Horizon Global Corp. has reported financial results for the third quarter of 2019, showing net sales decreased $16.2 million, or 8.3 percent, to $177.9 million from the prior year. This was primarily attributed to lower net sales in Horizon Americas.
There was an operating loss of $12.8 million, or 7.2 percent of net sales. This was an improvement of $17.1 million over the prior year, primarily due to a $26.6 million goodwill impairment charge recorded in third quarter 2018.
“I am encouraged by the strength of our brands, the ongoing support of our customers, and the opportunity to return this proud company to the leadership position it deserves,” said Terry Gohl, newly appointed president and CEO. “Over the past six weeks, since being tapped to lead Horizon Global, I have toured our primary manufacturing operations in Mexico and Europe. I have met with our teams in each of these geographies and assessed our operating position and associated challenges. Based on this early assessment, we identified actions that we believe will accelerate improvements in quality and time-to-market, and which we expect to result in improved margins and cash flow in the coming quarters.”
Net sales in the Americas decreased $19.3 million, or 16.7 percent, to $96.2 million. Net sales in the aftermarket, retail and industrial channels were $18.1 million lower than the prior-year comparable period, while e-commerce net sales were down $1.7 million. These decreases were partially offset by OE net sales, which increased $1 million.
Gross profit decreased $10.5 million, primarily due to the decrease in net sales and unfavorable material input costs as a result of the impact of tariffs and higher freight costs, unfavorable manufacturing costs and higher scrap costs.
Horizon Americas generated an operating loss of $2.2 million, representing a decrease of $9.5 million from the prior-year comparable period.
Net sales Europe and Africa increased $3.1 million, or 4 percent, to $81.6 million due primarily to increased net sales in the automotive OEM and OES channels. Gross profit increased $4.3 million, primarily due to a favorable expense recovery related to the settlement of a potential product liability claim.
“We faced significant headwinds in our Americas operations during the third quarter, with operational and execution issues negatively impacting our ability to fill orders in the aftermarket, retail and industrial channels, resulting in lost sales, while the impact of tariffs and higher manufacturing costs impacted profitability, all while our Europe-Africa operations reported slightly higher sales and increased margins over the prior-year comparable period, with the increase in margin primarily due to a favorable commercial settlement of a potential product liability claim,” said Gohl. “There is no doubt that everyone around the globe is disappointed with our results, and there is an equal amount of passion to make certain we improve them.”
