HZN - Horizon Global soars 13% post Q2 results

• Horizon Global ( HZN ) rallies +13% despite seasonal demand falling significantly below the Co.’s expectations as many of the larger customers deployed their own elevated inventories to service the market.
• This led to lower than expected in-bound orders and reduced volumes in higher margin sales channels, which resulted in lower net sales and an unfavorable volume mix.
• Gross profit margin decreased to 11.4% from 21.3% in second quarter of 2021.
• Adjusted EBITDA too decreased to $3.4M, as compared to $18.5M for the second quarter of 2021, primarily due to unfavorable gross profit.
• Cash and availability was $46.5M, an increase of $7.3M compared to December 31, 2021 with working capital of $106.2M.
• Gross debt increased $98.9M to $399.7M, primarily reflecting $90M of additional borrowings under the Co.’s term loan facility.
• The Co. also issued $41M of Series B Preferred Stock in exchange for $40M of Convertible Notes as of June 30, 2022.
• "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." stated Terry Gohl, President and CEO.
• Previously: Horizon Global GAAP EPS of -$0.80, revenue of $181.2M (Aug. 9)

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