Horizon Global Corp. provided a revised business outlook and an update on its action plan, initiated in March, including strategies to improve performance in its Americas and Europe-Africa segments.
“In March, we announced a series of immediate and longer-term steps to improve performance, which are now part of the company’s overall action plan,” said Carl Bizon, interim president and CEO. “We have identified additional initiatives, primarily in Europe-Africa, to expand the action plan and ensure that the company is moving in a positive direction. A good deal of my leadership experience includes fixing operational issues within companies, and I am pleased to report that the issues I see today at Horizon Global are operational in nature, not structural.”
The company also recently announced the termination of the Brink Group acquisition, which Bizon termed “in the best interests of the company and allows complete management focus on our existing business.”
CFO David Rice noted, “Although we are making solid progress against our action plan initiatives in the Americas related to restructuring and consolidating the organization, the delayed financial realization of our operational improvements and persistent headwinds in Europe-Africa are expected to result in performance that is below our expectations in the quarter. In response to these challenges, we are tightly managing discretionary and non-core SG&A expenses across the organization. While we did not provide guidance for the second quarter, we expect our upcoming quarterly results to fall below current analyst consensus.”
He added, “In spite of showing steady improvement through much of the second quarter, our Kansas City distribution center did not begin approaching its daily shipment goals until well into the month of June. As such, we are expecting to exit the second quarter with more that $20 million in past-due orders.
“Additionally, we expect that the performance of our Europe-Africa segment relative to our expectations, as well as the further decline in our market capitalization as compared to the end of the first quarter, will trigger the need to perform an interim impairment test of goodwill and other intangible assets, which may result in an additional non-cash impairment.”