Horizon Global Corp., a manufacturer of branded towing and trailering equipment, has reported that net sales for the third quarter ended Sept. 30 declined 2.9 percent to $153.3 million.
Net sales increased 2.6 percent compared to the third quarter of 2014, driven by growth in retail, eCommerce and aftermarket channels. Operating profit increased 9.4 percent to $8.6 million, from $7.9 million in the third quarter of 2014. Excluding Special Items, operating profit increased 35.5 percent to $11.7 million or 7.6 percent of sales, from $8.6 million or 5.5 percent of sales in the third quarter of 2014.
Cequent Americas net sales increased 2.6 percent, with volume especially strong in the retail channel. Cequent Americas operating profit increased to $10.7 million or 25 percent over the same period in 2014 due to continued productivity improvements, reduced SG&A and lower input costs. Excluding Special Items, Cequent Americas operating profit increased to $13.8 million or 54 percent over the same period in 2014.
Cequent APEA net sales declined 17 percent on a reported basis, but remained relatively flat on a constant currency basis, including a 9 percent increase on a constant currency basis in Australia. Cequent APEA operating profit decreased to $1.7 million due to less favorable product mix and supply constraints.
“We are proud of what we have accomplished in our first quarter operating as a stand-alone, independent public company. Much has been accomplished in our first 90 days, including establishing a company with a culture, vision, and mission that aligns to our objectives for value creation. In addition, we have made significant progress towards execution of our three financial priorities,” said A. Mark Zeffiro, president and CEO of Horizon Global. “First, we are on track to achieve our near-term margin target of 10 percent on a segment basis, with the third quarter segment margin improving to 10.1 percent, excluding special Items. We continue to work on a number of actions geared toward profitability improvement. Second, our cash generation in the quarter coupled with our working capital management resulted in a reduction in our leverage ratio to 3.6 times, with $28 million of cash on hand and total cash available of $98 million. Finally, our revenues were up 2.6 percent on a constant currency basis, driven by retail, eCommerce and aftermarket growth.”