Horizon Global Corporation (HZN) saw its loss widen to $22.25 million, or $1.07 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $1.73 million, or $0.10 a share. On an adjusted basis, net loss for the quarter stood at $7.70 million, or $0.37 a share compared with a net profit of $1.05 million, or $0.06 a share in the last year period.
Revenue during the quarter surged 51.41 percent to $183.61 million from $121.27 million in the previous year period. Gross margin for the quarter contracted 778 basis points over the previous year period to 18.80 percent. Operating margin for the quarter stood at negative 10.49 percent as compared to a positive 1.56 percent for the previous year period.
Operating loss for the quarter was $19.26 million, compared with an operating income of $1.89 million in the previous year period.
"The close of 2016 marks the achievement of two significant milestones," said A. Mark Zeffiro, president and chief executive officer of Horizon Global. "We completed our first calendar year as an independent public company, and second, we achieved one of our key financial priorities by delivering 10.0 percent adjusted segment operating margin, excluding Westfalia."
For fiscal year 2017, Horizon Global projects revenue to be in the range of $844 million to $876.40 million. The company projects operating income to be in the range of $40 million to $46 million. The company projects adjusted operating income to be in the range of $53 million to $59 million. The company forecasts diluted earnings per share to be in the range of $0.46 to $0.56. The company forecasts diluted earnings per share to be in the range of $0.90 to $1.00 on adjusted basis.
Operating cash flow improves significantly
Horizon Global Corporation has generated cash of $35.41 million from operating activities during the year, up 31.59 percent or $8.50 million, when compared with the last year.
The company has spent $14.07 million cash to meet investing activities during the year as against cash outgo of $6.81 million in the last year. It has incurred net capital expenditure of $14.07 million on net basis during the year, up 106.61 percent or $7.26 million from year ago.
Cash flow from financing activities was $100.50 million for the year as against cash outgo of $0.91 million in the last year period.
Working capital increases
Horizon Global Corporation has recorded an increase in the working capital over the last year. It stood at $87.86 million as at Dec. 31, 2016, up 6.28 percent or $5.19 million from $82.67 million on Dec. 31, 2015. Current ratio was at 1.44 as on Dec. 31, 2016, down from 1.64 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 30 days for the quarter from 45 days for the last year period. Days sales outstanding went down to 19 days for the quarter compared with 24 days for the same period last year.
Days inventory outstanding has decreased to 45 days for the quarter compared with 62 days for the previous year period. At the same time, days payable outstanding went down to 34 days for the quarter from 41 for the same period last year.
Debt increases substantially
Horizon Global Corporation has witnessed an increase in total debt over the last one year. It stood at $349.94 million as on Dec. 31, 2016, up 85.41 percent or $161.20 million from $188.74 million on Dec. 31, 2015. Total debt was 57.05 percent of total assets as on Dec. 31, 2016, compared with 56.92 percent on Dec. 31, 2015. Debt to equity ratio was at 10.81 as on Dec. 31, 2016, down from 94.37 as on Dec. 31, 2015.
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