The following discussion and analysis of our financial condition contains forward-looking statements regarding industry outlook and our expectations regarding the performance of our business. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading "Forward-Looking Statements," at the beginning of this Quarterly Report on Form 10-Q. Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the Company's reports on file with theSecurities and Exchange Commission , as well as our Annual Report on Form 10-K for the year endedDecember 31, 2019 (See Item 1A. Risk Factors). Overview Headquartered inPlymouth, Michigan ,Horizon Global Corporation and its consolidated subsidiaries ("Horizon," "Horizon Global ," "we," or the "Company") are a leading designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products on a global basis, primarily servicing the aftermarket, retail and e-commerce and original equipment manufacturers ("OEMs") and original equipment servicers ("OESs") (collectively, "OEs") channels, supporting our customers through a regional service and delivery model. Critical factors affecting our ability to succeed include: •Our ability to realize the expected future economic benefits resulting from the changes made to our manufacturing operations, distribution footprint and management team during 2017 through 2019, including the operational improvement initiatives implemented in 2019; •Our ability to continue to manage our liquidity, including continuing to deleverage our balance sheet and service our debt obligations; •Our ability to quickly and cost-effectively introduce new products to our customers and end-user market with a resulting streamlined customer service model and improved operating margins; •Our ability to continue to successfully launch new products and customer programs to expand our geographic coverage or distribution channels and realize desired operating efficiencies; •Our ability to manage our cost structure more efficiently via global supply base management, internal sourcing and/or purchasing of materials, selective outsourcing and/or purchasing of support functions, working capital management and a global approach to leverage our administrative functions; and •Our ability to manage the business disruption and the operational and financial impacts, including temporary facility closures, liquidity and other economic and business uncertainties related to the COVID-19 pandemic as further detailed below. If we are unable to do any of the foregoing successfully, our financial condition and results of operations could be materially and adversely impacted. InDecember 2019 , a novel coronavirus ("COVID-19") outbreak occurred inChina and has since spread to other parts of the world and been declared a pandemic. In connection with the COVID-19 pandemic, we have been adhering to mandates and other guidance from local governments and health authorities, as well as theWorld Health Organization and theCenters for Disease Control . As a result of the pandemic, we experienced, and may experience again in the future, decreases in demand and customer orders for our products in all sales channels, as well as temporary disruptions and closures of some of our facilities due to decreased demand and government mandates. The COVID-19 pandemic also impacted various aspects of the supply chain as our suppliers experienced similar business disruptions due to operating restrictions from government mandates. We continue to monitor procurement of raw materials and components used in the manufacturing, distribution and sale of our products, but future disruptions in the supply chain due to the COVID-19 pandemic may cause difficulty in sourcing materials or unexpected shortages or delays in delivery of raw materials and components, and may result in increased costs in our supply chain. The extent to which we or our customers may successfully mitigate the impact of the COVID-19 pandemic, if at all, is unclear. The extent and duration of the impact of the COVID-19 pandemic and resulting effect on the Company's operations continues to evolve and remains uncertain. However, we expect that our results of operations in future periods may be adversely impacted by the COVID-19 pandemic and its negative effects on global economic conditions. See Part II, Item 1A, "Risk Factors," for additional risks relating to the COVID-19 pandemic. 30
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Horizon Global reports its business in two operating segments: Horizon Americas and Horizon Europe-Africa. See Note 17, Segment Information, included in Part I, Item 1, "Notes to Condensed Consolidated Financial Statements," within this Quarterly Report on Form 10-Q for further description of the Company's operating segments. We report shipping and handling expenses associated with Horizon Americas' distribution network as an element of selling, general and administrative expenses in our condensed consolidated statements of operations. As such, gross margins for Horizon Americas may not be comparable to those of HorizonEurope -Africa , which primarily relies on third-party distributors, for which all costs are included in cost of sales. Supplemental Analysis and Segment Information Non-GAAP Financial Measures The Company's management utilizes Adjusted EBITDA as the key measure of company and segment performance and for planning and forecasting purposes, as management believes this measure is most reflective of the operational profitability or loss of the Company and its operating segments and provides management and investors with information to evaluate the operating performance of its business and is representative of its performance used to measure certain of its financial covenants, further discussed in the Liquidity and Capital Resources section below. Adjusted EBITDA should not be considered a substitute for results prepared in accordance with US GAAP and should not be considered an alternative to net income attributable toHorizon Global , which is the most directly comparable financial measure to Adjusted EBITDA that is prepared in accordance with US GAAP. Adjusted EBITDA, as determined and measured byHorizon Global , should also not be compared to similarly titled measures reported by other companies. The Company also uses operating profit (loss) to measure stand-alone segment performance. Adjusted EBITDA is defined as net income attributable toHorizon Global before interest expense, income taxes, depreciation and amortization, and before certain items, as applicable, such as severance, restructuring, relocation and related business disruption costs, impairment of goodwill and other intangibles, non-cash stock compensation, certain product liability recall and litigation claims, acquisition and integration costs, gains (losses) on business divestitures and other assets, board transition support and non-cash unrealized foreign currency remeasurement costs. The following table summarizes Adjusted EBITDA for our operating segments for the three months endedSeptember 30, 2020 :
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