RV equipment supplier Horizon Global announced preliminary fourth quarter and full-year financial results for 2021, and the company said that in Q4, net sales were approximately $164.3 million, an $11.6 million decrease compared to fourth quarter of 2020.
The company reported a loss from continuing operations – before income tax, of approximately $20 million.
For the full year, net sales were $782.1 million, an approximate $120.9 million increase compared to the prior year. Still, loss from continuing operations before income tax for the full year 2021 was approximately $34, an improvement of a few million dollars compared to the prior year.
“We are disappointed with our fourth quarter 2021 financial performance, which was adversely affected by short-term, industry-wide supply chain headwinds,” said Terry Gohl, Horizon Global’s president and CEO. “We remain focused on long-term value creation and continue to identify and execute operational improvement initiatives across our global operations. Further, with our iconic brands and strong open order book of approximately $58.8 million in North America at the end of 2021, which reflects a 17.4 percent increase over the end of 2020, we expect to progress against our long-term financial objectives in 2022 and beyond. When we release our fourth quarter and full year 2021 earnings in March, we will give a more detailed outlook on our positive view of 2022 and why we remain confident in achieving our long-term financial targets, including double-digit adjusted EBITDA margins.”
At the same time as the preliminary release of earnings, the company announced an agreement with Atlantic Park Strategic Capital Fund, with which the company has a term loan. Horizon Global struck an agreement to amend its loan, and that term loan agreement amendment provides for a $35 million draw on the company’s existing loan facility. Net proceeds from the draw will be used for working capital purposes and to fund low-cost country expansion in the company’s Europe-Africa segment.
“We’d like to thank two of our largest stakeholders, Corre (Partners Management) and Atlantic Park, for their continued support of our long-term strategic plan as we addressed macroeconomic headwinds through the fourth quarter of 2021 and into early 2022,” said Gohl. “Increasing supply chain constraints throughout the quarter and persistent microchip shortages leading to sudden OE production shutdowns throttled our ability to invoice against an otherwise historically strong open order book. Inventories significantly increased given delays in logistics from an abnormally high level of port traffic and we experienced significant operational inefficiencies in many jurisdictions where we are unable to rapidly flex our labor force to match our ability to produce. We expect this funding to support our temporary working capital needs as we improve our inventory turns, allowing us to better and more reliably fill open orders and service continued heightened demand levels during the upcoming selling season.”
Gohl added, “Additionally, the funds will also support our strategy to benefit from a continued expansion of our low-cost country manufacturing facility in eastern Europe. Despite industry-wide supply chain headwinds, we continue to take actions to improve the foundation of our business, and we expect this investment to solidify the company as a best-in-class, cost-competitive supplier to our major OEM customers in Europe.”