Despite a negative quarter, Horizon Global’s CEO said his company remains laser-focused on boosting sales and cutting costs.
The company had net sales in the quarter of $181.2 million, a nearly $41 decrease from the second quarter of last year. Its gross profit was $20.7 million, a $26.6 million decrease from Q2 in 2021.
“We entered the quarter with inventory levels positioned to meet expected seasonal demand levels for our higher margin non-OE business,” said Terry Gohl, Horizon Global’s president and CEO. “Seasonal demand fell significantly below our expectations as many of our larger customers deployed their own elevated inventories to service the market. This led to lower than expected in-bound orders and reduced volumes in our higher margin sales channels, which resulted in lower net sales and an unfavorable volume mix. We expect non-OE order volumes to pick up as our customers’ inventory tapers off, which, together with significant reductions to our purchasing levels, should meaningfully reduce our inventory levels and improve our working capital position during the back half of 2022.”
Gohl continued: “We continued to contend with unpredictable OEM production schedules due to ongoing supply chain constraints. This choppiness negatively impacted our volumes and resulted in operational inefficiencies at facilities where we were unable to fully flex our operations. We expect our performance to improve in this sales channel based on a recent stabilization of OEM production schedules and a positive global OEM outlook for the remainder of 2022.”