreement, costs and expenses related to cost savings projects, including restructuring and severance expenses, are not to exceed $5 million in any fiscal year and $15 million in aggregate, commencing on or after January 1, 2015. |
|
(3) |
Costs and expenses arising from the integration of any business acquired not to exceed $7.5 million in any fiscal year $20 million in the aggregate. |
|
(4) |
“Total Consolidated Indebtedness” refers to the sum of “long-term |
|
Appendix IV
Horizon Global Corporation |
LTM Reconciliation |
(Unaudited – dollars in millions) |
The following provides a reconciliation of results for the twelve months
ended June 30, 2016 and 2015.
Contacts
Horizon Global Corporation
Maria C. Duey
Vice President,
Corporate Development & Investor Relations
(248) 593-8810
mduey@horizonglobal.com