10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2021
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from                  to                  .

Commission file number 001-37427

HORIZON GLOBAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 47-3574483 (IRS Employer Identification No.)

47912 Halyard Drive, Suite 100

Plymouth, Michigan 48170

(Address of principal executive offices, including zip code)

(734) 656-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	HZN	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x    No o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

As of November 1, 2021, the number of outstanding shares of the Registrant’s common stock was 27,286,647 shares.

HORIZON GLOBAL CORPORATION

Index

Part I.	Financial Information
		Forward-Looking Statements	2
	Item 1.	Condensed Consolidated Financial Statements	3
		Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	3
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020	4
		Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2021 and 2020	5
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	6
		Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	49
	Item 4.	Controls and Procedures	50
Part II.	Other Information
	Item 1.	Legal Proceedings	51
	Item 1A.	Risk Factors	51
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
	Item 3.	Defaults Upon Senior Securities	51
	Item 4.	Mine Safety Disclosures	51
	Item 5.	Other Information	51
	Item 6.	Exhibits	52
	Signatures		53

1

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made and give our current expectations or forecasts of future events. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to, risks and uncertainties with respect to: the impact of the COVID-19 pandemic on the Company’s business, results of operations, financial condition and liquidity; the overall impact of global supply chain complexities on the Company and its business, including delays in sourcing key components and other supply constraints, longer transport times, especially for container ships and U.S. trucking, and increased transportation costs; liabilities and restrictions imposed by the Company’s debt instruments, including the Company’s ability to comply with the applicable financial covenants related thereto; market demand; competitive factors; material, logistics and energy costs, including the increased material and logistics costs resulting from the COVID-19 pandemic; technology factors; litigation; government and regulatory actions including the impact of any tariffs, quotas, or surcharges; the Company’s accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company’s business and industry; the success of the Company’s action plan, including the actual amount of savings and timing thereof; the success of the Company’s business improvement initiatives in Europe-Africa, including the amount of savings and timing thereof; the Company’s exposure to product liability claims from customers and end users, and the costs associated therewith; factors affecting the Company’s business that are outside of its control, including natural disasters, pandemics, including the current COVID-19 pandemic, accidents and governmental actions; and other risks that are discussed in Part I, Item 1A, “Risk Factors.” in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.

The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events, except as otherwise required by law.

We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.

2

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

HORIZON GLOBAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited—dollars in thousands)

	September 30, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	17,350	$	44,970
Restricted cash	5,500		5,720
Receivables, net	96,320		87,420
Inventories	164,270		115,320
Prepaid expenses and other current assets	13,510		11,510
Total current assets	296,950		264,940
Property and equipment, net	72,940		74,090
Operating lease right-of-use assets	38,290		47,310
Goodwill	—		3,360
Other intangibles, net	52,870		58,230
Deferred income taxes	1,220		1,280
Other assets	6,060		7,280
Total assets	$	468,330	$	456,490
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings and current maturities, long-term debt	$	5,940	$	14,120
Accounts payable	111,270		99,520
Short-term operating lease liabilities	11,120		12,180
Accrued liabilities	53,340		59,100
Total current liabilities	181,670		184,920
Gross long-term debt	290,340		251,960
Unamortized debt issuance costs and discount	(29,000)		(20,570)
Long-term debt	261,340		231,390
Deferred income taxes	3,650		3,130
Long-term operating lease liabilities	36,970		46,340
Other long-term liabilities	10,630		14,560
Total liabilities	494,260		480,340
Contingencies (See Note 10)
Shareholders' equity:
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None	—		—
Common stock, $0.01 par: Authorized 400,000,000 shares; 27,973,153 shares issued and 27,286,647 outstanding at September 30, 2021, and 27,089,673 shares issued and 26,403,167 outstanding at December 31, 2020	270		260
Common stock warrants issued, outstanding and exercisable for 9,231,146 and 5,815,039 shares of common stock at September 30, 2021 and December 31, 2020, respectively	25,010		9,510
Paid-in capital	170,050		166,610
Treasury stock, at cost: 686,506 shares at September 30, 2021 and December 31, 2020	(10,000)		(10,000)
Accumulated deficit	(194,520)		(178,530)
Accumulated other comprehensive loss	(10,610)		(6,540)
Total Horizon Global shareholders' deficit	(19,800)		(18,690)
Noncontrolling interest	(6,130)		(5,160)
Total shareholders' deficit	(25,930)		(23,850)
Total liabilities and shareholders' equity	$	468,330	$	456,490

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

HORIZON GLOBAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited—dollars in thousands, except share and per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net sales	$	196,540	$	201,630	$	617,850	$	485,370
Cost of sales	(157,780)		(158,260)		(491,240)		(397,700)
Gross profit	38,760		43,370		126,610		87,670
Selling, general and administrative expenses	(32,430)		(34,810)		(102,170)		(93,760)
Operating profit (loss)	6,330		8,560		24,440		(6,090)
Other (expense) income, net	(1,720)		690		(5,940)		(1,430)
Loss on debt extinguishment	—		—		(11,650)		—
Interest expense	(6,970)		(7,560)		(21,000)		(23,970)
(Loss) income from continuing operations before income tax	(2,360)		1,690		(14,150)		(31,490)
Income tax expense	(410)		(100)		(2,810)		(170)
Net (loss) income from continuing operations	(2,770)		1,590		(16,960)		(31,660)
Loss from discontinued operations, net of income tax	—		—		—		(500)
Net (loss) income	(2,770)		1,590		(16,960)		(32,160)
Less: Net loss attributable to noncontrolling interest	(300)		(340)		(970)		(1,010)
Net (loss) income attributable to Horizon Global	$	(2,470)	$	1,930	$	(15,990)	$	(31,150)
Net (loss) income per share attributable to Horizon Global:
Basic:
Continuing operations	$	(0.09)	$	0.07	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.07	$	(0.59)	$	(1.21)
Diluted:
Continuing operations	$	(0.09)	$	0.06	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.06	$	(0.59)	$	(1.21)
Weighted average common shares outstanding:
Basic	27,286,600		25,939,741		27,019,554		25,651,789
Diluted	27,286,600		33,329,106		27,019,554		25,651,789

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

HORIZON GLOBAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited—dollars in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net (loss) income	$	(2,770)	$	1,590	$	(16,960)	$	(32,160)
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other	(1,650)		1,900		(4,070)		(400)
Total other comprehensive (loss) income, net of tax	(1,650)		1,900		(4,070)		(400)
Total comprehensive (loss) income	(4,420)		3,490		(21,030)		(32,560)
Less: Comprehensive loss attributable to noncontrolling interest	(300)		(340)		(970)		(1,010)
Comprehensive (loss) income attributable to Horizon Global	$	(4,120)	$	3,830	$	(20,060)	$	(31,550)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

HORIZON GLOBAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited—dollars in thousands)

	Nine Months Ended September 30,
	2021		2020
Cash Flows from Operating Activities:
Net loss	$	(16,960)	$	(32,160)
Less: Net loss from discontinued operations	—		(500)
Net loss from continuing operations	(16,960)		(31,660)
Adjustments to reconcile net loss from continuing operations to net cash (used for) provided by operating activities:
Depreciation	11,710		11,110
Amortization of intangible assets	4,220		5,040
Loss on debt extinguishment	11,650		—
Amortization of original issuance discount and debt issuance costs	8,010		11,450
Deferred income taxes	730		(820)
Non-cash compensation expense	2,590		2,190
Paid-in-kind interest	650		6,280
Increase in receivables	(12,360)		(35,170)
(Increase) decrease in inventories	(52,700)		30,100
Increase in prepaid expenses and other assets	(1,910)		(4,080)
Increase in accounts payable and accrued liabilities	11,820		29,800
Other, net	1,910		(50)
Net cash (used for) provided by operating activities from continuing operations	(30,640)		24,190
Cash Flows from Investing Activities:
Capital expenditures	(14,730)		(8,090)
Other, net	20		70
Net cash used for investing activities from continuing operations	(14,710)		(8,020)
Cash Flows from Financing Activities:
Proceeds from borrowings on credit facilities	2,870		6,440
Repayments of borrowings on credit facilities	(1,960)		(3,330)
Proceeds from Senior Term Loan, net of issuance costs	75,300		—
Repayments of borrowings on Replacement Term Loan, including transaction fees	(94,940)		—
Proceeds from Revolving Credit Facility, net of issuance costs	28,680		54,680
Repayments of borrowings on Revolving Credit Facility	(8,000)		(28,300)
Proceeds from ABL revolving debt, net of issuance costs	—		8,000
Repayments of borrowings on ABL revolving debt	—		(27,920)
Proceeds from Paycheck Protection Program Loan	—		8,670
Proceeds from issuance of common stock warrants	16,300		—
Proceeds from exercise of common stock warrants	420		—
Other, net	(650)		(320)
Net cash provided by financing activities from continuing operations	18,020		17,920
Discontinued Operations:
Net cash used for discontinued operations	—		(500)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(510)		290
Cash, Cash Equivalents and Restricted Cash:
(Decrease) increase for the period	(27,840)		33,880
At beginning of period	50,690		11,770
At end of period	$	22,850	$	45,650
Supplemental disclosure of cash flow information:
Cash paid for interest	$	16,130	$	4,990
Cash paid for taxes, net of refunds	$	2,010	$	990

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

HORIZON GLOBAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(unaudited—dollars in thousands)

	Common Stock		Common Stock Warrants		Paid-in Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive (Loss)		Total Horizon Global Shareholders' Equity (Deficit)		Noncontrolling Interest		Total Shareholders' Equity (Deficit)
Balances at January 1, 2021	$	260	$	9,510	$	166,610	$	(10,000)	$	(178,530)	$	(6,540)	$	(18,690)	$	(5,160)	$	(23,850)
Net loss	—		—		—		—		(14,810)		—		(14,810)		(340)		(15,150)
Other comprehensive loss, net of tax	—		—		—		—		—		(2,290)		(2,290)		—		(2,290)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	—		—		(650)		—		—		—		(650)		—		(650)
Non-cash compensation expense	—		—		960		—		—		—		960		—		960
Issuance of common stock warrants	—		16,300		—		—		—		—		16,300		—		16,300
Exercise of common stock warrants	10		(800)		1,210		—		—		—		420		—		420
Balances at March 31, 2021	270		25,010		168,130		(10,000)		(193,340)		(8,830)		(18,760)		(5,500)		(24,260)
Net income (loss)	—		—		—		—		1,290		—		1,290		(330)		960
Other comprehensive loss, net of tax	—		—		—		—		—		(130)		(130)		—		(130)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	—		—		10		—		—		—		10		—		10
Non-cash compensation expense	—		—		930		—		—		—		930		—		930
Balances at June 30, 2021	270		25,010		169,070		(10,000)		(192,050)		(8,960)		(16,660)		(5,830)		(22,490)
Net loss	—		—		—		—		(2,470)		—		(2,470)		(300)		(2,770)
Other comprehensive loss, net of tax	—		—		—		—		—		(1,650)		(1,650)		—		(1,650)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	—		—		(10)		—		—		—		(10)		—		(10)
Non-cash compensation expense	—		—		990		—		—		—		990		—		990
Balances at September 30, 2021	$	270	$	25,010	$	170,050	$	(10,000)	$	(194,520)	$	(10,610)	$	(19,800)	$	(6,130)	$	(25,930)

	Common Stock		Common Stock Warrants		Paid-in Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Horizon Global Shareholders' Equity (Deficit)		Noncontrolling Interest		Total Shareholders' Equity (Deficit)
Balances at January 1, 2020	$	250	$	10,610	$	163,240	$	(10,000)	$	(141,970)	$	(9,790)	$	12,340	$	(3,740)	$	8,600
Net loss	—		—		—		—		(16,740)		—		(16,740)		(290)		(17,030)
Other comprehensive loss, net of tax	—		—		—		—		—		(4,340)		(4,340)		—		(4,340)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	—		—		(60)		—		—		—		(60)		—		(60)
Non-cash compensation expense	—		—		420		—		—		—		420		—		420
Balances at March 31, 2020	250		10,610		163,600		(10,000)		(158,710)		(14,130)		(8,380)		(4,030)		(12,410)
Net loss	—		—		—		—		(16,340)		—		(16,340)		(380)		(16,720)
Other comprehensive income, net of tax	—		—		—		—		—		2,040		2,040		—		2,040
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	—		—		50		—		—		—		50		—		50
Non-cash compensation expense	—		—		900		—		—		—		900		—		900
Balances at June 30, 2020	250		10,610		164,550		(10,000)		(175,050)		(12,090)		(21,730)		(4,410)		(26,140)
Net income (loss)	—		—		—		—		1,930		—		1,930		(340)		1,590
Other comprehensive income, net of tax	—		—		—		—		—		1,900		1,900		—		1,900
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	—		—		(310)		—						(310)		—		(310)
Non-cash compensation expense	—		—		870		—		—		—		870		—		870
Exercise of common stock warrants	10		(810)		800		—		—		—		—		—		—
Balances at September 30, 2020	$	260	$	9,800	$	165,910	$	(10,000)	$	(173,120)	$	(10,190)	$	(17,340)	$	(4,750)	$	(22,090)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Operations and Basis of Presentation

Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global,” “we,” “our”, 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, primarily in the North American, European and African markets. These products are designed to support aftermarket, automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment servicers (“automotive OESs”) (collectively, “OEs”), retail, e-commerce and industrial customers within the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets. The Company groups its business into operating segments generally by the region in which sales and manufacturing efforts are focused. The Company’s operating segments are Horizon Americas and Horizon Europe-Africa. See Note 14, Segment Information, for further information on the Company’s operating segments.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. It is management’s opinion that these condensed consolidated financial statements contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of financial position and results of operations. Results of operations for interim periods are not necessarily indicative of results for the full year.

U.S. GAAP requires the Company to make certain estimates, judgments, and assumptions. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, sales incentives, sales returns, impairment assessment of indefinite-lived intangible assets, recoverability of long-lived assets, income taxes (including deferred taxes and uncertain tax positions), share-based compensation, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, and depreciation and amortization, are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

8

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. New Accounting Pronouncements

New accounting pronouncements not yet adopted

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2021-04”). ASU 2021-04 provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of other accounting standards. Under this guidance, an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. ASU 2021-04 provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2021, with early adoption permitted. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and Other Options,” (“ASC 470-20”) for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for as paid-in capital. For smaller reporting companies, ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2023, with early adoption permitted for fiscal years beginning after December 15, 2020. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for (or recognize the effects of) reference rate reform on financial reporting. The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform initiatives being undertaken in an effort to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The optional amendments of this guidance are effective for all entities upon adoption. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaces the current incurred loss model guidance with a new method that reflects expected credit losses. Under this guidance, an entity would recognize an allowance for credit losses equal to its estimate of expected credit losses on financial assets measured at amortized cost. In November 2019, the FASB extended the effective date of ASU 2016-13 for smaller reporting companies. As a result, ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.

Accounting pronouncements recently adopted

There were no new accounting pronouncements adopted during the nine months ended September 30, 2021.

3. Revenues

The Company disaggregates net sales from contracts with customers by major sales channel. The Company determined that disaggregating its net sales into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The automotive OEM channel represents sales to automotive vehicle manufacturers. The automotive OES channel primarily represents sales to automotive vehicle dealerships. The aftermarket channel represents sales to automotive installers and warehouse distributors. The retail channel represents sales to direct-to-consumer retailers. The e-commerce channel represents sales to retailers whose customers utilize the Internet to purchase the Company’s products. The industrial channel represents sales to non-automotive manufacturers and dealers of agricultural equipment, trailers, and other custom assemblies. The other channel represents sales that do not fit into a category described above and these sales are considered ancillary to the Company’s core operating activities.

9

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s net sales by segment and disaggregated by major sales channel are as follows:

	Three Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	35,390	$	22,400	$	57,790
Automotive OEM	24,690		34,590		59,280
Automotive OES	3,570		20,790		24,360
Retail	26,460		—		26,460
E-commerce	16,970		1,950		18,920
Industrial	8,770		480		9,250
Other	—		480		480
Total	$	115,850	$	80,690	$	196,540

	Three Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	35,390	$	24,360	$	59,750
Automotive OEM	24,010		42,400		66,410
Automotive OES	2,980		13,820		16,800
Retail	34,290		—		34,290
E-commerce	15,240		630		15,870
Industrial	7,230		550		7,780
Other	—		730		730
Total	$	119,140	$	82,490	$	201,630

	Nine Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	107,640	$	70,950	$	178,590
Automotive OEM	74,860		127,340		202,200
Automotive OES	11,670		56,820		68,490
Retail	81,650		—		81,650
E-commerce	51,220		5,340		56,560
Industrial	27,020		1,660		28,680
Other	—		1,680		1,680
Total	$	354,060	$	263,790	$	617,850

10

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Nine Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	84,440	$	56,750	$	141,190
Automotive OEM	53,880		104,420		158,300
Automotive OES	5,330		34,000		39,330
Retail	80,690		—		80,690
E-commerce	41,120		1,290		42,410
Industrial	20,120		1,210		21,330
Other	50		2,070		2,120
Total	$	285,630	$	199,740	$	485,370

4. Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill are as follows:

	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Balance at January 1, 2021	$	3,360	$	—	$	3,360
Divestiture of business	(3,340)		—		(3,340)
Foreign currency translation	(20)		—		(20)
Balance at September 30, 2021	$	—	$	—	$	—

Brazil Sale

On June 8, 2021, the Company divested its Brazil business via a share sale (the “Brazil Sale”). Under the terms of the Brazil Sale, the Company disposed all assets and liabilities of its Brazil business, including $3.3 million of goodwill within the Horizon Americas operating segment, for nominal consideration. As a result of the Brazil Sale, the Company recorded a $2.2 million loss during the second quarter of 2021 in other expense, net in the accompanying condensed consolidated statements of operations.

The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows:

	September 30, 2021
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships (2 – 20 years)	$	162,970	$	(136,640)	$	26,330
Technology and other (3 – 15 years)	22,760		(17,280)		5,480
Sub-total	185,730		(153,920)		31,810
Trademark/Trade names, indefinite-lived	21,060		—		21,060
Total	$	206,790	$	(153,920)	$	52,870

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HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	December 31, 2020
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships (2 – 20 years)	$	166,420	$	(135,140)	$	31,280
Technology and other (3 – 15 years)	22,250		(16,710)		5,540
Trademark/Trade names (1 – 8 years)	150		(150)		—
Sub-total	188,820		(152,000)		36,820
Trademark/Trade names, indefinite-lived	21,410		—		21,410
Total	$	210,230	$	(152,000)	$	58,230

Amortization expense related to other intangible assets is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Technology and other, included in cost of sales	$	210	$	280	$	990	$	950
Customer relationships, included in selling, general and administrative expenses	1,040		1,330		3,230		4,090
Total	$	1,250	$	1,610	$	4,220	$	5,040

5. Inventories

Inventories consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Finished goods	$	89,640	$	58,600
Work in process	15,870		13,070
Raw materials	58,760		43,650
Total	$	164,270	$	115,320

12

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Property and Equipment, Net

Property and equipment, net consists of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Land and land improvements	$	490	$	520
Buildings and improvements	22,760		23,040
Machinery and equipment	142,390		134,750
Gross property and equipment	165,640		158,310
Accumulated depreciation	(92,700)		(84,220)
Total	$	72,940	$	74,090

Depreciation expense is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Depreciation expense, included in cost of sales	$	3,720	$	3,920	$	10,850	$	10,330
Depreciation expense, included in selling, general and administrative expenses	240		90		860		780
Total	$	3,960	$	4,010	$	11,710	$	11,110

13

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Accrued and Other Long-term Liabilities

Accrued liabilities consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Customer incentives	$	14,730	$	15,870
Accrued compensation	11,020		12,130
Short-term tax liabilities	4,920		5,570
Customer claims	3,830		6,520
Accrued professional services	1,760		1,510
Litigation settlements	1,150		1,600
Restructuring	120		650
Deferred purchase price	—		1,370
Other	15,810		13,880
Total	$	53,340	$	59,100

Other long-term liabilities consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Litigation settlements	$	2,320	$	2,930
Long-term tax liabilities	330		130
Deferred purchase price	—		1,650
Restructuring	—		1,070
Other	7,980		8,780
Total	$	10,630	$	14,560

14

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Long-term Debt

The Company’s long-term debt consists of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Revolving Credit Facility	$	44,910	$	24,230
Senior Term Loan	100,000		—
Replacement Term Loan	—		90,210
Convertible Notes	125,000		125,000
Paycheck Protection Program Loan	8,670		8,670
Bank facilities, capital leases and other long-term debt	17,700		17,970
Gross debt	296,280		266,080
Less:
Short-term borrowings and current maturities, long-term debt	5,940		14,120
Gross long-term debt	290,340		251,960
Unamortized debt issuance costs and discount:
Unamortized debt issuance costs and original issuance discount on Senior Term Loan	(22,870)		—
Unamortized debt issuance costs and original issuance discount on Replacement Term Loan	—		(9,100)
Unamortized debt issuance costs and discount on Convertible Notes	(6,130)		(11,470)
Total	(29,000)		(20,570)
Long-term debt	$	261,340	$	231,390

ABL Facility

In December 2015, the Company entered into an Amended and Restated Loan Agreement with certain subsidiaries of the Company party thereto as guarantors, the lenders party thereto and Bank of America, N.A., as agent for the lenders, under which the lenders party thereto agreed to provide the Company and certain of its subsidiaries with a committed asset-based revolving credit facility (the “ABL Facility”) providing for revolving loans. The Amended and Restated Loan Agreement was subsequently amended on several occasions and as a result, the effective facility size was $80.0 million.

In March 2020, the Company paid in full all outstanding debt incurred under the ABL Facility, which the Company accounted for as a debt extinguishment in accordance with guidance in ASC 405-20, “Extinguishment of Liabilities”. As a result of the debt extinguishment, during the nine months ended September 30, 2020, the Company recognized $0.8 million of unamortized debt issuance costs in interest expense and $0.6 million of additional costs in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50, “Modifications and Extinguishments” (“ASC 470-50”).

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and nine months ended September 30, 2020, the Company recognized no amortization of debt issuance costs and $0.4 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

Revolving Credit Facility

In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers (the “ABL Borrowers”).

15

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of $75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million.

In May 2020, the Company entered into amendments, limited waivers and consents in connection with the Loan Agreement, with an effective date of April 1, 2020, that, among other things, consented to the Company’s applying for, obtaining and incurring the PPP Loan, as defined and described below.

In February 2021, the Company entered into a limited consent of the Loan Agreement, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement, as defined and described below.

In April 2021, the Company entered into an amendment to the Loan Agreement, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility to $85.0 million. The amendment also increased sub-limits relating to the Company’s ability to borrow against in-transit inventory as well as inventory located in the Company’s Mexico facilities.

On September 17, 2021, the Company entered into an amendment to the Loan Agreement, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility to $95.0 million. The amendment also increased the Company’s ability to borrow against receivables and sub-limits relating to in-transit inventory and inventory located in the Company’s Mexico facilities. The increased borrowing capacity against receivables and inventory is effective through December 31, 2021.

Interest on the loans under the Loan Agreement is payable in cash at the interest rate of LIBOR plus 4.00% per annum, subject to a 1.00% LIBOR floor, provided that if for any reason the loans are converted to base rate loans, interest will be paid in cash at the customary base rate plus a margin of 3.00% per annum. All interest, fees, and other monetary obligations due may, at Encina’s discretion, but upon prior notice to the ABL Borrowers, be charged to the loan account and thereafter be deemed to be part of the Revolving Credit Facility subject to the same interest rate. There are no amortization payments required under the Loan Agreement. All outstanding borrowings under the Loan Agreement mature on March 13, 2023.

All of the indebtedness under the Loan Agreement is and will be guaranteed by the Company and certain of the Company’s existing and future North American subsidiaries and is and will be secured by substantially all of the assets of the Company, such other guarantors, and the ABL Borrowers.

The Loan Agreement also contains a financial covenant that stipulates the ABL Borrowers and guarantors under the Loan Agreement will not make capital expenditures exceeding $30.0 million during any fiscal year.

Debt issuance costs of $2.3 million were incurred in connection with the Loan Agreement. These debt issuance costs will be amortized into interest expense over the contractual term of the Loan Agreement.

During the three and nine months ended September 30, 2021, the Company recognized $0.1 million and $0.4 million of amortization of debt issuance costs, respectively, and during the three and nine months ended September 30, 2020, the Company recognized $0.2 million and $0.9 million of amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

As of September 30, 2021 and December 31, 2020, there was $1.0 million and $1.1 million, respectively, of unamortized debt issuance costs included in other assets in the accompanying condensed consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, there was $44.9 million and $24.2 million outstanding, respectively, under the Revolving Credit Facility, with a weighted average interest rate of 5.3% and 5.0%, respectively. As of September 30, 2021 and December 31, 2020, the Company had $37.5 million and $38.4 million of availability, respectively, under the Revolving Credit Facility.

As of September 30, 2021 and December 31, 2020, the Company had $2.1 million and $3.1 million, respectively, of letters of credit issued and outstanding, under the Revolving Credit Facility with no cash collateral requirement. As of September 30, 2021 and December 31, 2020, respectively, the Company also had $4.2 million and $4.9 million of other letters of credit issued and outstanding, under the Revolving Credit Facility with a cash collateral requirement. The cash collateral requirement is 105% of the outstanding letters of credit. As of September 30, 2021 and December 31, 2020, the Company had cash collateral, of $4.9 million and $5.1 million, respectively. Cash collateral is presented in restricted cash in the accompanying condensed consolidated balance sheets.

16

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

First Lien Term Loan Agreement

In June 2015, the Company entered into a credit agreement among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A. (the “Term Loan Agreement”) under which the Company borrowed an aggregate of $200.0 million (the “Original Term B Loan”). The Term Loan Agreement was subsequently amended and restated on several occasions and is collectively referred to as the “First Lien Term Loan Agreement”. The Original Term B Loan was also subsequently amended on several occasions and is collectively referred to as the “First Lien Term Loan”.

In May 2020, the Company entered into an amendment, limited waiver and consent to credit agreement with an effective date of April 1, 2020, to amend the First Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan, as defined and described below.

As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest was replaced by the Replacement Term Loan, as defined and described below.

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and nine months ended September 30, 2020, the Company recognized no and $0.2 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

During the three and nine months ended September 30, 2021, the Company recognized no paid-in-kind (“PIK”) interest and during the three and nine months ended September 30, 2020, the Company recognized no and $0.4 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations.

Second Lien Term Loan Agreement

In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto. The Second Lien Term Loan Agreement provided for a term loan facility in the aggregate principal amount of $51.0 million.

In May 2020, the Company entered into an amendment, limited waiver and consent to credit agreement with an effective date of April 1, 2020, to amend the Second Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan, as defined and described below.

As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest was replaced by the Replacement Term Loan, as defined and described below.

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and nine months ended September 30, 2020, the Company recognized no and $2.7 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

During the three and nine months ended September 30, 2021, the Company recognized no PIK interest and during the three and nine months ended September 30, 2020, the Company recognized $0.1 million and $3.4 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations.

Replacement Term Loan

In July 2020, the Company entered into the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon.

17

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The interest on the Replacement Term Loan was LIBOR plus 10.75% per annum, subject to a 1.00% LIBOR floor, of which 4.00% was payable in cash and the remainder of which was PIK interest (provided that the Company may elect on not more than one occasion to pay all interest as PIK interest). The Eleventh Amendment provided for a 1.00% PIK closing fee, which was added to the principal amount of the Replacement Term Loan on the closing date and provided for a prepayment penalty on the entire principal amount of the Replacement Term Loan in an amount equal to 3.0% of the aggregate principal amount prepaid prior to December 31, 2021.

In February 2021, the Company entered into the Senior Term Loan Credit Agreement, as defined and described below. The proceeds received from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan. As a result of the repayment, the Term Loan Agreement was terminated and is no longer in effect. During the nine months ended September 30, 2021, the Company recognized $11.7 million as loss on debt extinguishment in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50. Included in the loss was $8.9 million of unamortized debt issuance and other costs and a $2.8 million prepayment penalty.

During the three and nine months ended September 30, 2020, the Company recognized $0.2 million of additional costs in selling, general and administrative expense in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50.

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and $0.4 million amortization of debt issuance costs, respectively, and during the three and nine months ended September 30, 2020, the Company recognized $1.2 million amortization of debt issuance costs in the accompanying condensed consolidated statements of operations.

As of December 31, 2020, the Company had total unamortized debt issuance and discount costs of $9.1 million, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

During the three and nine months ended September 30, 2021, the Company recognized no PIK interest and $0.7 million of PIK interest, respectively, and during the three and nine months ended September 30, 2020, the Company recognized $2.5 million PIK interest in the accompanying condensed consolidated statements of operations.

As of December 31, 2020, the Company had $90.2 million of aggregate principal outstanding.

Senior Term Loan Credit Agreement

On February 2, 2021, the Company entered into a credit agreement (the “Senior Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the lenders party thereto (collectively, the “Lenders”). The Senior Term Loan Credit Agreement provides for an initial term loan facility in the aggregate principal amount of $100.0 million, all of which has been borrowed by the Company and was used to repay the Replacement Term Loan, as described above, and a delayed draw term loan facility in the aggregate principal amount of up to $125.0 million, which may be drawn by the Company in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the delayed draw term loan facility.

Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor. The Senior Term Loan Credit Agreement includes customary affirmative and negative covenants, including a maximum total net leverage ratio requirement tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make capital expenditures exceeding $27.5 million during any fiscal year. To the extent that the amount of capital expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for capital expenditures in the immediately succeeding fiscal year.

Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings under the Senior Term Loan Credit Agreement mature on February 2, 2027.

All of the indebtedness under the Senior Term Loan Credit Agreement is and will be guaranteed by the Company’s existing and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.

18

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Pursuant to the Senior Term Loan Credit Agreement, the Company issued warrants (the “Senior Term Loan Warrants”) to Atlantic Park to purchase in the aggregate up to 3,905,486 shares of the Company’s common stock, with an exercise price of $9.00 per share, subject to adjustment as provided in the Senior Term Loan Warrants. The Senior Term Loan Warrants are exercisable at any time prior to February 2, 2026.

In accordance with guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging”, the Senior Term Loan Credit Agreement and the Senior Term Loan Warrants are each freestanding instruments and proceeds were allocated to each instrument on a relative fair value basis of $82.4 million and $17.6 million, respectively.

The Senior Term Loan Warrants are not within the scope of ASC 480 and do not meet the criteria for liability classification. However, the Senior Term Loan Warrants are determined to be indexed to the Company’s common stock and meet the requirements for equity classification pursuant to ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity”. The $17.6 million allocated to the Senior Term Loan Warrants was determined using an option pricing method and is recorded in common stock warrants in the accompanying condensed consolidated balance sheets.

Debt issuance costs of $5.4 million and original issue discount of $3.0 million were incurred in connection with entry into the Senior Term Loan Credit Agreement. The total costs of $8.4 million were allocated to each instrument on a relative fair value basis. The $7.1 million allocated to the Senior Term Loan Credit Agreement will be amortized into interest expense over the contractual term of the loan using the effective interest method and the $1.3 million allocated to the Senior Term Loan Warrants was recorded as a reduction of equity.

The Company determined the fair value of the Senior Term Loan Credit Agreement using a discount rate build up approach. The debt discount of $17.6 million created by the relative fair value allocation of the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the loan. The debt discount is recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

During the three and nine months ended September 30, 2021, the Company recognized $0.7 million and $1.8 million, respectively, of amortization of debt issuance and discount costs in the accompanying condensed consolidated statements of operations.

As of September 30, 2021, the Company had total unamortized debt issuance and discount costs of $22.9 million, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

As of September 30, 2021, the Company had $100.0 million aggregate principal outstanding.

Convertible Notes

In February 2017, the Company completed a public offering of 2.75% Convertible Senior Notes (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year, beginning on July 1, 2017. The Convertible Notes are convertible into 5,005,000 shares of the Company’s common stock, based on an initial conversion price of $24.98 per share. The Convertible Notes will mature on July 1, 2022 unless earlier converted. In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”) in privately negotiated transactions with certain of the underwriters or their affiliates (in this capacity, the “option counterparties”). The Convertible Note Hedges provide the Company with the option to acquire, on a net settlement basis, 5,005,000 shares of its common stock, which is equal to the number of shares of common stock that notionally underlie the Convertible Notes, at a strike price of $24.98, which corresponds to the conversion price of the Convertible Notes. The Convertible Note Hedges have an expiration date that is the same as the maturity date of the Convertible Notes, subject to earlier exercise. The Convertible Note Hedges have customary anti-dilution provisions similar to the Convertible Notes.

The Convertible Notes were not convertible during the third quarter of 2021, as no conditions allowing holders of the Convertible Notes to convert have been met. Should conditions allowing holders of the Convertible Notes to convert be met in a future quarter, the Convertible Notes will be convertible at their holders’ option during the immediately following quarter. As of September 30, 2021, the if-converted value of the Convertible Notes did not exceed the principal value of those Convertible Notes.

19

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. Because the Company may elect to settle conversion in cash, the Company separated the Convertible Notes into their liability and equity components by allocating the issuance proceeds to each of those components in accordance with ASC 470-20. The Company first determined the fair value of the liability component by estimating the value of a similar liability that does not have an associated equity component. The Company then deducted that amount from the issuance proceeds to arrive at a residual amount, which represents the equity component. The Company accounted for the equity component as a debt discount (with an offset to paid-in capital in excess of par value). The debt discount created by the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the Convertible Notes ending on July 1, 2022.

During the three and nine months ended September 30, 2021, the Company recognized total interest expense of $2.6 million and $7.9 million and during the three and nine months ended September 30, 2020, the Company recognized total interest expense of $2.5 million and $7.6 million, respectively, in the accompanying condensed consolidated statements of operations. The interest expense recognized consists of contractual interest coupon, amortization of debt discount and amortization of debt issuance costs on the Convertible Notes, and is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Contractual interest coupon on convertible debt	$	860	$	860	$	2,580	$	2,600
Amortization of debt issuance costs	130		130		400		400
Amortization of "equity discount" related to debt	1,640		1,510		4,940		4,550
Total	$	2,630	$	2,500	$	7,920	$	7,550

As a result of the Company’s Senior Term Loan Agreement entered into in February 2021, which includes the delayed draw term loan facility described above, the Company has the ability and intent to refinance the Convertible Notes, which mature on July 1, 2022.

As of September 30, 2021 and December 31, 2020, the Company had total unamortized debt issuance and discount costs of $6.1 million and $11.5 million, respectively, which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, the Company had $125.0 million of aggregate principal outstanding.

Paycheck Protection Program Loan

In April 2020, Horizon Global Company LLC (the “U.S. Borrower”), a direct U.S.-based subsidiary of the Company, received a loan from PNC Bank, National Association for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES Act.

The Company submitted its PPP Loan application in good faith in accordance with the CARES Act and the guidance issued by the Small Business Administration (the “SBA”), including the SBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and sized based criteria of the program.

20

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 30, 2021, the Company’s application of loan forgiveness of $7.1 million of the $8.7 million of funds originally received is subject to the SBA’s final determination of forgiveness, which we expect to receive in the fourth quarter of 2021, based on the review timelines once a borrower has submitted its application in accordance with the issued regulations. The potential loan forgiveness is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of the loan has an interest rate of 1.0% per annum. In July 2021, the note was amended to make the unforgiven portion payable over five years on a monthly basis. The Company has deferred interest payments until the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and Treasury and the terms of the Company’s PPP Loan. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of $7.1 million of our PPP Loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.

Covenant and Liquidity Matters

The Company is in compliance with all of its financial covenants as of September 30, 2021.

9. Leases

The Company leases certain facilities, automobiles and equipment under non-cancellable operating leases. Our leases have remaining lease terms of one to seven years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Most leases include one or more options to renew. The exercise of lease renewal options is typically at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in the lease term. The Company combines lease and non-lease components, which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Refer to Note 3, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020, for more information.

Supplemental information for the Company’s leases is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Operating lease cost	$	3,040	$	4,260	$	10,670	$	11,460

	Nine Months Ended September 30,
	2021		2020
Operating cash flows from operating leases	$	9,980	$	12,060
ROU assets obtained in exchange for operating lease obligations	$	910	$	4,080

	September 30, 2021		December 31, 2020
Weighted average remaining lease term (years)	5.2		6.0
Weighted average discount rate	8.4	%	8.4	%

21

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Contingencies

In April 2020, the Company agreed to a settlement (the “Settlement”) related to certain intellectual property infringement claims made against one of the Company’s subsidiaries in its Horizon Europe-Africa operating segment. The Company settled all historical and future associated claims for $4.4 million to be paid evenly in semi-annual installments on June 30 and December 31 of each year through December 31, 2024. As a result of the Settlement, the Company recorded a $1.5 million charge during the first quarter of 2020 in cost of sales of the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2021, the Company recorded $0.2 million and $0.5 million of royalties, respectively, and during the three and nine months ended September 30, 2020, the Company recorded $0.2 million and $0.4 million of royalties, respectively, all of which were recorded in cost of sales in the accompanying condensed consolidated statements of operations.

As of September 30, 2021 and December 31, 2020, the Company had recorded $0.9 million and $0.9 million, respectively, in prepaid expenses and other current assets and $1.2 million and $1.8 million, respectively, in other assets, in the accompanying condensed consolidated balance sheets related to the royalties to be recognized by the Company over the life of future programs connected to the Settlement. In addition, as of September 30, 2021 and December 31, 2020, the Company had $0.9 million and $1.0 million, respectively, in accrued liabilities and $2.3 million and $2.9 million, respectively, in other long-term liabilities, in the accompanying condensed consolidated balance sheets related to the remaining semi-annual installment payments.

11. Earnings (Loss) per Share

Basic earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding. Diluted earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding, adjusted to give effect to the assumed exercise of outstanding stock options and warrants, vesting of restricted shares outstanding, and conversion of the Convertible Notes, where dilutive to earnings per share.

A reconciliation of the numerator and the denominator of basic income (loss) per share attributable to Horizon Global and diluted income (loss) per share attributable to Horizon Global is as follows:

22

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands, except for per share amounts)
Numerator:
Net (loss) income from continuing operations	$	(2,770)	$	1,590	$	(16,960)	$	(31,660)
Add: Loss from discontinued operations, net of income tax	—		—		—		(500)
Less: Net loss attributable to noncontrolling interest	(300)		(340)		(970)		(1,010)
Net (loss) income attributable to Horizon Global	$	(2,470)	$	1,930	$	(15,990)	$	(31,150)
Denominator:
Weighted average shares outstanding, basic	27,286,600		25,939,741		27,019,554		25,651,789
Dilutive effect of common stock equivalents	—		7,389,365		—		—
Weighted average shares outstanding, diluted	27,286,600		33,329,106		27,019,554		25,651,789
Basic (loss) income per share attributable to Horizon Global
Continuing operations	$	(0.09)	$	0.07	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.07	$	(0.59)	$	(1.21)
Diluted (loss) income per share attributable to Horizon Global
Continuing operations	$	(0.09)	$	0.06	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.06	$	(0.59)	$	(1.21)

As a result of the net loss from continuing operations for the three months ended September 30, 2021 and nine months ended September 30, 2021 and 2020, the effect of certain dilutive securities was excluded from the computation of weighted average diluted shares outstanding, as inclusion would have resulted in anti-dilution. A summary of these anti-dilutive common stock equivalents are as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Number of options	18,961	18,961	18,961	18,961
Exercise price of options	$9.20 - $11.02	$9.20 - $11.02	$9.20 - $11.02	$9.20 - $11.02
Restricted stock units	1,761,463	—	1,863,498	1,820,186
Convertible Notes	5,005,000	5,005,000	5,005,000	5,005,000
Convertible Notes warrants	5,005,000	5,005,000	5,005,000	5,005,000
Common stock warrants	9,231,146	—	8,810,164	6,376,519

For purposes of determining diluted loss per share, the Company has elected a policy to assume that the principal portion of the Convertible Notes, as described in Note 8, Long-term Debt, is settled in cash and the conversion premium is settled in shares. Therefore, the Company has adopted a policy of calculating the diluted loss per share effect of the Convertible Notes using the treasury stock method. As a result, the dilutive effect of the Convertible Notes is limited to the conversion premium, which is reflected in the calculation of diluted loss per share as if it were a freestanding written call option on the Company’s shares. Using the treasury stock method, the warrants issued in connection with the issuance of the Convertible Notes are considered to be dilutive when they are in the money relative to the Company’s average common stock price during the period. The Convertible Note Hedges purchased in connection with the issuance of the Convertible Notes are always considered to be anti-dilutive and therefore do not impact the Company’s calculation of diluted loss per share.

23

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Equity Awards

Description of the Plans

In June 2020, the shareholders approved the Horizon Global Corporation 2020 Equity and Incentive Compensation Plan (the “Horizon 2020 Plan”). Horizon employees, non-employee directors and certain consultants participate in the Horizon 2020 Plan. The Horizon 2020 Plan authorizes the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), appreciation rights, restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, dividend equivalents and certain other awards based upon terms and conditions described in the Horizon 2020 Plan. No more than 4.1 million Horizon common shares may be delivered under the Horizon 2020 Plan, plus (A) the total number of shares remaining available for awards under the Horizon 2015 Plan, as defined and described below, as of June 19, 2020, plus (B) the shares that are subject to awards granted under the Horizon 2020 Plan or the Horizon 2015 Plan that are added (or added back, as applicable) to the aggregate number of shares available under the Horizon 2020 Plan pursuant to the share counting rules of the Horizon 2020 Plan. These shares may be shares of original issuance or treasury shares, or a combination of both.

Prior to the Horizon 2020 Plan, employees and non-employee directors participated in the Horizon Global Corporation 2015 Equity and Incentive Compensation Plan (as amended and restated, the “Horizon 2015 Plan”). The Horizon 2015 Plan authorized the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, and certain other awards based on or related to our common stock to Horizon employees and non-employee directors.

Stock Options

Horizon’s stock option activity is as follows:

	Number of Stock Options	Weighted Average Exercise Price		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	18,961	$	10.43
Granted	—	—
Exercised	—	—
Canceled, forfeited	—	—
Expired	—	—
Outstanding at September 30, 2021	18,961	$	10.43	4.2	$	—

As of September 30, 2021, there was no unrecognized compensation cost related to stock options. During the three and nine months ended September 30, 2021 and 2020, there was no stock-based compensation expense recognized by the Company related to stock options. As of September 30, 2021, the aggregate intrinsic value of outstanding stock options was immaterial. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Restricted Stock Units

During the nine months ended September 30, 2021, the Company granted an aggregate of 532,899 restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain key employees and non-employee directors. The total grants consisted of: (i) 83,482 RSUs that vested during the period; (ii) 153,563 time-based RSUs vesting on a ratable basis on March 1, 2022, March 1, 2023 and March 1, 2024; (iii) 230,350 PSUs vesting on April 1, 2024 and (iv) 65,504 time-based RSUs vesting on May 28, 2022.

During 2020, the Company granted an aggregate of 1,502,072 RSUs and PSUs to certain key employees and non-employee directors. The total grants consisted of: (i) 284,859 time-based RSUs vesting on a ratable basis on March 3, 2021, March 3, 2022 and March 3, 2023; (ii) 277,228 time-based RSUs vesting on June 24, 2021; (iii) 21,351 time-based RSUs vesting on a ratable basis on April 2, 2021, March 3, 2022 and March 3, 2023 and (iv) 918,634 PSUs vesting on March 3, 2023.

24

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The performance criteria for the PSUs granted is based on the Company’s three-year cumulative EBITDA. The grant date fair values for the PSUs and RSUs are based on the closing trading price of the Company’s common stock on the date of grant.

The grant date fair value of RSUs is expensed over the vesting period. Changes in the number of RSUs outstanding for the nine months ended September 30, 2021 are as follows:

	Number of Restricted Stock Units(a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020	1,800,682	$	3.14
Granted	532,899	8.98
Vested	(499,826)	2.64
Canceled, forfeited	(71,669)	5.00
Outstanding at September 30, 2021	1,762,086	$	4.97

(a)Includes PSUs at 100% attainment.

As of September 30, 2021, there was $4.8 million in unrecognized compensation costs related to unvested RSUs that is expected to be recognized over a weighted-average period of 2.0 years.

During the three and nine months ended September 30, 2021, the Company recognized $0.9 million and $2.6 million, respectively, of stock-based compensation expense related to RSUs, and during the three and nine months ended September 30, 2020, the Company recognized $0.9 million and $2.2 million, respectively, of stock-based compensation expense related to RSUs. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

25

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Shareholders’ Equity

Preferred Stock

The Company is authorized to issue 100,000,000 shares of preferred stock, par value of $0.01 per share. As of September 30, 2021 and December 31, 2020, there were no preferred shares outstanding.

Common Stock

The Company is authorized to issue 400,000,000 shares of Horizon Global common stock, par value of $0.01 per share. As of September 30, 2021, there were 27,973,153 shares of common stock issued and 27,286,647 shares of common stock outstanding. As of December 31, 2020, there were 27,089,673 shares of common stock issued and 26,403,167 shares of common stock outstanding.

Common Stock Warrants

In March 2019, in connection with the Second Lien Term Loan, the Company became obligated to issue detachable warrants to purchase up to 6.25 million shares of the Company’s common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $1.50 per share.

In February 2021, in connection with the Senior Term Loan Credit Agreement, the Company issued the Senior Term Loan Warrants to purchase up to 3,905,486 shares of the Company’s common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $9.00 per share. See Note 8, Long-term Debt, for additional information.

As of September 30, 2021, warrants to purchase 1,228,490 shares of the Company’s common stock have been exercised, resulting in the issuance of 972,924 shares of the Company’s common stock. As of September 30, 2021, warrants to purchase 9,231,146 shares of the Company’s common stock were issued and remain outstanding. During the nine months ended September 30, 2021, a related-party entity, JKI Holdings, LLC, an entity owned by the chair of our board of directors, exercised in full the warrants that it originally received in connection with the March 2019 issuance described above, and paid the exercise price in cash and received 278,283 shares of common stock. During the nine months ended September 30, 2021, the Company recognized $0.3 million of non-cash transactions in connection with warrants exercised.

Accumulated Other Comprehensive Income (Loss) (“AOCI”)

The change in AOCI attributable to Horizon Global by component, net of tax, for the nine months ended September 30, 2021 is as follows:

	Foreign Currency Translation and Other
	(dollars in thousands)
Balance at January 1, 2021	$	(6,540)
Net unrealized losses arising during the period	(4,070)
Net change	(4,070)
Balance at September 30, 2021	$	(10,610)

The change in AOCI attributable to Horizon Global by component, net of tax, for the nine months ended September 30, 2020 is as follows:

	Foreign Currency Translation and Other
	(dollars in thousands)
Balance at January 1, 2020	$	(9,790)
Net unrealized losses arising during the period	(400)
Net change	(400)
Balance at September 30, 2020	$	(10,190)

26

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Segment Information

The Company groups its business into operating segments generally by the region in which sales and manufacturing efforts are focused, which are grouped on the basis of similar product, market and operating factors. Each operating segment has discrete financial information evaluated regularly by the Company’s chief operating decision maker in determining resource allocation and assessing performance. The Company reports the results of its business in two operating segments: Horizon Americas and Horizon Europe-Africa. Horizon Americas is comprised of the Company’s North American operations, and prior to the Brazil Sale also included the Company’s South American operations. Horizon Europe-Africa is comprised of the Company’s European and South African operations. See below for further information regarding the types of products and services provided within each operating segment.

The Company previously had a third operating segment, Horizon Asia-Pacific (“APAC”); however, the APAC segment was sold on September 19, 2019, and is presented as a discontinued operation in the accompanying condensed consolidated financial statements. During the first quarter of 2020, the remaining post-closing conditions of the sale were completed, resulting in a true up to net cash proceeds, which were recognized as a loss on sale of discontinued operations of $0.5 million in accordance with Accounting Standards Codification 205, “Discontinued Operations”.

Horizon Americas - A market leader in the design, manufacture and distribution of a wide variety of high-quality, custom engineered towing, trailering and cargo management products and related accessories. These products are designed to support automotive OEMs, automotive OESs, aftermarket and retail customers in the agricultural, automotive, construction, industrial, marine, military, recreational vehicle, trailer and utility end markets. Products include brake controllers, cargo management, heavy-duty towing products, jacks and couplers, protection/securing systems, trailer structural and electrical components, tow bars, vehicle roof racks, vehicle trailer hitches and additional accessories.

Horizon Europe‑Africa - With a product offering similar to Horizon Americas, Horizon Europe-Africa focuses its sales and manufacturing efforts in the Europe and Africa regions of the world.

The Company’s operating segment activity is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Net Sales
Horizon Americas	$	115,850	$	119,140	$	354,060	$	285,630
Horizon Europe-Africa	80,690		82,490		263,790		199,740
Total	$	196,540	$	201,630	$	617,850	$	485,370
Operating Profit (Loss)
Horizon Americas	$	12,400	$	13,170	$	41,000	$	19,330
Horizon Europe-Africa	(150)		2,440		2,550		(6,040)
Corporate	(5,920)		(7,050)		(19,110)		(19,380)
Total	$	6,330	$	8,560	$	24,440	$	(6,090)

27

HORIZON GLOBAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Income Taxes

At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. Effective tax rates vary from period to period as separate calculations are performed for those countries where the Company's operations are profitable and whose results continue to be tax-effected and for those countries where full deferred tax valuation allowances exist and are maintained. In determining the estimated annual effective tax rate, the Company analyzes various factors, including but not limited to, forecasts of projected annual earnings, taxing jurisdictions in which the pretax income and/or pretax losses will be generated, available tax planning strategies.

During the three and nine months ended September 30, 2021, the effective income tax rate was (17.4)% and (19.9)%, respectively. During the three and nine months ended September 30, 2020, the effective income tax rate was 5.9% and (0.5)%, respectively. The differences in the effective tax rate compared to the statutory tax rate is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.

The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance is necessary. Full valuation allowances that are recorded for deferred tax assets in the U.S. and certain foreign jurisdictions will be maintained until sufficient positive evidence exists to reduce or eliminate them. The factors considered by management in its determination of the probability of the realization of the deferred tax assets include, but are not limited to, recent historical financial results, historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, tax planning strategies. If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. The Company has recently experienced pre-tax losses. As of September 30, 2021, the Company believes that it is more likely than not that the recorded deferred tax assets will be realized.

16. Other (Expense) Income, Net

Other (expense) income, net consists of the following components:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Foreign currency (loss) gain	$	(1,370)	$	1,080	$	(3,020)	$	(670)
Customer pay discounts	(280)		(420)		(780)		(960)
Loss on sale of business	—		—		(2,230)		—
Other, net	(70)		30		90		200
Total	$	(1,720)	$	690	$	(5,940)	$	(1,430)

28

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 the Securities and Exchange Commission, as well as our Annual Report on Form 10-K for the twelve months ended December 31, 2020 (See Item 1A. Risk Factors).

Overview

Headquartered in Plymouth, Michigan, Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global,” “we,” “our,” 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 primarily in the North American, European and African markets, primarily servicing the aftermarket, automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment servicers (“automotive OESs”) (collectively, “OEs”), retail, e-commerce and industrial channels, supporting our customers generally 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 in recent years, including the operational improvement initiatives implemented in 2019-2020, which are continuously ongoing to support margin expansion;

•Our ability to continue to manage our liquidity, including continuing to service our debt obligations and comply with the applicable financial covenants thereto, especially given our recent debt refinancing and capital structure alignment to support business growth and the Company’s long-term strategic plan;

•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 or realign our geographic coverage or distribution channels and realize desired operating efficiencies and product line or customer content penetration;

•Our ability to manage our cost structure more efficiently via global supply base management, internal sourcing and/or purchasing of materials, freight and logistics management, selective outsourcing of support functions, working capital management and a global approach to leverage our administrative functions; and

•Our ability to manage liquidity and other economic and business uncertainties related to the COVID-19 pandemic that may result in future business disruption, including any mandated operating restrictions such as temporary facility closures.

If we are unable to do any of the foregoing successfully, our financial condition and results of operations could be materially and adversely impacted.

Horizon Global reports its business in two operating segments: Horizon Americas and Horizon Europe-Africa. See Note 14, 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.

Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost and are included in cost of sales in our condensed consolidated statements of operations. Other shipping and handling expenses, which primarily relate to Horizon Americas’ distribution network, are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

29

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 U.S. GAAP and should not be considered an alternative to net income attributable to Horizon Global, which is the most directly comparable financial measure to Adjusted EBITDA that is prepared in accordance with U.S. GAAP. Adjusted EBITDA, as determined and measured by Horizon 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 (loss) attributable to Horizon 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, gains (losses) on debt extinguishment, impairment of goodwill and other intangibles, non-cash stock compensation, certain product liability and litigation claims, acquisition and integration costs, gains (losses) on business divestitures and other assets, debt issuance costs, 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 ended September 30, 2021:

	Three Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Corporate		Consolidated
	(dollars in thousands)
Net loss attributable to Horizon Global							$	(2,470)
Net loss attributable to noncontrolling interest							(300)
Net loss							$	(2,770)
Interest expense							6,970
Income tax expense							410
Depreciation and amortization							5,210
EBITDA	$	14,050	$	2,030	$	(6,260)	$	9,820
Net loss attributable to noncontrolling interest	—		300		—		300
Severance	50		—		—		50
Restructuring, relocation and related business disruption costs	60		30		10		100
Non-cash stock compensation	—		—		880		880
Loss on business divestitures and other assets	300		10		10		320
Debt issuance costs	—		70		100		170
Unrealized foreign currency remeasurement costs	(10)		950		400		1,340
Adjusted EBITDA	$	14,450	$	3,390	$	(4,860)	$	12,980

30

The following table summarizes Adjusted EBITDA for our operating segments for the three months ended September 30, 2020:

	Three Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Corporate		Consolidated
	(dollars in thousands)
Net income attributable to Horizon Global							$	1,930
Net loss attributable to noncontrolling interest							(340)
Net income							$	1,590
Interest expense							7,560
Income tax expense							100
Depreciation and amortization							5,620
EBITDA	$	13,870	$	7,490	$	(6,490)	$	14,870
Net loss attributable to noncontrolling interest	—		340		—		340
Severance	—		(170)		—		(170)
Restructuring, relocation and related business disruption costs	250		(20)		150		380
Non-cash stock compensation	—		—		870		870
Loss (gain) on business divestitures and other assets	420		—		(20)		400
Debt issuance costs	—		—		530		530
Unrealized foreign currency remeasurement costs	980		(1,580)		(500)		(1,100)
Adjusted EBITDA	$	15,520	$	6,060	$	(5,460)	$	16,120

31

Segment Information

Financial information for our operating segments for the three months ended September 30, 2021 and 2020 is as follows:

	Three Months Ended September 30,								Change				Constant Currency Change
	2021		As a Percentage of Net Sales		2020		As a Percentage of Net Sales		$		%		$		%
	(dollars in thousands)
Net Sales
Horizon Americas	$	115,850	58.9	%	$	119,140	59.1	%	$	(3,290)	(2.8	%)	$	(3,290)	(2.8	%)
Horizon Europe-Africa	80,690		41.1	%	82,490		40.9	%	(1,800)		(2.2	%)	(2,930)		(3.6	%)
Total	$	196,540	100.0	%	$	201,630	100.0	%	$	(5,090)	(2.5	%)	$	(6,220)	(3.1	%)
Gross Profit
Horizon Americas	$	29,310	25.3	%	$	32,960	27.7	%	$	(3,650)	(11.1	%)	$	(3,800)	(11.5	%)
Horizon Europe-Africa	9,450		11.7	%	10,410		12.6	%	(960)		(9.2	%)	(930)		(8.9	%)
Total	$	38,760	19.7	%	$	43,370	21.5	%	$	(4,610)	(10.6	%)	$	(4,730)	(10.9	%)
Selling, General and Administrative Expenses
Horizon Americas	$	16,910	14.6	%	$	19,780	16.6	%	$	(2,870)	(14.5	%)	$	(2,970)	(15.0	%)
Horizon Europe-Africa	9,600		11.9	%	7,960		9.6	%	1,640		20.6	%	1,460		18.3	%
Corporate	5,920		N/A		7,070		N/A		(1,150)		(16.3	%)	(1,150)		(16.3	%)
Total	$	32,430	16.5	%	$	34,810	17.3	%	$	(2,380)	(6.8	%)	$	(2,660)	(7.6	%)
Operating Profit (Loss)
Horizon Americas	$	12,400	10.7	%	$	13,170	11.1	%	$	(770)	(5.8	%)	$	(830)	(6.3	%)
Horizon Europe-Africa	(150)		(0.2)	%	2,440		3.0	%	(2,590)		(106.1	%)	(2,390)		(98.0	%)
Corporate	(5,920)		N/A		(7,050)		N/A		1,130		16.0	%	1,130		16.0	%
Total	$	6,330	3.2	%	$	8,560	4.2	%	$	(2,230)	(26.1	%)	$	(2,090)	(24.4	%)
Capital Expenditures
Horizon Americas	$	2,170	1.9	%	$	1,180	1.0	%	$	990	83.9	%	$	990	83.9	%
Horizon Europe-Africa	2,620		3.2	%	1,460		1.8	%	1,160		79.5	%	1,510		103.4	%
Corporate	—		N/A		—		N/A		—		—	%	—		—	%
Total	$	4,790	2.4	%	$	2,640	1.3	%	$	2,150	81.4	%	$	2,500	94.7	%
Depreciation of Property and Equipment and Amortization of Intangibles
Horizon Americas	$	1,990	1.7	%	$	2,100	1.8	%	$	(110)	(5.2	%)	$	(110)	(5.2	%)
Horizon Europe-Africa	3,180		3.9	%	3,470		4.2	%	(290)		(8.4	%)	(340)		(9.8	%)
Corporate	40		N/A		50		N/A		(10)		(20.0	%)	(10)		(20.0	%)
Total	$	5,210	2.7	%	$	5,620	2.8	%	$	(410)	(7.3	%)	$	(460)	(8.2	%)
Adjusted EBITDA
Horizon Americas	$	14,450	12.5	%	$	15,520	13.0	%	$	(1,070)	(6.9	%)	N/A		N/A
Horizon Europe-Africa	3,390		4.2	%	6,060		7.3	%	(2,670)		(44.1	%)	N/A		N/A
Corporate	(4,860)		N/A		(5,460)		N/A		600		11.0	%	N/A		N/A
Total	$	12,980	6.6	%	$	16,120	8.0	%	$	(3,140)	(19.5	%)	N/A		N/A

32

Results of Operations

Three Months Ended September 30, 2021 Compared with Three Months Ended September 30, 2020

Consolidated net sales decreased $5.0 million, or 2.5%, to $196.5 million during the three months ended September 30, 2021, as compared to $201.6 million during the three months ended September 30, 2020. Net sales for Horizon Americas decreased $3.2 million, driven primarily by a decrease in sales volumes in the aftermarket, OE and retail sales channels, partially offset by pricing recovery initiatives driven by commodity and input cost increases. Net sales for Horizon Europe-Africa decreased $1.8 million, driven primarily by a decrease in sales volumes in the aftermarket and automotive OEM sales channels, partially offset by higher sales volumes in the automotive OES and e-commerce sales channels. The decrease was also partially offset by pricing recovery initiatives driven by commodity and input cost increases and favorable currency translation.

Gross profit margin (gross profit as a percentage of net sales) was 19.7% and 21.5% during the three months ended September 30, 2021 and 2020, respectively. The decline in gross profit margin is primarily due to lower net sales in Horizon Americas and Horizon Europe-Africa as detailed above.

Selling, general and administrative (“SG&A”) expenses decreased $2.4 million, primarily attributable to $2.0 million lower personnel and other variable compensation costs combined across the Company.

Operating margin (operating profit (loss) as a percentage of net sales) was 3.2% and 4.2% during the three months ended September 30, 2021 and 2020, respectively. Operating profit decreased $2.3 million to $6.3 million during the three months ended September 30, 2021, from an operating profit of $8.6 million during the three months ended September 30, 2020. The decline in operating profit and operating margin were primarily due to the operational results detailed above.

Other (expense) income, net was $(1.7) million of expense during the three months ended September 30, 2021, as compared to $0.7 million of income during the three months ended September 30, 2020. The $2.4 million change is primarily attributable to $(1.4) million of foreign currency loss during the three months ended September 30, 2021 as compared to $1.1 million of foreign currency gain during the three months ended September 30, 2020.

Interest expense decreased $0.6 million to $7.0 million during the three months ended September 30, 2021, as compared to $7.6 million during the three months ended September 30, 2020, primarily as a result of the Company’s February 2021 refinancing, which resulted in a new term loan agreement and replaced the Company’s existing term loan agreement. The new term loan included a lower interest rate and removed paid-in-kind interest, resulting in lower interest expense for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020. Refer to Note 8, Long-term Debt, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information of the Company’s February 2021 refinancing.

The effective income tax rate for the three months ended September 30, 2021 and 2020 was (17.4)% and 5.9%, respectively. The increase in tax expense and related impacts on the effective income tax rate for the three months ended September 30, 2021 is attributable to projected jurisdictional income mix in jurisdictions not in a valuation allowance, coupled with utilization limitations on usage of U.S. tax attributes. The difference in the effective tax rate compared to the statutory tax rate for both periods is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.

Net (loss) from continuing operations increased $4.4 million to $(2.8) million during the three months ended September 30, 2021, compared to net income from continuing operations of $1.6 million during the three months ended September 30, 2020. The change in net (loss) income from continuing operations was attributable to the operational results detailed above.

See below for a discussion of operating results by segment.

33

Horizon Americas

Net sales by sales channel, in thousands, for Horizon Americas are as follows:

	Three Months Ended September 30,				Change
	2021		2020		$		%
Net Sales
Aftermarket	$	35,390	$	35,390	$	—	—	%
Automotive OEM	24,690		24,010		680		2.8	%
Automotive OES	3,570		2,980		590		19.8	%
Retail	26,460		34,290		(7,830)		(22.8)	%
E-commerce	16,970		15,240		1,730		11.4	%
Industrial	8,770		7,230		1,540		21.3	%
Total	$	115,850	$	119,140	$	(3,290)	(2.8)	%

Net sales decreased $3.2 million, or 2.8%, to $115.9 million during the three months ended September 30, 2021, as compared to $119.1 million during the three months ended September 30, 2020, primarily attributable to lower sales volumes in the aftermarket, OE and retail sales channels, as well as $1.3 million impact attributable to the Company’s sale of its Brazil business in the second quarter of 2021. The decrease in net sales was partially offset by $13.0 million of pricing recovery initiatives implemented, primarily in the aftermarket, OE, retail and e-commerce sales channels, to recover increased material and input costs. The decrease was also partially offset by a $2.5 million decrease in sales returns and allowances.

Horizon Americas’ gross profit decreased $3.7 million, or 11.1%, to $29.3 million, or 25.3% of net sales, during the three months ended September 30, 2021, as compared to $33.0 million, or 27.7% of net sales, during the three months ended September 30, 2020. The decrease in gross profit and gross profit margin reflects the changes in net sales detailed above, coupled with unfavorable cost performance, primarily attributable to unfavorable material, supply chain and other manufacturing input costs associated with global macroeconomic factors.

SG&A decreased $2.9 million to $16.9 million, or 14.6% of net sales, during the three months ended September 30, 2021, as compared to $19.8 million, or 16.6% of net sales, during the three months ended September 30, 2020. The decrease in SG&A is primarily attributable to the following:

–$1.4 million lower distribution center lease, operating and support costs; and

–$1.3 million lower personnel and other variable compensation costs.

Horizon Americas’ operating profit decreased $0.8 million to $12.4 million, or 10.7% of net sales, during the three months ended September 30, 2021, as compared to $13.2 million, or 11.1% of net sales, during the three months ended September 30, 2020. Decreased operating profit and operating margin were primarily due to the operational results detailed above.

Horizon Americas’ Adjusted EBITDA decreased $1.0 million to $14.5 million during the three months ended September 30, 2021, as compared to Adjusted EBITDA of $15.5 million during the three months ended September 30, 2020. Adjusted EBITDA declined primarily due to the operational results detailed above.

34

Horizon Europe-Africa

Net sales by sales channel, in thousands, for Horizon Europe-Africa are as follows:

	Three Months Ended September 30,				Change
	2021		2020		$		%
Net Sales
Aftermarket	$	22,400	$	24,360	$	(1,960)	(8.0)	%
Automotive OEM	34,590		42,400		(7,810)		(18.4)	%
Automotive OES	20,790		13,820		6,970		50.4	%
E-commerce	1,950		630		1,320		209.5	%
Industrial	480		550		(70)		(12.7)	%
Other	480		730		(250)		(34.2)	%
Total	$	80,690	$	82,490	$	(1,800)	(2.2)	%

Net sales decreased $1.8 million, or 2.2%, to $80.7 million during the three months ended September 30, 2021, as compared to $82.5 million, during the three months ended September 30, 2020, primarily attributable to lower sales volumes in the aftermarket and automotive OEM sales channels, partially offset by higher sales volumes in the automotive OES and e-commerce sales channels. The decrease was also partially offset by $5.8 million of pricing recovery initiatives implemented, primarily in the OE sales channels, to recover increased material and input costs. The decrease was also partially offset by $1.1 million of favorable currency translation.

Horizon Europe-Africa’s gross profit decreased $0.9 million, or 9.2%, to $9.5 million, or 11.7% of net sales, during the three months ended September 30, 2021, from $10.4 million, or 12.6% of net sales, during the three months ended September 30, 2020. The decrease in gross profit and gross profit margin reflects the changes in net sales detailed above, coupled with unfavorable cost performance, primarily attributable to unfavorable material, supply chain and other manufacturing input costs associated with global macroeconomic factors.

SG&A increased $1.6 million to $9.6 million, or 11.9% of net sales, during the three months ended September 30, 2021, as compared to $8.0 million, or 9.6% of net sales, during the three months ended September 30, 2020. The increase in SG&A is primarily attributable to the following:

–$0.6 million increased allowance for doubtful accounts; and

–$0.5 million of higher personnel and other variable compensation costs.

Horizon Europe-Africa’s operating (loss) increased $2.6 million to an operating (loss) of $(0.2) million, or (0.2)% of net sales, during the three months ended September 30, 2021, as compared to operating profit of $2.4 million, or 3.0% of net sales, during the three months ended September 30, 2020. The change in operating (loss) profit and operating margin were primarily due to the operational results detailed above.

Horizon Europe-Africa’s Adjusted EBITDA decreased $2.7 million to $3.4 million during the three months ended September 30, 2021, as compared to Adjusted EBITDA of $6.1 million during the three months ended September 30, 2020. Adjusted EBITDA declined primarily due to the operational results detailed above.

Corporate Expenses

Corporate expenses included in operating profit decreased $1.2 million to $5.9 million during the three months ended September 30, 2021, as compared to $7.1 million during the three months ended September 30, 2020. The decrease was primarily attributable to the following:

–$1.2 million lower personnel and other variable compensation costs.

Corporate Adjusted EBITDA was $(4.9) million during the three months ended September 30, 2021, as compared to Adjusted EBITDA of $(5.5) million during the three months ended September 30, 2020. The change in Adjusted EBITDA was primarily due to the operational results detailed above.

35

The following table summarizes Adjusted EBITDA for our operating segments for the nine months ended September 30, 2021:

	Nine Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Corporate		Consolidated
	(dollars in thousands)
Net loss attributable to Horizon Global							$	(15,990)
Net loss attributable to noncontrolling interest							(970)
Net loss							$	(16,960)
Interest expense							21,000
Income tax expense							2,810
Depreciation and amortization							15,930
EBITDA	$	43,230	$	10,860	$	(31,310)	$	22,780
Net loss attributable to noncontrolling interest	—		970		—		970
Severance	50		—		—		50
Restructuring, relocation and related business disruption costs	(780)		50		(30)		(760)
Loss on debt extinguishment	—		—		11,650		11,650
Non-cash stock compensation	—		—		2,590		2,590
Loss on business divestitures and other assets	3,020		—		10		3,030
Debt issuance costs	—		70		290		360
Unrealized foreign currency remeasurement costs	260		1,900		820		2,980
Adjusted EBITDA	$	45,780	$	13,850	$	(15,980)	$	43,650

The following table summarizes Adjusted EBITDA for our operating segments for the nine months ended September 30, 2020:

	Nine Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Corporate		Consolidated
	(dollars in thousands)
Net loss attributable to Horizon Global							$	(31,150)
Net loss attributable to noncontrolling interest							(1,010)
Net loss							$	(32,160)
Interest expense							23,970
Income tax expense							170
Depreciation and amortization							16,150
EBITDA	$	24,160	$	3,150	$	(19,180)	$	8,130
Net loss attributable to noncontrolling interest	—		1,010		—		1,010
Loss from discontinued operations, net of tax	—		—		500		500
Severance	530		(150)		(10)		370
Restructuring, relocation and related business disruption costs	1,550		10		470		2,030
Non-cash stock compensation	—		—		2,190		2,190
Loss (gain) on business divestitures and other assets	1,020		(180)		20		860
Product liability and litigation claims	—		1,510		—		1,510
Debt issuance costs	—		—		1,840		1,840
Unrealized foreign currency remeasurement costs	280		860		(490)		650
Adjusted EBITDA	$	27,540	$	6,210	$	(14,660)	$	19,090

36

The following table summarizes financial information for our operating segments for the nine months ended September 30, 2021 and 2020:

	Nine Months Ended September 30,								Change				Constant Currency Change
	2021		As a Percentage of Net Sales		2020		As a Percentage of Net Sales		$		%		$		%
	(dollars in thousands)
Net Sales
Horizon Americas	$	354,060	57.3	%	$	285,630	58.8	%	$	68,430	24.0	%	$	68,880	24.1	%
Horizon Europe-Africa	263,790		42.7	%	199,740		41.2	%	64,050		32.1	%	48,090		24.1	%
Total	$	617,850	100.0	%	$	485,370	100.0	%	$	132,480	27.3	%	$	116,970	24.1	%
Gross Profit
Horizon Americas	$	93,660	26.5	%	$	70,720	24.8	%	$	22,940	32.4	%	$	22,650	32.0	%
Horizon Europe-Africa	32,950		12.5	%	16,950		8.5	%	16,000		94.4	%	14,250		84.1	%
Total	$	126,610	20.5	%	$	87,670	18.1	%	$	38,940	44.4	%	$	36,900	42.1	%
Selling, General and Administrative Expenses
Horizon Americas	$	52,660	14.9	%	$	51,400	18.0	%	$	1,260	2.5	%	$	1,150	2.2	%
Horizon Europe-Africa	30,400		11.5	%	22,980		11.5	%	7,420		32.3	%	5,530		24.1	%
Corporate	19,110		N/A		19,380		N/A		(270)		(1.4)	%	(270)		(1.4)	%
Total	$	102,170	16.5	%	$	93,760	19.3	%	$	8,410	9.0	%	$	6,410	6.8	%
Operating Profit (Loss)
Horizon Americas	$	41,000	11.6	%	$	19,330	6.8	%	$	21,670	112.1	%	$	21,490	111.2	%
Horizon Europe-Africa	2,550		1.0	%	(6,040)		(3.0)	%	8,590		142.2	%	8,700		144.0	%
Corporate	(19,110)		N/A		(19,380)		N/A		270		1.4	%	270		1.4	%
Total	$	24,440	4.0	%	$	(6,090)	(1.3)	%	$	30,530	501.3	%	$	30,460	500.2	%
Capital Expenditures
Horizon Americas	$	6,550	1.8	%	$	2,650	0.9	%	$	3,900	147.2	%	$	3,890	146.8	%
Horizon Europe-Africa	8,180		3.1	%	5,440		2.7	%	2,740		50.4	%	2,230		41.0	%
Corporate	—		N/A		—		N/A		—		—	%	—		—	%
Total	$	14,730	2.4	%	$	8,090	1.7	%	$	6,640	82.1	%	$	6,120	75.6	%
Depreciation of Property and Equipment and Amortization of Intangibles
Horizon Americas	$	5,680	1.6	%	$	6,300	2.2	%	$	(620)	(9.8)	%	$	(620)	(9.8)	%
Horizon Europe-Africa	10,110		3.8	%	9,690		4.9	%	420		4.3	%	(180)		(1.9)	%
Corporate	140		N/A		160		N/A		(20)		(12.5)	%	(20)		(12.5)	%
Total	$	15,930	2.6	%	$	16,150	3.3	%	$	(220)	(1.4)	%	$	(820)	(5.1)	%
Adjusted EBITDA
Horizon Americas	$	45,780	12.9	%	$	27,540	9.6	%	$	18,240	66.2	%	N/A		N/A
Horizon Europe-Africa	13,850		5.3	%	6,210		3.1	%	7,640		123.0	%	N/A		N/A
Corporate	(15,980)		N/A		(14,660)		N/A		(1,320)		(9.0)	%	N/A		N/A
Total	$	43,650	7.1	%	$	19,090	3.9	%	$	24,560	128.7	%	N/A		N/A

37

Results of Operations

Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020

Consolidated net sales increased $132.5 million, or 27.3%, to $617.9 million during the nine months ended September 30, 2021, as compared to $485.4 million during the nine months ended September 30, 2020. The impact was driven by an increase in net sales in Horizon Americas and Horizon Europe-Africa primarily attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that impacted the Company, most significantly in the first and second quarters of 2020. Net sales for Horizon Americas increased $68.4 million, driven by increases in sales volumes as well as pricing recovery initiatives driven by commodity and input cost increases. Net sales for Horizon Europe-Africa increased $64.1 million, driven by increases in sales volumes as well as favorable currency translation.

Gross profit margin was 20.5% and 18.1% during the nine months ended September 30, 2021 and 2020, respectively. The improved gross profit margin is primarily due to higher net sales in Horizon Americas and Horizon Europe-Africa as detailed above, coupled with favorable net sales channel mix, as well as improved operating efficiency during the nine months ended September 30, 2021, as compared to nine months ended September 30, 2020, as a result of the impacts of the COVID-19 pandemic experienced during the nine months ended September 30, 2020.

SG&A increased $8.4 million primarily attributable to $5.8 million higher personnel and other variable compensation costs combined across the Company, driven primarily by temporary salary reductions in the U.S. and the Company’s participation in certain payroll reimbursement programs during the nine months ended September 30, 2020 in response to the impacts of the COVID-19 pandemic. Unfavorable currency translation in Horizon Europe-Africa of $1.9 million also contributed to the increase.

Operating margin was 4.0% and (1.3)% during the nine months ended September 30, 2021 and 2020, respectively. Operating profit improved $30.5 million to an operating profit of $24.4 million during the nine months ended September 30, 2021, from an operating (loss) of $(6.1) million during the nine months ended September 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.

Other expense, net increased $4.5 million to $5.9 million during the nine months ended September 30, 2021, as compared to $1.4 million during the nine months ended September 30, 2020, primarily attributable to $2.4 million of higher foreign currency loss during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. The increase was also due to the $2.2 million loss on the sale of the Company’s Brazil business completed during the second quarter of 2021. Refer to Note 4, Goodwill and Other Intangible Assets, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information of the sale of the Company’s Brazil business.

Interest expense decreased $3.0 million to $21.0 million during the nine months ended September 30, 2021, as compared to $24.0 million during the nine months ended September 30, 2020, primarily as a result of the Company’s February 2021 refinancing, which resulted in a new term loan agreement and replaced the Company’s existing term loan agreement. The new term loan included a lower interest rate and removed paid-in-kind interest, resulting in lower interest expense for the nine months ended September 30, 2021. Additionally, as a result of the refinancing, the Company incurred an $11.7 million loss on debt extinguishment related to the termination of the existing term loan agreement during the nine months ended September 30, 2021. Refer to Note 8, Long-term Debt, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information.

The effective income tax rate for the nine months ended September 30, 2021 and 2020 was (19.9)% and (0.5)%, respectively. The increase in tax expense and related impacts on the effective income tax rate for the nine months ended September 30, 2021 is attributable to projected jurisdictional income mix in jurisdictions not in a valuation allowance, coupled with utilization limitations on usage of U.S. tax attributes. The difference in the effective tax rate compared to the statutory tax rate for both periods is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.

Net loss from continuing operations improved $14.7 million, to a net loss of $(17.0) million for the nine months ended September 30, 2021, compared to a net loss from continuing operations of $(31.7) million for the nine months ended September 30, 2020. The improvement was attributable to the operational results detailed above.

Loss from discontinued operations, net of tax is attributable to the sale of the Company’s former APAC operating segment, which was sold in September 2019. During the nine months ended September 30, 2020, the remaining post-closing conditions of the sale were completed, including a true up to net cash proceeds, which resulted in a loss on sale of discontinued operations of $0.5 million, in accordance with Accounting Standards Codification 205-20, “Discontinued Operations”.

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See below for a discussion of operating results by segment.

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Horizon Americas

Net sales by sales channel, in thousands, for Horizon Americas are as follows:

	Nine Months Ended September 30,				Change
	2021		2020		$		%
Net Sales
Aftermarket	$	107,640	$	84,440	$	23,200	27.5	%
Automotive OEM	74,860		53,880		20,980		38.9	%
Automotive OES	11,670		5,330		6,340		118.9	%
Retail	81,650		80,690		960		1.2	%
E-commerce	51,220		41,120		10,100		24.6	%
Industrial	27,020		20,120		6,900		34.3	%
Other	—		50		(50)		N/A
Total	$	354,060	$	285,630	$	68,430	24.0	%

Net sales increased $68.5 million, or 24.0%, to $354.1 million during the nine months ended September 30, 2021, as compared to $285.6 million during the nine months ended September 30, 2020, primarily attributable to higher sales volumes. The increased volumes are primarily attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that impacted the Company, most significantly in the first and second quarters of 2020. Net sales also increased by $26.1 million due to pricing recovery initiatives implemented, primarily in the aftermarket, OE, retail and e-commerce sales channels, to recover increased material and input costs. The increase was partially offset by a $1.2 million increase in sales returns and allowances.

Horizon Americas’ gross profit increased $23.0 million, or 32.4%, to $93.7 million, or 26.5% of net sales, during the nine months ended September 30, 2021, as compared to $70.7 million, or 24.8% of net sales, during the nine months ended September 30, 2020. The increase in gross profit and gross profit margin reflects the changes in net sales detailed above, coupled with unfavorable cost performance, primarily attributable to unfavorable material, supply chain and other manufacturing input costs associated with global macroeconomic factors.

SG&A increased $1.3 million to $52.7 million, or 14.9% of net sales during the nine months ended September 30, 2021, as compared to $51.4 million, or 18.0% of net sales, during the nine months ended September 30, 2020. The increase in SG&A was primarily attributable to the cost saving initiatives implemented by the Company and corresponding savings realized during the nine months ended September 30, 2020 in response to the impacts of the COVID-19 pandemic. As a result, the increase in SG&A is attributable to the following:

–$2.5 million higher personnel and other variable compensation costs, primarily as a result of temporary salary reductions in the U.S. and other compensation and benefit cost reductions in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic; partially offset by:

–$1.1 million lower depreciation and amortization.

Horizon Americas’ operating profit increased $21.7 million to $41.0 million, or 11.6% of net sales, during the nine months ended September 30, 2021, as compared to $19.3 million, or 6.8% of net sales, during the nine months ended September 30, 2020. Improved operating profit and operating margin were primarily due to the operational results detailed above.

Horizon Americas’ Adjusted EBITDA increased $18.3 million to $45.8 million during the nine months ended September 30, 2021, as compared to Adjusted EBITDA of $27.5 million during the nine months ended September 30, 2020. Adjusted EBITDA improved primarily due to operational results detailed above.

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Horizon Europe-Africa

Net sales by sales channel, in thousands, for Horizon Europe-Africa are as follows:

	Nine Months Ended September 30,				Change
	2021		2020		$		%
Net Sales
Aftermarket	$	70,950	$	56,750	$	14,200	25.0	%
Automotive OEM	127,340		104,420		22,920		21.9	%
Automotive OES	56,820		34,000		22,820		67.1	%
E-commerce	5,340		1,290		4,050		314.0	%
Industrial	1,660		1,210		450		37.2	%
Other	1,680		2,070		(390)		(18.8)	%
Total	$	263,790	$	199,740	$	64,050	32.1	%

Net sales increased $64.1 million, or 32.1%, to $263.8 million during the nine months ended September 30, 2021, as compared to $199.7 million during the nine months ended September 30, 2020, primarily attributable to higher sales volumes. The increased volumes are primarily attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that impacted the Company, most significantly in the first and second quarters of 2020. Net sales also increased by $5.9 million due to pricing recovery initiatives implemented, primarily in the OE sales channels, to recover increased material and input costs. The increase was also partially attributable to $16.0 million of favorable currency translation.

Horizon Europe-Africa’s gross profit increased $16.0 million, or 94.4%, to $33.0 million, or 12.5% of net sales, during the nine months ended September 30, 2021, from $17.0 million, or 8.5% of net sales, during the nine months ended September 30, 2020. The increase in gross profit margin reflects the changes in sales detailed above, coupled with unfavorable cost performance, primarily attributable to unfavorable material, supply chain and other manufacturing input costs associated with global macroeconomic factors.

SG&A increased $7.4 million to $30.4 million, or 11.5% of net sales during the nine months ended September 30, 2021, as compared to $23.0 million, or 11.5% of net sales, during the nine months ended September 30, 2020. The increase in SG&A was primarily attributable to the cost saving initiatives implemented by the Company and corresponding savings realized during the nine months ended September 30, 2020 in response to the impacts of the COVID-19 pandemic. As a result, the increase in SG&A is attributable to the following:

–$2.2 million higher personnel and other variable compensation cost, partially as a result of payroll costs reimbursed in the prior year under terms of certain government payroll reimbursement programs;

–$1.3 million of higher outside professional fees and other administrative costs; and

–$1.9 million of unfavorable currency translation.

Horizon Europe-Africa’s operating profit increased $8.6 million to an operating profit of $2.6 million, or 1.0% of net sales during the nine months ended September 30, 2021, as compared to an operating (loss) of $(6.0) million, or (3.0)% of net sales, during the nine months ended September 30, 2020. Improved operating profit (loss) and operating margin were primarily due to the operational results described above.

Horizon Europe-Africa’s Adjusted EBITDA increased $7.7 million to $13.9 million during the nine months ended September 30, 2021, as compared to Adjusted EBITDA of $6.2 million during the nine months ended September 30, 2020. Adjusted EBITDA improved primarily due to operational results detailed above.

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Corporate Expenses

Corporate expenses included in operating profit decreased $0.3 million to $19.1 million during the nine months ended September 30, 2021, as compared to $19.4 million during the nine months ended September 30, 2020. The decrease was primarily attributable to the following:

–$1.6 million lower costs incurred related to professional service fees and other costs associated with new debt issuance, amendments, and modifications and related structure changes; partially offset by:

–$1.1 million higher personnel and other variable compensation costs, primarily as a result of temporary salary reductions in the U.S. and other compensation and benefit cost reductions in the second quarter of 2020 in response to the impacts of the COVID-19 pandemic.

Corporate Adjusted EBITDA was $(16.0) million during the nine months ended September 30, 2021, as compared to Adjusted EBITDA of $(14.7) million during the nine months ended September 30, 2020. The change in Adjusted EBITDA was primarily due to the higher personnel and compensation costs described above.

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Liquidity and Capital Resources

Our capital and working capital requirements are funded through a combination of cash on hand, cash flows from operations, and various borrowings and factoring arrangements described below, including our asset-based Revolving Credit Facility (as defined below). As of September 30, 2021, and December 31, 2020, we had $10.4 million and $18.2 million, respectively, of cash and cash equivalents held at foreign subsidiaries. There may be country specific regulations, which may restrict or result in increased costs in the repatriation of these funds.

In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers (the “ABL Borrowers”). The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of $75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million. The Loan Agreement has subsequently been amended, as described below, to among other modifications, increase the maximum amount of credit available under the Revolving Credit Facility to $95.0 million. As of September 30, 2021, the Company had availability of $37.5 million under the Revolving Credit Facility and $7.0 million of cash and cash equivalents in the United States.

As of September 30, 2021 and December 31, 2020, total cash and availability was $54.9 million and $83.4 million, respectively. The Company defines cash and availability as cash and cash equivalents and amounts of cash accessible but undrawn from credit facilities.

During 2020, in response to the initial uncertain economic environment caused in part from the COVID-19 pandemic, the Company pursued funding from available government programs and other sources of liquidity designed to strengthen its balance sheet and enhance financial flexibility. These sources included short-term loans, some of which are forgivable if certain conditions are met as well as entering into or modifying other arrangements. A summary of these actions is described below.

In April 2020, Horizon Global Company LLC (the “U.S. Borrower”), a direct U.S.-based subsidiary of the Company, received a loan from PNC Bank, National Association for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES Act.

The Company submitted its PPP Loan application in good faith in accordance with the CARES Act and the guidance issued by the Small Business Administration (the “SBA”), including the SBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and sized based criteria of the program.

As of September 30, 2021, the Company’s application of loan forgiveness of $7.1 million of the $8.7 million of funds originally received is subject to the SBA’s final determination of forgiveness, which we expect to receive in the fourth quarter of 2021, based on the review timelines once a borrower has submitted its application in accordance with the issued regulations. The potential loan forgiveness is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of the loan has an interest rate of 1.0% per annum. In July 2021, the note was amended to make the unforgiven portion payable over five years on a monthly basis. The Company has deferred interest payments until the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and Treasury and the terms of the Company’s PPP Loan. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of $7.1 million of our PPP Loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.

In March 2020, Westfalia-Automotive GmbH (“Westfalia”), an indirect subsidiary of the Company, was approved for a government payroll reimbursement program in Germany under the Kurzarbeitergeld (the “KUG”). The KUG is designed to reimburse employers for payroll costs incurred and paid to employees affected by the business disruption and government mandated operating restrictions in place due to the COVID-19 pandemic for the period March 1, 2020 through August 31, 2020. Westfalia was approved to receive reimbursement of certain costs for the period March 19, 2020 through August 31, 2020. The Company was reimbursed $3.3 million for qualifying payroll costs under terms of the KUG for the twelve months ended December 31, 2020.

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We believe the combination of these sources, as well as the changes to our capital structure following our recent refinancing activities, as fully summarized below, will enable us to meet our working capital, capital expenditures and other funding requirements. Our ability to fund our working capital needs, debt payments and other obligations, and to comply with financial covenants, including borrowing base limitations under our Revolving Credit Facility, depends on our future operating performance and cash flow and many factors outside of our control, including the costs of raw materials, the state of the automotive accessories market, financial and economic conditions and the extent and duration of the impact of the COVID-19 pandemic.

Cash Flows - Operating Activities

Net cash used for and provided by operating activities during the nine months ended September 30, 2021 and 2020 was $(30.6) million and $24.2 million, respectively.

During the nine months ended September 30, 2021, the Company generated $24.5 million in cash flows, based on the reported net loss of $(17.0) million and after considering the effects of non-cash items related to depreciation, amortization of intangible assets, loss on debt extinguishment, amortization of original issuance discount and debt issuance costs, deferred income taxes, non-cash compensation expense, paid-in-kind interest, and other, net. During the nine months ended September 30, 2020, the Company generated $3.5 million in cash flows, based on the reported net loss of $(31.7) million and after considering the effects of similar non-cash items previously described.

Changes in operating assets and liabilities used $(55.2) million and sourced $20.7 million of cash during the nine months ended September 30, 2021 and 2020, respectively.

Changes in accounts receivable resulted in a net use of cash of $(12.4) million and $(35.2) million during the nine months ended September 30, 2021 and 2020, respectively. The increase in accounts receivable was lower in the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 primarily as a result of increased collections over the prior year.

Changes in inventory resulted in a use of cash of $(52.7) million during the nine months ended September 30, 2021 and a source of cash of $30.1 million during the nine months ended September 30, 2020. The increase in inventory during the nine months ended September 30, 2021 was due in part to recent macroeconomic factors, such as rising costs of raw materials, constraints on shipping container availability and port congestion leading to higher inventory costs and levels of in-transit inventory. The decrease in inventory during the nine months ended September 30, 2020 was due to improved inventory management coupled with an extended selling season during the nine months ended September 30, 2020.

Changes in accounts payable and accrued liabilities resulted in a source of cash of $11.8 million and $29.8 million during the nine months ended September 30, 2021 and 2020, respectively. The lower source of cash for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 is primarily due to the timing of payments made to suppliers, mix of vendors and related terms.

Cash Flows - Investing Activities

Net cash used for investing activities during the nine months ended September 30, 2021 and 2020 was $(14.7) million and $(8.0) million, respectively.

During the nine months ended September 30, 2021 and 2020, capital expenditures were $(14.7) million and $(8.1) million, respectively, and related to growth, capacity and productivity-related projects within Horizon Americas and Horizon Europe-Africa. The increase in capital expenditures is primarily due to the Company’s curtailment or retiming of certain projects during the nine months ended September 30, 2020, in response to the impacts and business disruptions of the COVID-19 pandemic.

Cash Flows - Financing Activities

Net cash provided by financing activities was $18.0 million and $17.9 million during the nine months ended September 30, 2021 and 2020, respectively.

During the nine months ended September 30, 2021 and 2020, net proceeds from the Revolving Credit Facility, net of issuance costs, were $20.7 million and $26.4 million, respectively. During the nine months ended September 30, 2020, net repayments on the Company’s former asset based lending facility totaled $(19.9) million.

During the nine months ended September 30, 2021, proceeds from the Company’s new term loan, net of issuance costs and related issuance of common stock warrants were $75.3 million and $16.3 million, respectively. During the nine months ended September 30, 2021, repayments of borrowings on Replacement Term Loan, as defined below, including transaction fees were $(94.9) million.

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Additionally, during the nine months ended September 30, 2020, proceeds from the PPP Loan were $8.7 million.

Factoring Arrangements

The Company has factoring arrangements with financial institutions to sell certain accounts receivable. During the nine months ended September 30, 2021 and 2020, total receivables sold under certain non-recourse factoring arrangements was $225.1 million and $166.1 million, respectively. We utilize factoring arrangements as part of our working capital needs. The costs of participating in these arrangements are immaterial to our results. Refer to Note 3, Summary of Significant Accounting Policies, in Item 8, “Financial Statements and Supplementary Data,” included within our Annual Report on Form 10-K for the twelve months ended December 31, 2020, for additional information.

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Our Debt and Other Commitments

We and certain of our subsidiaries are party to the asset-based Revolving Credit Facility, as defined and described above. The Revolving Credit Facility provides for $75.0 million of funding, which has been subsequently increased as described below, on a revolving basis, subject to borrowing base availability, and matures on March 13, 2023. As of September 30, 2021, there was $44.9 million outstanding on the Revolving Credit Facility bearing interest at a weighted average rate of 5.3%.

In February 2021, the Company entered into a limited consent to the Loan Agreement governing its Revolving Credit Facility, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement, as defined and described below.

In April 2021, the Company entered into an amendment to the Loan Agreement governing its Revolving Credit Facility, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility to $85.0 million. The amendment also increased sub-limits relating to the Company’s ability to borrow against in-transit inventory as well as inventory located in the Company’s Mexico facilities.

On September 17, 2021, the Company entered into an amendment to the Loan Agreement governing its Revolving Credit Facility, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility to $95.0 million. The amendment also increased the Company’s ability to borrow against receivables and sub-limits relating to in-transit inventory and inventory located in the Company’s Mexico facilities. The increased borrowing capacity against receivables and inventory is effective through December 31, 2021.

In addition, the Company and certain of its subsidiaries, have been or are parties to other long-term credit agreements, including the Senior Term Loan Credit Agreement, as defined and described below. As of September 30, 2021, there was $100.0 million outstanding on the Senior Term Loan Credit Agreement bearing cash interest at 7.50%.

In February 2017, the Company completed a public offering of 2.75% Convertible Senior Notes due 2022 (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year.

First Lien Term Loan Agreement and Second Lien Term Loan Agreement

In March 2019, the Company amended and restated the existing term loan agreement (the “First Lien Term Loan Agreement”) to permit the Company to, among other things, enter into the Second Lien Term Loan Agreement, as defined and described below.

In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto.

In May 2020, the Company entered into amendments, limited waivers and consents in connection with the Loan Agreement governing its Revolving Credit Facility, the First Lien Term Loan Agreement, and the Second Lien Term Loan Agreement, each with an effective date of April 1, 2020, that, among other things, consented to the Company’s applying for, obtaining and incurring the PPP Loan, as defined and described above.

As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement was replaced by the Replacement Term Loan, as defined and described below.

Replacement Term Loan

In July 2020, the Company entered into a limited consent to the Loan Agreement governing its Revolving Credit Facility and the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the First Lien Term Loan Agreement and Second Lien Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon.

In February 2021, the Company entered into the Senior Term Loan Credit Agreement, as defined and described below. The proceeds received from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan. As a result of the repayment, the credit agreement governing the Company’s Replacement Term Loan was terminated and is no longer in effect.

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Senior Term Loan Credit Agreement

On February 2, 2021, the Company entered into a credit agreement (the “Senior Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the lenders party thereto (collectively, the “Lenders”). The Senior Term Loan Credit Agreement provides for an initial term loan facility in the aggregate principal amount of $100.0 million, all of which has been borrowed by the Company and used to repay the Replacement Term Loan, as described above, and a delayed draw term loan facility in the aggregate principal amount of up to $125.0 million, which may be drawn by the Company in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the delayed draw term loan facility.

Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor. The Senior Term Loan Credit Agreement includes customary affirmative and negative covenants, including a maximum total net leverage ratio requirement tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make capital expenditures exceeding $27.5 million during any fiscal year. To the extent that the amount of capital expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for capital expenditures in the immediately succeeding fiscal year.

Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings under the Senior Term Loan Credit Agreement mature on February 2, 2027.

All of the indebtedness under the Senior Term Loan Credit Agreement is and will be guaranteed by the Company’s existing and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.

Covenant and Liquidity Matters

The Loan Agreement governing our Revolving Credit Facility contains various negative and affirmative covenants and other requirements affecting us and our subsidiaries, including restrictions on incurrence of debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, asset dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The Revolving Credit Facility does not include any financial maintenance covenants other than a financial covenant that stipulates the Company will not make capital expenditures exceeding $30.0 million during any fiscal year.

We are subject to variable interest rates on our Senior Term Loan Credit Agreement and Revolving Credit Facility. At September 30, 2021, 1-Month LIBOR and 3-Month LIBOR approximated 0.08% and 0.13%, respectively.

The Company is in compliance with all of its financial covenants as of September 30, 2021.

In addition to our long-term debt, we have other cash commitments related to leases. We account for these lease transactions as operating leases and rent expense related thereto for the nine months ended September 30, 2021 and 2020 was $10.7 million and $11.5 million, respectively. We expect to continue to utilize leasing as a financing strategy in the future to meet capital expenditure needs and to reduce debt levels.

Refer to Note 8, Long-term Debt, and Note 9, Leases, in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” included within this Quarterly Report on Form 10-Q for additional information.

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Consolidated EBITDA

Consolidated EBITDA (defined as “Consolidated EBITDA” in our Senior Term Loan Agreement) is a comparable measure to how the Company assesses performance. As discussed further in the Segment Information and Supplemental Analysis section above, we use certain non-GAAP financial measures to assess performance and measure our covenant compliance in accordance with the Senior Term Loan Agreement, which includes Adjusted EBITDA at the operating segment level. For the measurement of our Senior Term Loan Agreement financial covenants, the definition of Consolidated EBITDA limits the amount of non-recurring expenses or costs including restructuring, moving and severance that can be excluded to $10 million in any cumulative four fiscal quarter period. Similarly, the definition limits the amount of fees, costs and expenses incurred in connection with any proposed asset sale, offering of equity interests or any indebtedness, lender agent fees, and fees in connection with the maintenance and/or forgiveness of the PPP Loan, in aggregate, that can be excluded to $8 million in any cumulative four fiscal quarter period.

The reconciliations of net income (loss) attributable to Horizon Global to EBITDA, EBITDA to Adjusted EBITDA and Adjusted EBITDA to Consolidated EBITDA are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Last Twelve Months Ended September 30,
	2021		2020		Change		2021		2020		Change		2021		2020		Change
	(dollars in thousands)						(dollars in thousands)						(dollars in thousands)
Net (loss) income attributable to Horizon Global	$	(2,470)	$	1,930	$	(4,400)	$	(15,990)	$	(31,150)	$	15,160	$	(21,400)	$	(62,730)	$	41,330
Net loss attributable to noncontrolling interest	(300)		(340)		40		(970)		(1,010)		40		(1,380)		(1,410)		30
Net (loss) income	$	(2,770)	$	1,590	$	(4,360)	$	(16,960)	$	(32,160)	$	15,200	$	(22,780)	$	(64,140)	$	41,360
Interest expense	6,970		7,560		(590)		21,000		23,970		(2,970)		28,710		31,970		(3,260)
Income tax expense (benefit)	410		100		310		2,810		170		2,640		1,060		(8,320)		9,380
Depreciation and amortization	5,210		5,620		(410)		15,930		16,150		(220)		22,690		21,050		1,640
EBITDA	$	9,820	$	14,870	$	(5,050)	$	22,780	$	8,130	$	14,650	$	29,680	$	(19,440)	$	49,120
Net loss attributable to noncontrolling interest	300		340		(40)		970		1,010		(40)		1,380		1,410		(30)
Loss from discontinued operations, net of tax	—		—		—		—		500		(500)		—		500		(500)
EBITDA from continuing operations	$	10,120	$	15,210	$	(5,090)	$	23,750	$	9,640	$	14,110	$	31,060	$	(17,530)	$	48,590
Adjustments pursuant to Senior Term Loan Agreement:
Losses on sale of receivables	280		420		(140)		780		960		(180)		1,230		1,270		(40)
Debt extinguishment losses	—		—		—		11,650		—		11,650		11,650		—		11,650
Non-cash equity grant expenses	880		870		10		2,590		2,190		400		3,400		2,520		880
Other non-cash expenses or losses (gains)	1,400		(1,080)		2,480		5,320		670		4,650		3,840		(1,180)		5,020
Lender agent related professional fees, costs, and expenses(a)	30		—		30		130		380		(250)		130		460		(330)
Non-recurring expenses or costs(b)	250		700		(450)		(570)		5,180		(5,750)		(340)		16,640		(16,980)
Non-cash losses (gains) on asset sales	20		(10)		30		30		80		(50)		40		(70)		110
Other	—		10		(10)		(30)		(10)		(20)		(40)		480		(520)
Adjusted EBITDA	$	12,980	$	16,120	$	(3,140)	$	43,650	$	19,090	$	24,560	$	50,970	$	2,590	$	48,380
Non-recurring expense limitation(a)(b)	N/A		N/A		N/A		N/A		N/A		N/A		N/A		(6,640)		6,640
Other	—		(10)		10		30		10		20		40		(480)		520
Consolidated EBITDA	$	12,980	$	16,110	$	(3,130)	$	43,680	$	19,100	$	24,580	$	51,010	$	(4,530)	$	55,540

(a) Fees, costs and expenses incurred in connection with any proposed asset sale, offering of equity interests or any indebtedness, lender agent fees, and fees in connection with the maintenance and/or forgiveness of the PPP Loan are not to, in aggregate, exceed $8 million in adjustments in determining Consolidated EBITDA in any four fiscal quarter period.

(b) Non-recurring expenses or costs including restructuring, moving and severance are not to, in aggregate, exceed $10 million in adjustments in determining Consolidated EBITDA in any four fiscal quarter period.

Credit Rating

The Company’s credit agreements do not require that we maintain a credit rating.

48

Outlook

Our business remains susceptible to economic conditions that could adversely affect our results, including potential negative impacts of the COVID-19 pandemic. The trend of customer orders in the economies that most significantly affect our demand has been strong, including the United States and Europe. However, we have experienced rising pricing for certain raw materials, including steel, and while the Company endeavors to recover incremental input costs through pricing actions, the recoveries generally occur over time and are not guaranteed. In addition, recent macroeconomic factors, such as constraints on shipping container availability, port congestion and the global microchip shortage have resulted in a delay of receiving raw materials by the Company or some of our OE customers, which has resulted in retiming some customer orders to future periods. We continue to monitor these supply constraints and remain committed to fulfilling and delivering our customers’ orders driven by the strong product demand we have experienced.

We also remain focused on maintaining liquidity to fund our operations, while considering future maturities in our capital structure, which have been addressed and will continue to be addressed as the Company continues to execute upon its business plan and operational improvement initiatives in 2021. These initiatives were put in place to streamline and simplify its operations and provide a roadmap to achieve our strategic priorities of margin expansion, liquidity management and organic business growth.

We believe the unique strategic footprint we enjoy in our market space will benefit us as our OE customers continue to demonstrate a preference for stronger relationships with few suppliers. We believe that our strong brand positions, portfolio of product offerings, and existing customer relationships present a long-term opportunity for us and provide leverage to see balanced growth in OE, aftermarket and retail businesses. That position and brand recognition allows us flexibility to bring our products to market in various channels that we believe provide us the ability to leverage our current operational footprint to meet or exceed our customer demands.

Impact of New Accounting Standards

See Note 2, New Accounting Pronouncements, included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” within this Quarterly Report on Form 10-Q.

Critical Accounting Policies

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates that affect both the amounts and timing of the recording of assets, liabilities, net sales and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.

There were no material changes to the items that we disclosed as our critical accounting policies in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the twelve months ended December 31, 2020.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

49

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Evaluation of disclosure controls and procedures

As of September 30, 2021, an evaluation was carried out by management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) pursuant to Rule 13a-15 of the Exchange Act. The Company’s disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2021, the Company’s disclosure controls and procedures are effective to provide reasonable assurance that they would meet their objectives.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to claims and litigation in the ordinary course of business, but we do not believe that any such claim or litigation is likely to have a material adverse effect on our financial position, results of operations, or cash flows. For additional information regarding legal proceedings, refer to Note 10, Contingencies, included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” within this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

A discussion of our risk factors, which could materially affect our business, financial condition or future results, can be found in the section entitled “Risk Factors,” in our Annual Report on Form 10-K for the twelve months ended December 31, 2020. There have been no significant changes in our risk factors disclosed in our 2020 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits.

Exhibits Index:

3.1(b)	Amended and Restated Certificate of Incorporation of Horizon Global Corporation, as amended.
3.2(a)	Amended and Restated By-laws of Horizon Global Corporation.
10.1*	Fifth Amendment to Loan and Security Agreement dated September 17, 2021, by and among Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers, Horizon Global Corporation, Horizon Global Company LLC, Cequent Electrical Products de Mexico, S. de R.L. de C.V., and Cequent Sales Company de Mexico, S. de R.L. de C.V., as guarantors, the lenders party thereto and Eclipse Business Capital LLC (f/k/a Encina Business Credit, LLC), as agent for the Lenders.
31.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document. (not part of filing)
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

(a)	Incorporated by reference to the Exhibit filed with our Current Report on Form 8-K filed on February 20, 2019 (File No. 001-37427).
(b)	Incorporated by reference to the Exhibit filed with our Quarterly Report on Form 10-Q filed on August 8, 2019 (File No. 001-37427).

* Certain exhibits and schedules are omitted pursuant to Item 601(a)(5) of Regulation S-K, and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		HORIZON GLOBAL CORPORATION (Registrant)
			/s/ DENNIS E. RICHARDVILLE
Date:	November 4, 2021	By:	Dennis E. Richardville Chief Financial Officer

53

EX-10.1

Exhibit 10.1

FIFTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT

This Fifth Amendment to Loan and Security Agreement (this “Fifth Amendment”) is made this 17th day of September, 2021, by and among HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“Horizon Americas”), CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario (“Cequent Canada”; together with Horizon Americas, each a “Borrower” and collectively the “Borrowers”), HORIZON GLOBAL CORPORATION, a Delaware corporation (“Parent”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“Horizon Global”) CEQUENT ELECTRICAL PRODUCTS DE MÉXICO, S. de R.L. de C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Electrical MX”), CEQUENT SALES COMPANY DE MÉXICO, S. de R.L. de C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Sales MX”,and together with Parent, Horizon Global and Cequent Electrical MX, each a “Guarantor” and collectively the “Guarantors”; the Borrowers and Guarantors are referred to herein as, collectively, jointly and severally, the “Loan Parties” and each a “Loan Party”), the Lenders party hereto and ECLIPSE BUSINESS CAPITAL LLC (f/k/a Encina Business Credit, LLC), as agent for the Lenders (in such capacity, the “Agent”).

BACKGROUND

A.The Loan Parties, Lenders and the Agent entered into that certain Loan and Security Agreement dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto.The Loan Agreement, as in effect immediately prior to the date hereof, and all other Loan Documents executed in connection therewith prior to the date hereof are collectively referred to as the “Existing Financing Agreements”.

B.The Loan Parties have informed the Agent that the Loan Parties desire to make certain modifications to the Loan Agreement, and, subject to the terms and conditions of this Fifth Amendment, the Lenders and the Agent have agreed to amend certain provisions of the Loan Agreement as set forth herein.

NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made a part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:

1.Defined Terms.Capitalized terms used herein but not otherwise defined herein shall have the meanings attributed thereto in the Loan Agreement, as amended by this Fifth Amendment.

2.Amendments to Loan Agreement. Subject to the satisfaction (or waiver) of the conditions precedent specified in Section 4 below: (a) the Loan Agreement (including the Annexes attached thereto) is hereby amended in its entirety to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the changed pages to the conformed Loan Agreement attached as Annex I hereto;

10176272v2

(a)Exhibit H to the Loan Agreement, the Form of Borrowing Base Certificate, is hereby amended be deleting said exhibit in its entirety and replacing it with the corresponding exhibit set forth in Annex II attached hereto; and

(b)References in a Loan Document to “Encina Business Credit, LLC” will be deemed to refer to “Eclipse Business Capital LLC (f/k/a Encina Business Credit, LLC)” and references in a Loan Document to “Encina Business Credit SPV, LLC” will be deemed to refer to “Eclipse Business Capital SPV, LLC (f/k/a Encina Business Credit SPV, LLC)”.

3.Representations and Warranties.Each Loan Party hereby:

(a)after giving effect to this Fifth Amendment, reaffirms all representations and warranties made to the Lenders and the Agent under the Loan Agreement and all of the other Existing Financing Agreements and represents and warrants that after giving effect to this Fifth Amendment and the transactions contemplated hereby all such representations and warranties are true and correct in all material respects (unless otherwise qualified by materiality or the occurrence of a Material Adverse Effect, in which case such representation and warranty is true and correct in all respects) on and as of the date hereof (or, to the extent any representations or warranties are expressly made solely as of an earlier date, such representations and warranties are true and correct as of such earlier date);

(b)as of the date hereof, reaffirms all covenants contained in the Loan Agreement (as amended hereby) and all of the other Existing Financing Agreements and covenants to comply with all such covenants until the Termination Date; and

(c)as of the date hereof, represents and warrants that:

(i)no Default or Event of Default has occurred and is continuing under the Loan Agreement or any of the other Existing Financing Agreements;

(ii)such Loan Party has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Fifth Amendment;

(iii)the execution, delivery and performance by such Loan Party of this Fifth Amendment have been duly and validly authorized and do not violate such Loan Party's Governing Documents or any law or any material agreement or instrument (including, without limitation, the Term Loan Agreement) or any court order which is binding upon such Loan Party or its property, do not constitute grounds for acceleration of any Indebtedness or obligation under any material agreement or instrument which is binding upon such Loan Party or its property, and do not require the consent of any Person (including, without limitation, the Term Loan Agent);

(iv)this Fifth Amendment has been duly executed and delivered by, and is enforceable against, each of the Loan Parties party hereto, in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles; and

(v)no Loan Party is required to obtain any government approval, consent, or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the execution, delivery or performance of this Fifth Amendment.

4.Conditions Precedent. This Fifth Amendment shall become effective on the date on which the following conditions have been fulfilled to the satisfaction of the Agent (the “Fifth Amendment Effective Date”):

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(a)each of the following documents shall be duly executed by all parties thereto and delivered to the Agent, in form and substance satisfactory to the Agent, and each such document shall be in full force and effect:

(i)this Fifth Amendment;

(ii)an amended and restated Revolving Note in favor of the Lender; and

(iii)the Amendment Fee Letter.

(b)the Borrowers shall have paid to the Agent all fees due on the Fifth Amendment Effective Date and shall have paid or reimbursed Agent for all of Agent's costs, charges and expenses incurred through the Fifth Amendment Effective Date for which invoices have been presented to the Loan Parties prior to the date hereof payable to the extent required by Section 15.7 of the Loan Agreement (including, without limitation, reasonable and documented attorneys’ fees and expenses incurred in connection with the preparation, negotiation and execution of this Fifth Amendment and the documents provided for herein or related hereto); and

(c)after giving effect to this Fifth Amendment, all representations and warranties contained in Section 3 above shall be true and correct in all respects.

5.Further Assurances. Each Loan Party hereby agrees to take all such actions and to execute and/or deliver to the Agent all such documents, assignments, financing statements and other documents, as the Agent may reasonably require from time to time, to effectuate and implement the purposes of this Fifth Amendment.

6.Reaffirmation of Loan Documents; No Novation. Each Loan Party, as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such Loan Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party and (ii) to the extent such Loan Party granted liens on or security interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed any Obligations, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of such Obligations as amended hereby. Each Loan Party hereby consents to this Fifth Amendment and acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and reaffirmed.The execution of this Fifth Amendment shall not serve to effect a novation of any Indebtedness under the Loan Documents or any other Obligations.

7.No Modification. Except as expressly set forth herein, nothing contained in this Fifth Amendment shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any other Loan Document or constitute a course of conduct or dealing among the parties.Except as expressly stated herein, the Agent reserves all rights, privileges and remedies under the Loan Documents. Except as amended or consented to hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect.All references in the Loan Documents to the Loan Agreement shall be deemed to be references to the Loan Agreement as modified hereby.

8.Release of Claims. In consideration of the Agent’s and Lenders’ agreements contained in this Fifth Amendment, each Loan Party hereby irrevocably releases and forever discharges the Agent, Lenders and their respective affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and from any and all claims, suits, actions, investigations or proceedings, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Loan Party ever had or now has against the Agent, any Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of the Agent or any other Released Person relating to the Loan Agreement or any other Loan Document on or prior to the date hereof.

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9.Miscellaneous.

(a)Headings; Construction. Section and subsection headings are used in this Fifth Amendment only for convenience and do not affect the meanings of the provisions that they precede.

(b)Modifications. No modification hereof or of any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.

(c)Governing Law; Loan Document. THIS FIFTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. FURTHER, THE LAW OF THE STATE OF NEW YORK SHALL APPLY TO ALL DISPUTES OR CONTROVERSIES ARISING OUT OF OR CONNECTED TO OR WITH THIS Fifth AMENDMENT WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. This Fifth Amendment is a Loan Document and is subject to and has the benefit of all the provisions in the Loan Agreement applicable to Loan Documents.

(d)Counterparts; Fax/Email Signatures. This Fifth Amendment may be executed in any number of counterparts, all of which shall constitute one and the same agreement.This Fifth Amendment may be executed by signatures delivered by facsimile or electronic mail, each of which shall be fully binding on the signing party.

[Signature Pages Follow]

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IN WITNESS WHEREOF,the parties have caused this Fifth Amendment to be executed and delivered by their duly authorized officers as of the date first above written.

HORIZON GLOBAL AMERICAS INC.,

as a Borrower

By: /s/ Jay Goldbaum                

Name: Jay Goldbaum

Title: Vice President and Secretary

CEQUENT TOWING PRODUCTS OF CANADA LTD., as a Borrower

By: /s/ Jay Goldbaum                

Name: Jay Goldbaum

Title: Vice President and Secretary    

HORIZON GLOBAL CORPORATION,

as a Guarantor

By: /s/ Jay Goldbaum                

Name: Jay Goldbaum

Title: Vice President and Secretary

HORIZON GLOBAL COMPANY LLC,

as a Guarantor

By: /s/ Jay Goldbaum                

Name: Jay Goldbaum

Title: Vice President and Secretary    

CEQUENT ELECTRICAL PRODUCTS DE MÉXICO, S. DE R.L. DE C.V., as a Guarantor

By: /s/ Jay Goldbaum                

Name:     Jay Goldbaum

Title:     Legal Representative

CEQUENT SALES COMPANY DE MÉXICO, S. DE R.L. DE C.V., as a Guarantor

By: /s/ Jay Goldbaum                

Name:     Jay Goldbaum

Title:     Legal Representative

[Signature Page to Fifth Amendment to Loan and Security Agreement]

ECLIPSE BUSINESS CAPITAL, LLC, as Agent

By: /s/ Brian Hynds

Name:    Brian Hynds

Title:    Authorized Signatory

ECLIPSE BUSINESS CAPITAL SPV, LLC,

as a Lender

By: /s/ Brian Hynds

Name:    Brian Hynds

Title:    Authorized Signatory    

[Signature Page to Fifth Amendment to Loan and Security Agreement]

Annex I

Conformed Loan Agreement

(changed pages only)

See attached.

Conformed through FourthFifthAmendment - Final

LOAN AND SECURITY AGREEMENT

Dated as of March 13, 2020 by and among

HORIZON GLOBAL AMERICAS INC. AND

CEQUENT TOWING PRODUCTS OF CANADA, LTD.,

any other Borrower party hereto from time to time, as Borrowers,

HORIZON GLOBAL CORPORATION AND HORIZON GLOBAL COMPANY LLC

any other Guarantor party hereto from time to time, as Guarantors,

any other Loan Party party hereto from time to time, as Loan Parties,

the Lenders from time to time party hereto, and

ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC,

as Agent

100176250V4 10447624V5

Loan and Security Agreement

This Loan and Security Agreement (as it may be amended, restated, supplemented or otherwise modified from time to time, this "Agreement") is entered into on March 13, 2020, by and among HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“Horizon Americas”), CEQUENT TOWING PRODUCTS OF CANADA, LTD., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and together with any other Borrower party hereto from time to time, collectively the "Borrowers"), HORIZON GLOBAL CORPORATION, a Delaware corporation (“Parent”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“Horizon Global”) CEQUENT ELECTRICAL PRODUCTS DE MÉXICO, S. DE R.L. DE C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Electrical MX”), CEQUENT SALES COMPANY DE MÉXICO, S. DE R.L. DE C.V., a Mexican limited liability company (sociedad de responsabilidad limitada de capital variable) (“Cequent Sales MX”, and together with Parent, Horizon Global and Cequent Electrical MX, each a “Guarantor” and together with any other Guarantor party hereto from time to time, collectively the “Guarantors”) and together with any other Loan Party party hereto from time to time, as Loan Parties (as defined herein), the Lenders party hereto from time to time and ENCINA ECLIPSE BUSINESS CREDITCAPITAL LLC (f/k/a Encina Business Credit, LLC), as agent for the Lenders (in such capacity, "Agent"). The Annexes, Exhibits and Schedules to this Agreement, as well as the Perfection Certificate attached to this Agreement, are an integral part of this Agreement and are incorporated herein by reference.

1.DEFINITIONS.

1.1        Certain Defined Terms.

Unless otherwise defined herein, the following terms are used herein as defined in the UCC from time to time: Accounts, Account Debtor, As-Extracted Collateral, Certificated Security, Chattel Paper, Commercial Tort Claims, Debtor, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Financing Statement, Fixtures, General Intangibles, Goods, Health-Care-Insurance Receivables, Instruments, Inventory, Letter-of-Credit Rights, Money, Payment Intangible, Proceeds, Secured Party, Securities Accounts, Security Agreement, Supporting Obligations and Tangible Chattel Paper; provided, however, that (a) as such terms relate to any Collateral of any Canadian Borrower, such terms shall refer to such Collateral as defined in the PPSA, to the extent applicable and (b) as such terms relate to any such Collateral encumbered by or to be encumbered by a Mexican Security Document, such terms shall have the meanings assigned to them in such Mexican Security Document, to the extent applicable.

As used in this Agreement, the following terms have the following meanings:

“ABL Priority Collateral” means as defined in the Intercreditor Agreement (it being understood and agreed that any time the Term Loan Debt is not in effect, the term “ABL Priority Collateral” shall mean all Collateral).

"ABLSoft" means the electronic and/or internet-based system approved by Agent for the purpose of making notices, requests, deliveries, communications and for the other purposes contemplated in this Agreement or otherwise approved by Agent, whether such system is owned, operated or hosted by Agent, any of its Affiliates or any other Person.

1

10176250v410447624v5

communication, information, document or other material that Agent specifically instructs a Person to deliver in physical form.

"Approved Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business, in each case that is administered, managed, advised or underwritten by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"Assignee" has the meaning set forth in Section 15.9(a).

"Assignment and Assumption" means an assignment and assumption agreement substantially in the form of Exhibit G.

"Assignment of Claims Act", means the Assignment of Claims Act of 1940, as amended, currently codified at 31 U.S.C. 3727 and 41 U.S.C. 6305, and includes the prior historically referenced Federal Anti-Claims Act (31 U.S.C. 3727) and the Federal Anti-Assignment Act (41

U.S.C. 6305).

"Authorized Officer" means, as to any Loan Party, the principal executive officer, principal financial officer or the principal accounting officer.

“Availability Amount” means, as of any date of determination, an amount equal to the lesser of (i) the Maximum Revolving Facility Amount and (ii) the Borrowing Base.

"Availability Block" means the amount set forth in Section 1(f) of Annex I hereto.

"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. § 101 et seq.).

"Base Rate" means, for any day, the greatest of (a) the Federal Funds Rate plus %, (b) the LIBOR Rate (which rate shall be calculated based upon a one (1) month period and shall be determined on a daily basis), (c) one percent (1.0%), and (d) the rate of interest announced, from time to time, within Wells Fargo Bank, N.A. at its principal office in San Francisco as its "prime rate", with the understanding that the "prime rate" is one of Wells Fargo Bank, N.A.’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo Bank, N.A. may designate (or, if such rate ceases to be so published, as quoted from such other generally available and recognizable source as Agent may select).

"Base Rate Loan" means any Loan which bears interest at or by reference to the Base Rate.

“Benchmark” means, initially, USD LIBOR; provided that if a Benchmark Transition Event, a Term SOFR Transition Event, or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.6(e).

“Benchmark Replacement” means,

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(a)with respect to any Benchmark Transition Event or Early Opt-in Election, the first alternative set forth in the order below that can be determined by Agent for the applicable Benchmark Replacement Date:

(i)the sum of: (A) Term SOFR and (B) the related Benchmark Replacement Adjustment;

(ii)the sum of: (A) SOFR Average and (B) the related Benchmark Replacement Adjustment;

(iii)the sum of: (A) the alternate benchmark rate that has been selected by Agent and Borrower Representative as the replacement for the then-current Benchmark giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time and (B) the related Benchmark Replacement Adjustment; or

(b)with respect to any Term SOFR Transition Event, the sum of (i) Term SOFR and (ii) the related Benchmark Replacement Adjustment;

provided, that, (x) in the case of clause (a)(i), if Agent decides that Term SOFR is not administratively feasible for Agent, then Term SOFR will be deemed unable to be determined for purposes of this definition and (y) in the case of clause (a)(i) or clause (b) of this definition, the applicable Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by Agent in its Permitted Discretion. If the Benchmark Replacement as determined pursuant to clause (a)(i), (a)(ii) or (a)(iii) or clause (b) of this definition would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of the Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any setting of such Unadjusted Benchmark Replacement:

(a)for purposes of clauses (a)(i), (a)(ii), and (b) of the definition of “Benchmark Replacement,” an amount equal to 0.11448% (11.448 basis points), and

(b)for purposes of clause (a)(iii) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero) that has been selected by Agent and Borrower Representative giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to

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the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment notices, length of lookback periods, and other technical, administrative or operational matters) that Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively feasible or if Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Agent decides is reasonably necessary in connection with the administration of the Agreement and the other Loan Documents).

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:

(a)in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof);

(b)in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein;

(c)in the case of a Term SOFR Transition Event, the date that is thirty (30) days after Agent has provided the Term SOFR Notice to the Lenders and Borrower pursuant to Section 3.6(e)(i) (B); or

(d)in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as Agent has not received, by 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

(a)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof);

(b)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority

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with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof); or

(c)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such Benchmark (or such component thereof) is no longer representative.

“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (a) or (b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.6(e) and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.6(e).

"Blocked Account" has the meaning set forth in Section 6.1.

"Borrower" and "Borrowers" has the meaning set forth in the preamble to this

Agreement.

“Borrower Representative” means Horizon Americas, in such capacity pursuant to

the provisions of Section 2.9, or any permitted successor Borrower Representative selected by Borrowers and approved by Agent.

"Borrowing Base" means, as of any date of determination, the Dollar Equivalent Amount as of such date of determination of the sum of the following:

(a)the aggregate amount of Eligible Accounts of Non-Investment Grade Account Debtors multiplied by the applicable Accounts Advance Rate, plus

(b)the aggregate amount of Eligible Accounts of Investment Grade Account Debtors multiplied by the applicable Accounts Advance Rate, plus

(c)the lesser of:

(i)the aggregate of:

(A)the lower of (i) the aggregate amount of Eligible Inventory (excluding Eligible Mexican Inventory and excluding Eligible In-Transit Inventory), valued at the lower of cost and net realizable value (determined on a FIFO basis), multiplied by the applicable Inventory Advance Rate(s) and (ii) NOLV of Eligible Inventory (excluding Eligible Mexican Inventory and excluding Eligible In-Transit Inventory) multiplied by the applicable Inventory Advance Rate(s), plus

(B)the lesser of

(1)the lower of (i) the aggregate amount of Eligible Mexican Inventory, valued at the lower of cost and net realizable value (determined on a FIFO basis), multiplied by the applicable Inventory Advance

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"Dollar Equivalent Amount" means, at any time, (a) as to any amount denominated in Dollars, the amount hereof at such time, and (b) as to any amount denominated in a currency other than Dollars, the equivalent amount in Dollars as determined by Agent at such time that such amount could be converted into Dollars by Agent according to prevailing exchange rates selected by Agent.

"Dollars" or "$" means United States Dollars.

“Dominion Threshold Amount” mean, at any time of determination, an amount equal to the greater of: (a) fifteen percent (15%) of the Availability Amount and (b) $10,000,000.

“Dominion Triggering Period” means the period (a) commencing (i) if any report delivered pursuant to Sections I or II of Annex II hereto reflects that Excess Availability is less than the Dominion Threshold Amount, on the date that is three (3) Business Days thereafter, unless, during such three (3) Business Day period, Excess Availability has been at or above the Dominion Threshold Amount and (ii) at all other times on the date on which Excess Availability is less than the Dominion Threshold Amount for a period of two (2) consecutive Business Days and (b) ending on the date on which (i) no Event of Default exists and (ii) Excess Availability is greater than or equal to the Dominion Threshold Amount for a period of twenty (20) consecutive calendar days.

"E-Signature" means the process of attaching to or logically associating with an Approved Electronic Communication an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Approved Electronic Communication) with the intent to sign, authenticate or accept such Approved Electronic Communication.

“Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the occurrence of:

(a)a notification by Agent to (or the request by the Borrower Representative to Agent to notify) each of the other parties hereto that at least five currently outstanding Dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

(b)the joint election by Agent and Borrower Representative to trigger a fallback from USD LIBOR and the provision by Agent of written notice of such election to the Lenders.

"Early Termination Fee" has the meaning set forth in Section 3.2(e).

"EBITDA" means, for the applicable period, for the Parent and its Subsidiaries, solely to the extent included in the “North American” and “Corporate” portions of Parent’s consolidated financial statements (“EBITDA Parties”) on a consolidated basis, the sum of (a) Net Income, plus (b) Interest Expense deducted in the calculation of such Net Income, plus (c) taxes on income, whether paid, payable or accrued, deducted in the calculation of such Net Income, plus (d) depreciation expense deducted in the calculation of such Net Income, plus (e) amortization expense deducted in the calculation of such Net Income, plus (f) any other non-cash charges that have been deducted in the calculation of such Net Income, plus (g) any cash transfers by any Subsidiary of Parent that is not a Loan Party to any Loan Party plus (h) [reserved], plus (i) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, plus (j) all losses during such period that relate to the retirement of Indebtedness, plus (k) fees, costs and expenses in connection with the transactions contemplated by

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this Agreement and any other financing transaction consummated during such period, plus (l) fees and expenses in connection with the issuance or offering of Equity Interests or any Indebtedness (in each case, whether or not consummated); provided that the aggregate amount added to EBITDA pursuant to this clause (l), together with clauses (m), (o) and (q) shall not exceed $8,000,000 for all periods, plus (m) costs and expenses of professional fees of the Borrowers or of any Agent or Lender to the extent the Borrowers are required to reimburse such Agent or Lender therefor); provided that the aggregate amount added to EBITDA pursuant to this clause (m), together with clauses (l), (o) and (q) shall not exceed $8,000,000 for all periods, plus (n) unusual or nonrecurring expenses or costs, including restructuring, moving and severance expense, provided that the aggregate amount added to EBITDA pursuant to this clause (n) shall not exceed $10,000,000 in any four Fiscal Quarter period, plus (o) fees, costs and expenses incurred in connection with any proposed asset sale (whether or not consummated); provided that the aggregate amount added to EBITDA pursuant to this clause (o), together with clauses (l), (m) and (q) shall not exceed $8,000,000 for all periods, plus (p) non-cash losses on asset sales; and plus (q) any fees, costs and expenses in connection with the maintenance and/or forgiveness of the PPP Loan, provided that the aggregate amount added to EBITDA pursuant to this clause (q), together with clauses (l), (m) and (o) shall not exceed $8,000,000 for all periods. For purposes of calculating EBITDA, pro forma effect shall be given to any Significant Transaction. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“Regulation S-X”) minus (h) any other non-cash gains that have been added in the calculation of such Net Income.

"Eclipse" means Eclipse Business Capital LLC, a Delaware limited liability company.

"Eligible Account" means, at any time of determination and subject to the criteria below, an Account of a Borrower, which was generated and billed by a Borrower in the Ordinary Course of Business, and which Agent, in its Permitted Discretion, shall not deem not to be an Eligible Account. The net amount of an Eligible Account at any time shall be the face amount of such Eligible Account as originally billed minus all customer deposits, unapplied cash collections and other Proceeds of such Account received from or on behalf of the Account Debtor thereunder as of such date and any and all returns, rebates, discounts (which may, at Agent's option, be calculated on shortest terms), credits, allowances or excise taxes of any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with such Account at such time. Without limiting the generality of the foregoing, the following Accounts shall not be Eligible Accounts:

(i) the Account Debtor or any of its Affiliates is a Loan Party or an Affiliate of any Loan Party;

(ii) (A) for Account Debtors other than Specified Account Debtors it remains unpaid longer than the earlier to occur of (1) the number of days after the original invoice date set forth in Section 4(a) of Annex I or (2) the number of days after the original invoice due date set forth in Section 4(c) of Annex I or (B) for Specified Account Debtors it remains unpaid longer than the earlier to occur of (1) the number of days after the original invoice date set forth in Section 4(b) of Annex I or (2) the number of days after the original invoice due date set forth in Section 4(c) of Annex I;

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(xxvi)it does not conform in all respects to any covenants, warranties and representations set forth in this Agreement and each other LoanDocument;

(xxvii)it is not at all times subject to Agent's duly perfected, first priority security interest and no other Lien (other than a Permitted Lien specified in clause (l) of the definition thereof that is not prior to the Lien ofAgent);

(xxviii)it is purchased or manufactured pursuant to a license agreement that is not assignable to each of Agent and itstransferees;

(xxix)it is situated at a Collateral location not listed in Schedule 3 of the Perfection Certificate or other location of which Agent has been notified as required by Section 7.8 (or it is in-transit other than in transit between a Borrower’sfacilities);

(xxx)it is located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Reserve has been established byAgent;

(xxxi)it is located outside of the continental United States or Canada;or

(xxxii)is not reflected in the details of a current perpetual inventoryreport.

"Eligible Mexican Inventory" means Inventory owned by Horizon Americas and located in Mexico at the Maquiladora Location that would be Eligible Inventory if (a) it were not located outside of the continental United States or Canada and (b) from the Closing Date through the date that is ninety (90) days following the Closing Date, it is not subject to Agent's duly perfected, first priority security interest, but Borrower Representative is working in good faith with Agent to cause Agent’s security interest in such Inventory to become properly perfected.

"Encina" means Encina Business Credit, LLC, a Delaware limited liability company.

"Enforcement Action"meansanyactiontoenforceanyObligationsor Loan

Documents or to exercise any rights or remedies relating to any Collateral, whether by judicial action, self-help, notification of Account Debtors, setoff or recoupment,creditbid,deedin lieu of foreclosure, action in any proceeding seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, concurso mercantil, insolvency or other similar applicable law orotherwise.

“Equity Interest” shares ofcapitalstock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire suchinterests.

"ERISA" means the Employee Retirement Income Security Act of 1974 and all rules, regulations and orders promulgatedthereunder.

"ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with a Loan Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) ofthe Code forpurposes ofprovisions relating to Section 412 ofthe Code and Section 302 of ERISA).

"ERISA Event" means: (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of

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more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty orconventionamongGovernmentalAuthoritiesandimplementingsuchSectionsoftheCode.

“FCA” has the meaning assigned thereto in Section 1.6.

“Fee Letter” means that certain fee letter, dated the Closing Date, among the BorrowersandtheAgent, as amended, restated, supplemented or otherwise modified from time totime.

“Fifth Amendment Effective Date” means September 17, 2021.

"FIRREA" means the FinancialInstitutions Reform, Recovery and EnforcementActof 1989, asamended.

"Fiscal Year" means the fiscal year of Borrowers which ends on December 31 of each year.

"Fixed Charge Coverage Ratio" means, for the period in question, the ratio of (a)

EBITDA minus unfinanced Capital Expenditures of the Financial Covenant Parties on a consolidated basis for such period, to (b) Fixed Charges for suchperiod.

"Fixed Charges" means, for the period in question, on a consolidated basis, the sum of (a) all principal payments scheduled to be made during or with respect to such period in cash in respectof Indebtedness of the Financial Covenant Parties, plus (b) all Interest Expense of the Financial Covenant Parties for such period paid in cashattributable to such period, plus (c) all taxes of the FinancialCovenant Parties paid in cash for such period and plus (d) all cash distributions (including Permitted Tax Distributions, if applicable), dividends, redemptions and other cash payments made with respect to equity securities or subordinated debt issued by the Financial Covenant Parties, minus (e) all cash investments made in cash by any Loan Party to any Subsidiary of Parent that is not a Loan Party to the extent permitted under clauses (b) and (c) of the definition of PermittedInvestment.

“Floor” means 1.00%.

"Foreign Subsidiary" means any Subsidiary that is not a Loan Party organized or incorporated under the laws of a jurisdiction of the United States, any State thereof, or the District of Columbia or Canada.

"FRB" means the Board of Governors of the Federal Reserve System or any successor thereto.

"Funding Account" has the meaning set forth in Section2.3(b).

"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the FinancialAccountingStandards Board (or agencies with similar functions of comparable stature and authority within the United States accounting profession) which are applicable to the circumstances as of the date of determination, in each case consistentlyapplied.

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"Governing Documents" means, with respect to any Person, the certificate of incorporation, articles of incorporation, certificate of formation, certificate of limited partnership, by-laws, operating agreement, limited liability company agreement, limited partnership agreement or other similar governance document of such Person.

"Governmental Authority" means the government of the United States of America, Canada, Mexico or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and having jurisdiction over this account.

“Guarantor” and “Guarantors” has the meaning set forth in the preamble to this Agreement.

"Guaranty" or "Guaranteed", as applied to any Indebtedness, liability or other obligation, means (a) a guaranty, directly or indirectly, in any manner, including by way of endorsement (other than endorsements of negotiable instruments for collection in the Ordinary Course of Business), of any part or all of such Indebtedness, liability or obligation and (b) an agreement, contingent or otherwise, and whether or not constituting a guaranty, assuring, or intended to assure, the payment or performance (or payment of damages in the event of non-performance) of any part or all of such Indebtedness, liability or obligation by any means (including the purchase of securities or obligations, the purchase or sale of property or services or the supplying of funds).

“Guarantor Payment” has the meaning set forth in Section 2.12(f)(i).

“Hedging Agreement” any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Horizon Americas” has the meaning set forth in the preamble to this Agreement.

“Horizon Global” has the meaning set forth in the preamble to this Agreement.

“IBA” has the meaning assigned thereto in Section 1.6.

"Indebtedness" means of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business and not more than ninety (90) days past due), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capitalized Lease obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) solely for purposes of Section 8.04 hereof, any and all payment obligations of such Person under or Guarantee by such Person with respect to any Hedging Agreement. The Indebtedness of any Person shall include the Indebtedness of any other

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such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption. Unless the context expressly provides otherwise, "Lender" shall include the Swingline Lender.

"Letter of Credit" has the meaning set forth in Section 2.1(a).

"Letter of Credit Balance" means the sum of (a) the aggregate undrawn face amount of all outstanding Letters of Credit and (b) all interest, fees and costs due in connection therewith.

"Letter of Credit Limit" means the amount set forth in Section 1(c) of Annex I.

"LIBOR Loan" means any Loan which bears interest at a rate determined by reference to the LIBOR Rate.

"LIBOR Rate" means, for any calendar month, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest 1/100 of 1%) that is the greater of (a) the Floor or (b) the rate per annum, as published by ICE Benchmark Administration Limited (or any successor page or other commercially available source as Agent may designate from time to time), for deposits in Dollars, for a one-month period, that appears on Bloomberg Screen US0001M (or the successor thereto) as the London interbank offered rate for deposits in Dollars as as of 11:00 a.m., London time, as of two Business Days prior to the first daycommencement of such calendar month (and, in no event shall the LIBOR Rate if any such published rate is below zero, then the rate determined pursuant to this clause (b) shall be less than 1.00%), which deemed to be zero). Each determination of the LIBOR Rate shall be made by Agent and shall be conclusive in the absence of manifest error. For the sake of clarity, the LIBOR Rate shall be adjusted monthly on the first day of each month.

"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest or other security arrangement and any other preference, priority, or preferential arrangement in the nature of a security interest of any kind or nature whatsoever, including any conditional sale contract or other title-retention agreement, the interest of a lessor under a Capitalized Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

“Lien Waiver” means documents in substantially the form provided by Agent to Borrower Representative prior to the Closing Date and each other landlord waiver, bailee letter, or acknowledgement agreement of any lessor, mortgagee, warehouseman, processor, shipper, customs broker, freight forwarder, repairman, mechanic, bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Obligor’s books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.

"Loan Account" has the meaning set forth in Section 3.4.

"Loan Documents" means, collectively, this Agreement (including the Perfection Certificate(s) and all other attachments, annexes and exhibits hereto) and all notes, guaranties, security agreements, mortgages, Borrowing Base Certificates, Compliance Certificates, other certificates, pledge agreements, landlord's agreements, Lock Box and Blocked Account agreements, the Canadian Security Documents, the Mexican Security Documents, the Intercreditor Agreement, the Subordinated Debt Subordination Agreement, the Fee Letter, and all other agreements, documents and instruments now or hereafter executed or delivered by any Borrower or any Loan Party in connection with, or to evidence the transactions contemplated by, this Agreement.

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“PPP Waiver” means the Limited Waiver and Consent to Loan and Security Agreement, dated as of May 15, 2020, and effective as of April 18, 2020, among the Loan Parties and the Agent.

"PPSA" means, the Personal Property Security Act (Ontario), as amended from time to time (or any successor statute) and the regulations thereunder; provided, however if validity, perfection and effect of perfection and non-perfection and opposability of Agent’s security interest in and Lien on any Collateral located in Canada (or any province thereof) are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

“Pro Rata Share" means with respect to all matters relating to any Lender the percentage obtained by dividing (i) the Commitment of that Lender by (ii) the aggregate Commitments of all Lenders, in each case as any such percentages may be adjusted by assignments pursuant to an Assignment and Assumption.

"Protective Advances" has the meaning set forth in Section 2.2(a).

"Recipient" means any Agent, any Lender, any Participant, or any other recipient of any payment to be made by or on account of any Obligation of any Loan Party under this Agreement or any other Loan Document, as applicable.

“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is two (2) London Banking Days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR, the time determined by Agent in its Permitted Discretion.

"Register" has the meaning set forth in Section 15.9(c).

"Released Parties" has the meaning set forth in Section 10.1.

“Relevant Governmental Body” means the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board or the Federal Reserve Bank of New York, or any successor thereto.

“Relevant Percentage” has the meaning set forth in Section 12.10.

"Replacement Lender" has the meaning set forth in Section 3(c).

“Rent and Charges Reserve” means the aggregate of (a) all past due rent and other amounts owing by a. Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any ABL Priority Collateral or could assert a Lien on any ABL Priority Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been waived.

“Required Conditions” means, on any applicable date of determination with respect to any proposed transaction(s) as to which satisfaction of such Required Conditions is a requirement

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under this Agreement: (i) no Event of Default shall exist or shall have occurred and be continuing on such date, or would occur after giving effect to or as a result of such proposed transaction(s), and (ii) each of the following shall be satisfied: (A) Borrowers’ Excess Availability for the 30 days preceding such transaction or payment and on the proposed date of such proposed transaction or payment shall be greater than ten percent (10%) of the Maximum Revolving Facility Amount as in effect on the proposed date of such proposed transactions, and (B) the Fixed Charge Coverage Ratio of the Borrowers (as evidenced by a pro forma Compliance Certificate delivered to Agent) is greater than or equal to 1.10 to 1.00 for the trailing twelve month fiscal measurement period ended as of the last day of the most recently completed fiscal quarter for which financial statements have been delivered to Agent as required by Section 7.15(b)(ii) both (x) on an actual basis and (y) on a pro-forma basis for the same fiscal measurement period after giving effect to such proposed transactions(s) (including payment of any applicable fees (including fees payable hereunder), costs, and expenses) and to the funding of any Revolving Loans to be requested to fund any part of such proposed transaction(s) (including any such fees, costs, and expenses).

"Required Lenders" means at any time Lenders (other than Defaulting Lenders) then holding at least fifty-one (51%) percent of the sum of the aggregate Loan Commitment then in effect; provided, that if there are two or more Lenders, then Required Lenders shall include at least two Lenders (Lenders that are Affiliates or Approved Funds of one another being considered as one Lender for purposes of this proviso).

“Rescindable Amount” means, any such payment Agent makes for the account of the Lenders as to which Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies: (1) the Borrowers have not in fact made such underlying payment; (2) Agent has made a payment in excess of the amount so paid by the Borrowers (whether or not then owed); or (3) Agent has for any reason otherwise erroneously made such payment.

"Reserves" has the meaning set forth in Section 2.1(b).

"Restricted Accounts" means Deposit Accounts (a) established and used (and at all times will be used) solely for the purpose of paying current payroll obligations of Loan Parties (and which do not (and will not at any time) contain any deposits other than those necessary to fund current payroll), in each case in the Ordinary Course of Business, (b) established and used solely for the purpose of holding proceeds of the PPP Loan (as defined in the PPP Waiver), or (c) maintained (and at all times will be maintained) solely in connection with an employee benefit plan, but solely to the extent that all funds on deposit therein are solely held for the benefit of, and owned by, employees (and will continue to be so held and owned) pursuant to such plan.

"Restricted Payment" means any payment, dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in Parent, any Loan Party or any Subsidiary, or any payment, dividend or other distribution (whether in cash, securities or other property), including any partial or full cash settlement of Convertible Notes, any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in any of Parent, any Loan Party or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in any of Company, any Loan Party or any Subsidiary.

"Revolving Loan Commitment" means (a) as to any Lender, the aggregate commitment of such Lender to make Revolving Loans as set forth in the Commitment Schedule or in the most recent Assignment and Assumption to which it is a party (as adjusted to reflect any assignments as permitted hereunder) and (b) as to all Lenders, the aggregate commitment of all

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Lenders to make Revolving Loans, which aggregate commitment shall be in an amount equal to the Maximum Revolving Facility Amount.

"Revolving Loans" has the meaning set forth in Section 2.1(a).

“RUG” means the Registro Único de Garantías Mobiliarias of Mexico.

"Sanctioned Country" means at any time, a country, region or territory which is itself the subject or target of any Sanctions (including, without limitation, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

"Sanctioned Person" means at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the Government of Canada, the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

"Sanctions" means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the Government of Canada, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

"Scheduled Maturity Date" means the date set forth in Section 6 of Annex I.

"Securities Act" means the Securities of Act of 1933, as amended.

"Settlement" has the meaning set forth in Section 2.4(c).

"Settlement Date" has the meaning set forth in Section 2.4(c).

“SOFR” means, with respect to any Business Day means a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“SOFR Average” means the compounded average of SOFR over a rolling calendar day period of thirty (30) days published by the Federal Reserve Bank of New York (or a successor administrator of the SOFR Average).

“Specified Account Debtors” means Advance Auto Parts, Affinia, AutoZone, Inc., AutoZone (MX), Carquest, Lowes Companies, Ozark Purchasing LLC, Pep Boys and Wal-Mart (and each of their respective Affiliates).

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“Specified Vendor Receivables Financing” the sale by the Parent and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales” pursuant to agreements listed in the Perfection Certificate on the Closing Date.

"Stated Rate" has the meaning set forth in Section 3.5.

"Subordinated Debt" means Indebtedness incurred by a Loan Party that is expressly subordinate and junior in right of payment to the payment in full of all Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) satisfactory to Agent.

"Subordinated Debt Documents" means any notes, loan agreements or other documents governing Subordinated Debt.

"Subordinated Debt Subordination Agreement" means any subordination agreement entered into by a holder of Subordinated Debt in favor of Agent and Lenders.

"Subsidiary" means any corporation or other entity of which a Person owns, directly or indirectly, through one or more intermediaries, more than 50% of the capital stock or other Equity Interest at the time of determination. Unless the context indicates otherwise, references to a Subsidiary shall be deemed to refer to a Subsidiary of Borrower.

"Swingline Lender" means EncinaEclipse Business CreditCapital SPV, LLC, in its capacity as lender of Swingline Loans hereunder.

"Swingline Loans" has the meaning set forth in Section 2.4(a).

"Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"Termination Date" means the date on which all of the Obligations have been paid in full in cash and all of Agent and Lenders' lending commitments under this Agreement and under each of the other Loan Documents have been terminated.

“Term Loan Agent” means Atlantic Park Strategic Capital Fund, L.P., in its capacity as agent for the lenders under the Term Loan Agreement, and its successors and assigns including under any replacement or refinancing with respect thereto.

“Term Loan Agreement” means that certain Credit Agreement dated as of February 2, 2021 among Term Loan Agent, the Term Loan Lenders, the Parent, and the other parties thereto, as amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time pursuant to the terms therein and as permitted by this Agreement and the Intercreditor Agreement.

“Term Loan DDL Proceeds Account” means a segregated DDA account that has been identified in writing to the Agent, and into which only proceeds of the Delayed Draw Term Loans (as defined in the Term Loan Agreement as in effect on February 2, 2021) shall be deposited, and into which no other funds are deposited or held.

“Term Loan Debt” means the Indebtedness and “Obligations” (as defined under the Term Loan Agreement) evidenced by the Term Loan Documents.

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“Term Loan Documents” means collectively (a) the Term Loan Agreement and (b) all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Term Loan Agent or the Term Loan Lenders in connection therewith.

“Term Loan Lenders” means the lenders party to the Term Loan Agreement.

“Term Loan Security Documents” means, collectively, the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), the Mortgages (as defined in the Term Loan Agreement) and all other security documents delivered to the Term Loan Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Obligor under the Term Loan Agreement or the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with terms therein and this Agreement and the Intercreditor Agreement.

“Term Priority Collateral” means the “Term Priority Collateral”, as defined in the Intercreditor Agreement.

"UCC" means, at any given time, the Uniform Commercial Code as adopted and in effect at such time in the State of New York or other applicable jurisdiction.

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“USD LIBOR” means the London interbank offered rate for Dollars with a tenor of one (1) month.

1.2Accounting Terms and Determinations.

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder (including determinations made pursuant to the exhibits hereto) shall be made, and all financial statements required to be delivered hereunder shall be prepared on a consolidated basis in accordance with GAAP consistently applied. If at any time any change in GAAP would affect the computation of any financial ratio or financial requirement set forth in any Loan Document, and either Borrower Representative or Agent shall so request, Required Lenders and Borrower Representative shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) Borrower Representative shall provide to Agent and Lenders financial statements and other documents required under this Agreement and the other Loan Documents which include a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (Codification of Accounting Standards 825-10) to value any Indebtedness or other liabilities of any Loan Party at "fair value", as defined therein.

Notwithstanding anything to the contrary contained in the paragraph above or the definitions of Capital Expenditures or Capitalized Leases, only those leases (assuming for purposes hereof that such leases were in existence on January 1, 2015) that would have constituted Capitalized Leases or financing leases in conformity with GAAP on January 1, 2015, shall be considered Capitalized Leases or financing leases hereunder, and all calculations and deliverables under this

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“agent” shall be deemed to include a “mandatary”, (k) “construction liens” shall be deemed to include “legal hypothecs”, (l) “joint and several” shall be deemed to include “solidary”, (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “servitude” shall be deemed to include “easement”, (p) “priority” shall be deemed to include “prior claim”, (q) “survey” shall be deemed to include “certificate of location and plan”, (r) “fee simple title” shall be deemed to include “absolute ownership”, and (s) “forclosure” shall be deemed to include the “exercise of a hypothecary right”. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only (except if another language is required under any applicable law) and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment que c’est leur volonté que cette convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en la langue anglaise seulement (sauf si une autre langue est requise en vertu d’une loi applicable).

1.5Interpretation (Mexico). For purposes of any Collateral located in Mexico or subject to any of the Mexican Security Documents (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of Mexico or a court or tribunal exercising jurisdiction in Mexico, (a) “Bienes Pignorados” shall be deemed to include the movable assets referred to in each definition under each Mexican Asset Pledge, (b) “security interest”, and “lien” shall be deemed to include a “prenda”, or “grávamen”, and (c) all references to filing, registering or recording under the Ley General de Títulos y Operaciones de Crédito of Mexico shall be deemed to include the RUG. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only (except if another language is required under any applicable law) and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only.

1.6Rates. The interest rate on LIBOR Loans and Base Rate Loans (when determined by reference to clause (b) of the definition of Base Rate) may be determined by reference to the LIBOR Rate, which is derived from the London interbank offered rate. The London interbank offered rate is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. On March 5, 2021, ICE Benchmark Administration (“IBA”), the administrator of the London interbank offered rate, and the Financial Conduct Authority (the “FCA”), the regulatory supervisor of IBA, announced in public statements (the “Announcements”) that the final publication or representativeness date for the London interbank offered rate for Dollars for: (a) 1-week and 2-month tenor settings will be December 31, 2021 and (b) overnight, 1-month, 3-month, 6-month and 12-month tenor settings will be June 30, 2023. No successor administrator for IBA was identified in such Announcements. As a result, it is possible that immediately after such dates, the London interbank offered rate for such tenors may no longer be available or may no longer be deemed a representative reference rate upon which to determine the interest rate on LIBOR Loans or Base Rate Loans (when determined by reference to clause (b) of the definition of Base Rate). There is no assurance that the dates set forth in the Announcements will not change or that IBA or the FCA will not take further action that could impact the availability, composition or characteristics of any London interbank offered rate. Public and private sector industry initiatives have been and continue, as of the date hereof, to be underway to implement new or alternative reference rates to be used in place of the London interbank offered rate. In the event that the London interbank offered rate or any other then-current Benchmark is no longer available or in certain other circumstances set forth in Section 3.6, such Section 3.6 provides a mechanism for determining an alternative rate of interest. Agent will notify Borrower Representative,

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pursuant to Section 3.6, of any change to the reference rate upon which the interest rate on LIBOR Loans and Base Rate Loans (when determined by reference to clause (b) of the definition of Base Rate) is based. However, Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, (i) the administration of, submission of, calculation of or any other matter related to the London interbank offered rate or other rates in the definition of “LIBOR Rate” or with respect to any alternative, successor, or replacement rate thereto (including any then-current Benchmark or any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement), as it may or may not be adjusted pursuant to Section 3.6, will be similar to, or produce the same value or economic equivalence of, the LIBOR Rate or any other Benchmark, or have the same volume or liquidity as did the London interbank offered rate or any other Benchmark prior to its discontinuance or unavailability, or (ii) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. Agent and its Affiliates or other related entities may engage in transactions that affect the calculation of a Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to Borrowers and Loan Parties. Agent may select information sources or services in its discretion to ascertain any Benchmark, any component definition thereof or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to any Borrower, Loan Party, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

2.LOANS.

2.1Amount of Loans.

(a)Revolving Loans. Subject to the terms and conditions of this Agreement, each Lender with a Revolving Loan Commitment will severally (and not jointly), from time to time prior to the Maturity Date, at Borrower Representative's request, (i) make revolving loans to Borrowers ("Revolving Loans") and (ii) make letters of credit ("Letters of Credit") available to Borrowers in U.S. Dollars; provided, that after giving effect to each such Revolving Loan and Letter of Credit, the sum of the outstanding balance of all Revolving Loans (plus fees and expenses which are due and payable by Borrowers under this Agreement which have not been paid or charged to the Loan Account) and the Letter of Credit Balance will not exceed the lesser of (x) the Maximum Revolving Facility Amount minus the amount of Reserves established against the Maximum Revolving Facility Amount and (y) the Borrowing Base. All Revolving Loans shall be made in and repayable in Dollar. No Lender shall hold or fund any Loan or Letter of Credit hereunder with “plan assets” as such term is defined by Section 3(42) of ERISA.

(b)Reserves. Agent may, from time to time establish and revise reserves against the Borrowing Base and the Maximum Revolving Facility Amount in such amounts and of such types as Agent deems appropriate in its Permitted Discretion ("Reserves") to reflect (i) Rent and Charges Reserves, (ii) events, conditions, contingencies or risks which affect (A) the Collateral or its value, or the enforceability, perfection or priority of the security interests and other rights of Agent in the Collateral or

(B) the assets or business of any Borrower or any other Loan Party (including the Dilution Reserve), (iii) Agent's good faith concern that any Collateral report or financial information furnished by or on behalf of any Borrower or any other Loan Party to Agent is or may have been incomplete, inaccurate or misleading in any material respect, (iv) any fact or circumstance which Agent determines in its Permitted Discretion constitutes, or could constitute, an Event of Default, (v) past due Taxes which could result in a Lien attaching to any of the Collateral, (vi) as to ABL Priority Collateral subject to the laws of Canada, for

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amounts due and not paid for wages or vacation pay (including amounts protected by the Wage Earner Protection Program Act (Canada)), amounts due and not paid under any legislation relating to workers’ compensation or to employment insurance, all amounts deducted or withheld and not paid and remitted when due under the Income Tax Act (Canada), amounts currently or past due and not paid for realty, municipal or similar Taxes, all amounts currently or past due and not contributed, remitted or paid to any Canadian Pension Plan or under the Canada Pension Plan or the PBA, and any amounts representing any unfunded liability, solvency deficiency or wind up or (vii) any other events or circumstances which Agent determines in good faith (in consultation with the Borrower) make the establishment or revision of a Reserve prudent. Reserves shall not be established as and to the extent already addressed by “eligibility” or already accounted for in the determination of NOLV or other value. In no event shall the establishment of a Reserve in respect of a particular actual or contingent liability obligate Agent to make advances to pay such liability or otherwise obligate Agent with respect thereto; provided the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until one (1) Business Day after notice thereof (which shall be in writing) to the Borrower Representative unless (i) an Event of Default has occurred, Agent has provided notice thereof, and such Event of Default is continuing, (ii) the reserve or change in reserve is the result of a Lien (other than a Permitted Lien), senior in priority to Agent’s Lien, attached to any ABL Priority Collateral included in the Borrowing Base and/or (iii) the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); provided, further that during any such one (1) Business Day notice period, Lenders shall have no obligations to fund any Loan or cause to be issued any Letter of Credit to the extent that, after giving pro forma effect to the making of such Loan or issuance of such Letter of Credit and to the establishment of any such new reserve or change in such reserve, the Loan Limits would be exceeded. Notwithstanding the foregoing, the Agent agrees it shall not be permitted to implement any Reserve with respect to a Mexican “social reserve”.

(c)Uncommitted Accordion.

(i)(i) Provided no Default or Event of Default then exists, at any time during the period from and after the Closing Date through the second anniversary of the Closing Date, the Borrower Representative may request from time to time (but subject to the conditions set forth in clause (c)(v) below) that the Maximum Revolving Facility Amount be increased by an amount in the aggregate for all such increases of the Maximum Revolving Facility Amount not to exceed the Available Increase Amount (each such increase, an “Increase”); provided, that (i) any such request for an Increase shall be in a minimum amount of $5,000,0002,500,000, (ii) Borrowers may make a maximum of fourtwo (42) such requests and (iii) after giving effect thereto, the sum of the total of the Increases does not exceed $15,000,0005,000,000. At the time of sending such notice, the Borrower Representative (in consultation with the Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders).

(ii)The Agent shall notify the Borrower Representative and each Lender of the Lenders’ responses to each request made hereunder.

(iii)Each Lender shall notify the Agent within such time period whether or not it agrees to increase its Revolving Loan Commitment and, if so, whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Revolving Loan Commitment, and no Lender shall be required to so increase its Revolving Loan Commitment hereunder.

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equal to ten percent (10%) of the Maximum Revolving Facility Amount (without giving effect to any Reserves established against the Maximum Revolving Facility Amount) and (ii) after giving effect to any such Protective Advances, the outstanding balance of all Revolving Loans will not exceed the Maximum Revolving Facility Amount.

(b) Notwithstanding any contrary provision of this this Agreement, at the request of Borrower Representative, Agent may in its sole discretion (but with absolutely no obligation), make Revolving Loans to any Borrower, on behalf of the Lenders with a Revolving Loan Commitment, in amounts that exceed Excess Availability (any such excess Revolving Loans are herein referred to herein, collectively, as "Overadvances"); provided, that, no Overadvance shall result in a Default due to any Borrower's failure to comply with Section 2.1(a) for so long as such Overadvance remains outstanding in accordance with the terms of this paragraph, but solely with respect to the amount of such Overadvance. Overadvances may be made even if the conditions precedent set forth in Section 4.2 have not been satisfied. The authority of Agent to make Overadvances is limited to an aggregate amount not to exceed an amount equal to ten percent (10%) of the Maximum Revolving Facility Amount (without giving effect to any Reserves established against the Maximum Revolving Facility Amount) at any time. No Overadvance may remain outstanding for more than thirty (30) days and no Overadvance shall cause any Lender's outstanding balance of Revolving Loans to exceed its Revolving Loan Commitment. Required Lenders may, at any time, revoke Agent's authorization to make Overadvances, provided that any such revocation must be in writing and shall become effective prospectively upon Agent's receipt thereof.

(c) Upon the making of any Protective Advance or Overadvance (whether before or after the occurrence of a Default or Event of Default), each Lender with a Revolving Loan Commitment shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from Agent, without recourse or warranty, an undivided interest and participation in such Protective Advance or Overadvance, as applicable, in proportion to its Pro Rata Share of the Revolving Loan Commitment. Agent may, at any time, require the applicable Lenders to fund their participations. From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance or Overadvance, as applicable, purchased hereunder, Agent shall promptly distribute to such Lender, such Lender's Pro Rata Share of all payments of principal and interest and all proceeds of Collateral received by such Agent in respect of such Loan. Each Lender acknowledges and agrees that (i) Agent may elect to fund a Protective Advance or Overadvance through one or more of its Affiliates (including, without limitation, EncinaEclipse Business CreditCapital SPV, LLC) on behalf of Agent for administrative convenience and (ii) any such funding shall constitute a Protective Advance or Overadvance, as applicable, as if made by Agent subject to the terms and conditions of this Agreement.

2.3Notice of Borrowing; Manner of Revolving Loan Borrowing.

(a)Borrower Representative shall request each Revolving Loan by submitting such request by ABLSoft (or, if requested by Agent, by delivering, in writing or by an Approved Electronic Communication, a Notice of Borrowing substantially in the form of Exhibit A hereto) (each such request a "Notice of Borrowing"). Subject to the terms and conditions of this Agreement, Agent shall, except as provided in Section 2.2, deliver the amount of the Revolving Loan requested in the Notice of Borrowing for credit to any account of Borrower as Borrower Representative may specify at a bank acceptable to Agent (provided, that such account must be one identified on Schedule 5(a) of the Perfection Certificate and approved by Agent as an account to be used for funding of Loan proceeds) (any such account, a "Funding Account") by wire transfer of immediately available funds (i) on the same day if the Notice of Borrowing is received by Agent on or before 10:00 a.m. Central Time on a Business Day or (ii) on the immediately following Business Day if the Notice of Borrowing is received by Agent after 10:00 a.m.

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to Agent in its sole discretion (such other Person being called a "Replacement Lender") to purchase the Loans and Commitments of such Lender and such Lender's rights hereunder, without recourse to or warranty by, or expense to, such Lender, for a purchase price equal to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid interest on such Loans and all accrued but unpaid fees owed to such Lender and any other amounts payable to such Lender under this Agreement, and to assume all the obligations of such Lender hereunder, and, upon such purchase and assumption (pursuant to an Assignment and Assumption), such Lender shall no longer be a party hereto or have any rights hereunder (other than rights with respect to indemnities and similar rights applicable to such Lender prior to the date of such purchase and assumption) and shall be relieved from all obligations to Borrowers hereunder, and the Replacement Lender shall succeed to the rights and obligations of such Lender hereunder; provided, however, that in the case of payments required to be made pursuant to Section 3.10 hereof, such assignment will result in a reduction in such compensation or payments thereafter.

(e)LIBOR Discontinuation. Notwithstanding anything contained herein to the contrary, if Agent reasonably determines after the Closing Date that the LIBOR Rate has been discontinued or is no longer available as a benchmark interest rate, Agent shall select a comparable successor rate in its Permitted Discretion (in consultation with the Borrowers), which successor rate shall be applied in a manner consistent with market practice taking into account the benchmark interest rates applicable to funding sources for the Lenders, and will promptly so notify each Lender.Benchmark Replacement Setting.

(i)Benchmark Replacement.

(A)Notwithstanding anything to the contrary herein or in any other Loan Document if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (a)(i) or (a)(ii) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (a)(iii) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

(B)Notwithstanding anything to the contrary herein or in any other Loan Document, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any

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other Loan Document; provided that this clause (B) shall not be effective unless Agent has delivered to the Lenders and the Borrowers a Term SOFR Notice. For the avoidance of doubt, Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may elect or not elect to do so in its sole discretion.

(viii)Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(ix)Notices; Standards for Decisions and Determinations. Agent will promptly notify Borrowers and the Lenders of (1) any occurrence of a Benchmark Transition Event, a Term SOFR Transition Event, or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (2) the implementation of any Benchmark Replacement, (3) the effectiveness of any Benchmark Replacement Conforming Changes, and (4) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 3.6, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 3.6.

(x)Benchmark Unavailability Period. Upon Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period, Borrower Representative may revoke any request for a Borrowing based upon the LIBOR Rate or continuation of LIBOR Rate Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, Borrower Representative will be deemed to have converted any such request into a request for a Borrowing of or conversion to Base Rate Loans. During any Benchmark Unavailability Period, the component of the Base Rate based upon the then-current Benchmark will not be used in any determination of the Base Rate.

(xi)London Interbank Offered Rate Benchmark Transition Event. On March 5, 2021, the IBA, the administrator of the London interbank offered rate, and the FCA, the regulatory supervisor of the IBA, made the Announcements that the final publication or representativeness date for (1) 1-week and 2-month London interbank offered rate tenor settings will be December 31, 2021 and (2) overnight, 1-month, 3-month, 6-month and 12-month London interbank offered rate tenor settings will be June 30, 2023. No successor administrator for the IBA was identified in such Announcements. The parties hereto agree and acknowledge that the Announcements resulted in the occurrence of a Benchmark Transition Event with respect to the London interbank offered rate pursuant to the terms of this Agreement and that any obligation of Agent to notify any parties of such Benchmark Transition Event pursuant to Section 3.6(d)(iii) shall be deemed satisfied.

4. CONDITIONS PRECEDENT.

4.1 Conditions to Initial Loans/Letters of Credit.

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any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower, or any of their respective Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lenders to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of any Borrower or their respective Subsidiaries.

14.15 ReservedRecovery of Erroneous Payments. Without limitation of any other provision in this Agreement, if at any time Agent makes a payment hereunder in error to any Lender, whether or not in respect of an Obligation due and owing by the Borrowers at such time, where such payment is a Rescindable Amount, then in any such event, each Lender receiving a Rescindable Amount severally agrees to repay to Agent forthwith on demand the Rescindable Amount received by such Lender in immediately available funds in the currency so received, with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to Agent, at the greater of the Federal Funds Rate and a rate determined by Agent in accordance with banking industry rules on interbank compensation. Each Lender irrevocably waives any and all defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. Agent shall inform each Lender promptly upon determining that any payment made to such Secured Party comprised, in whole or in part, a Rescindable Amount.

15.GENERAL PROVISIONS.

15.1Notices.

(a) Notice by Approved Electronic Communications. Agent and each of its Affiliates is authorized to transmit, post or otherwise make or communicate, in its sole discretion (but shall not be required to do so), by Approved Electronic Communications in connection with this Agreement or any other Loan Document and the transactions contemplated therein. Agent is hereby authorized to establish procedures to provide access to and to make available or deliver, or to accept, notices, documents and similar items by posting to ABLSoft. All uses of ABLSoft and other Approved Electronic Communications shall be governed by and subject to, in addition to the terms of this Agreement, the separate terms, conditions and privacy policy posted or referenced in such system (or such terms, conditions and privacy policy as may be updated from time to time, including on such system) and any related contractual obligations executed by Agent and Loan Parties in connection with the use of such system. Each of the Loan Parties, the Lenders and Agent hereby acknowledges and agrees that the use of ABLSoft and other Approved Electronic Communications is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing Agent and each of its Affiliates to transmit Approved Electronic Communications. ABLSoft and all Approved Electronic Communications shall be provided "as is" and "as available". None of Agent or any of its Affiliates or related persons warrants the accuracy, adequacy or completeness of ABLSoft or any other electronic platform or electronic transmission and disclaims all liability for errors or omissions therein. No warranty of any kind is made by Agent or any of its Affiliates or related persons in connection with ABLSoft or any other electronic platform or electronic transmission, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects. Each Borrower and each other Loan Party executing this Agreement agrees that Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with

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ABLSoft, any Approved Electronic Communication or otherwise required for ABLSoft or any Approved Electronic Communication. Prior to the Closing Date, Borrower Representative shall deliver to Agent a complete and executed Client User Form regarding Borrowers’ use of ABLSoft in the form of Exhibit C annexed hereto. No Approved Electronic Communications shall be denied legal effect merely because it is made electronically. Approved Electronic Communications that are not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such Approved Electronic Communication, an E-Signature, upon which Agent and the Loan Parties may rely and assume the authenticity thereof. Each Approved Electronic Communication containing a signature, a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original. Each E-Signature shall be deemed sufficient to satisfy any requirement for a "signature" and each Approved Electronic Communication shall be deemed sufficient to satisfy any requirement for a "writing", in each case including pursuant to this Agreement, any other Loan Document, the UCC, the Federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act any similar Canadian laws governing the electronic execution and delivery of agreement, documents and instruments and any substantive or procedural law governing such subject matter. Each party or beneficiary hereto agrees not to contest the validity or enforceability of an Approved Electronic Communication or E-Signature under the provisions of any applicable law requiring certain documents to be in writing or signed; provided, that nothing herein shall limit such party's or beneficiary's right to contest whether an Approved Electronic Communication or E-Signature has been altered after transmission.

(b)All Other Notices. All notices, requests, demands and other communications under or in respect of this Agreement or any transactions hereunder, other than those approved for or required to be delivered by Approved Electronic Communications (including via ABLSoft or otherwise pursuant to Section 15.1(a)), shall be in writing and shall be personally delivered or mailed (by prepaid registered or certified mail, return receipt requested), sent by prepaid recognized overnight courier service, or by email to the applicable party at its address or email address indicated below,

If to Agent:

ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC,

as Agent

123 N Wacker Suite 2400

Chicago, IL 60606

Attention: John Whetstone

Email: jwhetstone@encinabc.com

jwhetstone@eclipsebuscap.com

with a copy to:

Choate, Hall & Stewart LLP

Two International Place

Boston, MA 02110

Attn: Jennifer Conway Fenn

Telephone: (617) 248-4845

Facsimile: (617) 502-4845

Email: jfenn@choate.comjfenn@choate.com

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If to Borrower Representative, any Borrower or any other Loan Party:

Horizon Global Americas Inc.

47912 Halyard Drive, Suite 100

Plymouth, MI 48170

Attention: Jay Goldbaum

Email: jgoldbaum@horizonglobal.comjgoldbaum@horizonglobal.com

with a copy to:

Jones Day

100 High Street

Boston, MA 02110

Attention: Rachel Rawson

Telephone: (617) 449-6904

Email: rlrawson@jonesday.com

rlrawson@jonesday.com

and

Jones Day

901 Lakeside Ave

Cleveland, OH 44114

Attention: Rachel Rawson

Telephone: (216) 586-7276

Email: rlrawson@jonesday.comrlrawson@jonesday.com

or, as to each party, at such other address as shall be designated by such party in a written notice to the other party delivered as aforesaid. All such notices, requests, demands and other communications shall be deemed given (i) when personally delivered, (ii) three Business Days after being deposited in the mails with postage prepaid (by registered or certified mail, return receipt requested), (iii) one Business Day after being delivered to the overnight courier service, if prepaid and sent overnight delivery, addressed as aforesaid and with all charges prepaid or billed to the account of the sender or

(iv) when sent by email transmission to an email address designated by such addressee and the sender receives a confirmation of transmission.

15.2Severability. If any provision of this Agreement or any other Loan Document is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision shall thereupon be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement or such other Loan Document, as the situation may require, and this Agreement and the other Loan Documents shall be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein or therein, as the case may be.

15.3Integration. This Agreement and the other Loan Documents represent the final, entire and complete agreement between each Loan Party that is a party hereto and thereto and Agent and supersede all prior and contemporaneous negotiations, oral representations and agreements, all of which are merged and integrated into this Agreement. THERE ARE NO ORAL UNDERSTANDINGS, REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES THAT ARE NOT SET FORTH IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

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15.4Waivers. The failure of Agent and the Lenders at any time or times to require any Loan Party to strictly comply with any of the provisions of this Agreement or any other Loan Documents shall not waive or diminish any right of Agent later to demand and receive strict compliance therewith. Any waiver of any default shall not waive or affect any other default, whether prior or subsequent, and whether or not similar. None of the provisions of this Agreement or any other Loan Document shall be deemed to have been waived by any act or knowledge of Agent or its agents or employees, but only by a specific written waiver signed by an authorized officer of Agent and any necessary Lenders and delivered to Borrowers. Once an Event of Default shall have occurred, it shall be deemed to continue to exist and not be cured or waived unless specifically waived in writing by an authorized officer of Agent and Required Lenders and delivered to Borrowers. Each Loan Party waives demand, protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, Instrument, Account, General Intangible, Document, Chattel Paper, Investment Property or guaranty at any time held by Agent on which such Loan Party is or may in any way be liable, and notice of any action taken by Agent, unless expressly required by this Agreement, and notice of acceptance hereof.

15.5Amendments.

(a) No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by the Required Lenders, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that, except to the extent set forth in Section 14.9 hereof, no amendment, modification, waiver or consent shall (i) extend or increase the Commitment of any Lender without the written consent of such Lender, (ii) extend the date scheduled for payment of any principal (excluding mandatory prepayments) of or interest on the Loans or any fees payable hereunder without the written consent of each Lender directly affected thereby, (iii) reduce the principal amount of any Loan, the rate of interest thereon or any fees payable hereunder, without the consent of each Lender directly affected thereby; (iv) amend or modify the definitions of Borrowing Base, Eligible Accounts or Eligible Inventory, or any components thereof (including, without limitation, any Advance Rates), without the written consent of each Lender; or (v) release any guarantor from its obligations under any Guaranty, other than as part of or in connection with any disposition permitted hereunder, or release or subordinate its liens on all or any substantial part of the Collateral granted under any of the other Loan Documents (except as permitted by Section 14.10), change the definition of Required Lenders, any provision of Section 6.2, any provision of this Section 15.4, the provisions of Section 14.9 or reduce the aggregate Pro Rata Share required to effect an amendment, modification, waiver or consent, without, in each case set forth in this clause (v), the written consent of all Lenders. No provision of Section 14 or other provision of this Agreement affecting Agent in its capacity as such shall be amended, modified or waived without the consent of Agent. Any amendment contemplated by Section 3.6(e) of this agreement in connection with a Benchmark Transition Event or an Early Opt-in Election shall be effective as contemplated by such Section 3.6(e) hereof.

(b)If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all Lenders, the consent of the Required Lenders is obtained, but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained being referred to as a "Non-Consenting Lender"), then, so long as Agent is not a Non-Consenting Lender, Agent and/or a Person or Persons reasonably acceptable to Agent shall have the right to purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree that they shall, upon Agent's request, sell and assign to Agent and/or such Person or Persons, all of the Loans and Commitments of such Non-Consenting Lenders for an amount equal to the principal balance of all such Loans and Commitments held by such Non-Consenting Lenders and all accrued interest, fees, expenses

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IN WITNESS WHEREOF, each Borrower, each other Loan Party party hereto, Agent and each Lender have signed this Agreement as of the date first set forth above.

Agent:

ENCINAECLIPSE BUSINESS

CREDITCAPITAL, LLC

By:

Name:    __________________________________

Its:    Authorized Signatory

Lenders:

ENCINAECLIPSE BUSINESS

CREDITCAPITAL SPV, LLC

By:

Name:    ___________________________________

Its:    Authorized Signatory    

Signature Page to Loan and Security Agreement

10176250v410447624v5

Annex I

Description of Certain Terms

1. Loan Limits for Revolving Loans and Letters of Credit
(a) Maximum Revolving Facility Amount	$85,000,00095,000,000 (as increased from time to time in accordance with Section 2.1(c))
(b) Advance Rates
(i) Accounts Advance Rate
a. Eligible Receivables of Investment Grade Account Debtors	Ninety(x) on and after the Fifth Amendment Effective Date through December 31, 2021, ninety-two and one half percent (92.5%) and (y) after December 31, 2021, ninety percent (90%); provided, that if Dilution exceeds five percent (5%), Agent may, at its option, (A) reduce such advance rate by the number of full or partial percentage points comprising such excess or (B) establish a Reserve on account of such excess (the "Dilution Reserve").
b. Eligible Receivables of Non-Investment Grade Account Debtors	Eighty(x) on and after the Fifth Amendment Effective Date through December 31, 2021, ninety percent (90%) and (y) after December 31, 2021, eighty-five percent (85%); provided, that if Dilution exceeds five percent (5%), Agent may, at its option, (A) reduce such advance rate by the number of full or partial percentage points comprising such excess or (B) establish a Dilution Reserve on account of such excess.
(ii) Inventory Advance Rate(s)
Lower of cost or net realizable value:	Seventy percent (70% )
NOLV:	Eighty(x) on and after the Fifth Amendment Effective Date through December 31 2021, ninety-two and one half percent (92.5%) and (y) after December 31, 2021, eighty-five percent (85%)
(c) Letter of Credit Limit:	$3,500,000
(d) Inventory Sublimit(s)
i. Overall	$47,500,000
ii. Mexican Inventory Sublimit	(x) on and after the Fifth Amendment Effective Date through December 31, 2021, $6,500,000 and (y) after December 31, 2021, $5,000,000
iii. In-Transit Sublimit	(x) on and after the Fifth Amendment Effective Date through December 31, 2021, $8,500,000 and (y) after December 31, 2021, $7,500,000
(e) Reserved
(f) Reserved
2. Availability Block	$5,000,000
Annex I - 1

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3. Interest Rates
(a) Applicable Margins	Four percent (4.00%) per annum in excess of the LIBOR Rate Three percent (3.00%) per annum in excess of the Base Rate
4. Maximum Days Eligible Accounts
(a) Maximum days after original invoice date for Eligible Accounts other than for Specified Account Debtors	One hundred twenty (120) days
(b) Maximum days after original invoice date for Eligible Accounts of only the Specified Account Debtors	Three hundred sixty-five (365) days

(c) Maximum days after original invoice due date for Eligible Accounts	Sixty (60) days
5. Agent's Bank	Wells Fargo Bank, National Association and its affiliates Bank: Wells Fargo Bank ABA (Routing) # 121-000-24 Account Name: Eclipse Business Capital SPV, LLC (f/k/a Encina Business Credit SPV, LLC) Account #: 4943951905 Reference: Horizon (which bank may be changed from time to time by notice from Agent to Borrower Representative)
6. Scheduled Maturity Date	March 13, 2023

Annex I-2

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Annex III

Revolving Loan Commitments1

EncinaEclipse Business CreditCapitalSPV, LLC	$85,000,000$95,000,000
Total	$75,000,000$95,000,000

1 As increased from time to time in accordance with Section 2.1(c).

Annex III-1

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Exhibit A

[FORM OF] NOTICE OF BORROWING

[letterhead of BorrowerRepresentative]

ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC,

as Agent

123 N Wacker Suite 2400

Chicago, IL 60606

Attention: John Whetstone

Ladies and Gentlemen:

Please refer to the Loan and Security Agreement dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") among the undersigned, as Borrower Representative, the Borrowers (as defined therein) the Loan Party (as defined therein) party thereto, the Lenders party thereto and ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC, (f/k/a Encina Business Credit, LLC) as Agent for the Lenders.Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement.This notice is given pursuant to Section 2.3 of the Loan Agreement and constitutes a representation by Borrower Representative, for itself and on behalf of each Borrower, that the conditions specified in Section 4 of the Loan Agreement have been satisfied.Without limiting the foregoing, (i) each of the representations and warranties set forth in the Loan Agreement and in the other Loan Documents is true and correct in all respects as of the date hereof (or to the extent any representations or warranties are expressly made solely as of an earlier date, such representations and warranties shall be true and correct as of such earlier date), both before and after giving effect to the Loans requested hereby, and (ii) no Default or Event of Default is in existence, both before and after giving effect to the Loans requested hereby.

Borrower Representative hereby requests a borrowing, on behalf of each Borrower, under the Loan Agreement as follows:

The aggregate amount of the proposed borrowing is $[______________].The requested borrowing date for the proposed borrowing (which is a Business Day) is [______________], [____].

Borrower Representative has caused this Notice of Borrowing to be executed and delivered by its officer thereunto duly authorized on [_____________].

HORIZON GLOBAL AMERICAS INC.,

as Borrower Representative

By:_______________________________________

Title:

Ex.A-1

10176250v410447624v5

Exhibit C

CLIENT USER FORM

ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC

ABLSoft – Client User Form

Borrowers Names:Horizon Global Americas Inc.

Cequent Towing Products of Canada, Ltd.

Borrower Number:HORIZON101

Loan and Security Agreement Date:March 13, 2020

I, being an authorized signer of the above borrower, as Borrower Representative (the "Borrower"), refer to the above Loan and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") between the Borrowers named above, the other Loan Parties party thereto, the Lenders party thereto and ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC (f/k/a Encina Business Credit, LLC), as Agent.This is the Client User Form, used to determined client access to ABLSoft.Terms defined in the Loan Agreement have the same meaning when used in this Client User Form.

Being duly authorized by Borrower Representative, on behalf of Borrowers, I confirm that the following individuals have been authorized by Borrower to have access to ABLSoft:

First Name Last Name Email Address Phone Number

HORIZON GLOBAL AMERICAS INC., as Borrower Representative

By_________________________

Name:______________________

Ex. C-1

10176250v410447624v5

Exhibit D

AUTHORIZED ACCOUNTS FORM

ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC

Authorized Accounts Form

Borrowers Names:Horizon Global Americas Inc.

Cequent Towing Products of Canada, Ltd.

Borrower Number:HORIZON101

Loan and Security Agreement Date:March 13, 2020

I, being an authorized signer of HORIZON GLOBAL AMERICAS INC.,Delaware corporation, as Borrower Representative, refer to the above Loan and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") between the Borrower named above, the Lenders party thereto and ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC (f/k/a Encina Business Credit, LLC), as agent ("Agent").This is the Authorized Accounts Form, referring to authorized operating bank accounts of Borrower.Terms defined in the Loan Agreement have the same meaning when used in this Authorized Accounts Form.

Being duly authorized by Borrower Representative, I confirm that the following operating bank accounts of Borrowers are the accounts into which the proceeds of any Loan may be paid:

Bank Routing Number Account number Account name

HORIZON GLOBAL AMERICAS INC., as Borrower Representative

By:_____________________________

Authorized Signer

Name: ______________________

Title:________________________

Ex. D-1

10176250v410447624v5

Exhibit E

[FORM OF] ACCOUNT DEBTOR NOTIFICATION

[Date]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

[Account Debtor]

[Address]

Re:Loan Transaction with ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC

Ladies and Gentlemen:

Please be advised that we have entered into certain financing arrangements (along with any other financing agreements that we may enter into with Agent in the future, the "Financing Arrangements") with ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC (f/k/a Encina Business Credit, LLC) ("Agent"), as Agent for certain Lenders, pursuant to which we have granted to Agent a security interest in, among other things, any and all Accounts and Chattel Paper (as those terms are defined in the Uniform Commercial Code) owing by you to us, whether now existing or hereafter arising.

You are authorized and directed to respond to any inquiries that Agent may direct to you from time to time pertaining to the validity, amount and other matters relating to such Accounts and Chattel Paper.In the event that Agent requests that payment for any Accounts and/or Chattel Paper be made directly to Agent, you are hereby authorized and directed to comply with such instructions, without further authorization or instruction from us.

This authorization and directive shall be continuing and irrevocable until Agent advises you, in writing, that this authorization is no longer in force.

Very truly yours,

[BORROWER]

By: _____________________________

Name: ________________________

Its:

cc:ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC

as Agent

123 N Wacker Suite 2400

Chicago, IL 60606

Attention: John Whetstone

Ex. E-1

10176250v410447624v5

Exhibit F

[FORM OF] COMPLIANCE CERTIFICATE

[letterhead of Parent]

To:ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC,

as Agent

123 N Wacker Suite 2400

Chicago, IL 60606

Attention: John Whetstone

Re:Compliance Certificate dated _______________

Ladies and Gentlemen:

Reference is made to that certain Loan and Security Agreement dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") by and among ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC (f/k/a Encina Business Credit, LLC) ("Agent"), the Lenders party thereto, Horizon Global Americas Inc., a Delaware corporation (“Horizon Americas”), Cequent Towing Products of Canada, Ltd., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and collectively, the “Borrowers”) and each of the other Loan Parties (as defined therein) party thereto.Capitalized terms used in this Compliance Certificate have the meanings set forth in the Loan Agreement unless specifically defined herein.

Pursuant to Section 7.15 of the Loan Agreement, the undersigned Authorized Officer of Parent hereby certifies on behalf of each Borrower (solely in his capacity as an officer of Parent and not in his individual capacity) that:

1.The financial statements of Borrowers for the -month period ending _____________ attached hereto have been prepared in accordance with GAAP and fairly present the financial condition of Borrowers for the periods and as of the dates specified therein (it being understood that the obligation to furnish the foregoing to the Agent shall be deemed to be satisfied in respect of any fiscal quarter of the Parent by the filing of the Parent’s [annual][quarterly] report on Form [10-K][10-Q] for such [fiscal year][fiscal quarter] with the Securities and Exchange Commission to the extent permitted by the Loan Agreement).

2.As of the date hereof, there does not exist any Default or Event of Default.

3.Borrowers are in compliance with the applicable financial covenant contained in Section 9.2 of the Loan Agreement for the periods covered by this Compliance Certificate.Attached hereto are statements of all relevant facts and computations in reasonable detail sufficient to evidence Borrowers’ compliance with such financial covenant, which computations were made in accordance with GAAP.

4.[Except as attached hereto, the Loan Parties have not acquired, or otherwise registered, any registered Intellectual Property since the last quarter.]2

2 To be included in all quarter-end certificates.

Ex. F-1

10176250v410447624v5

Exhibit G

[FORM OF] ASSIGNMENT AND ASSUMPTION

Dated [___________ ___, 20_]

Reference is made to the Loan and Security Agreement dated as of March 13, 2020 among Horizon Global Americas Inc., a Delaware corporation (“Horizon Americas”), Cequent Towing Products of Canada, Ltd., a company formed under the laws of the Province of Ontario ("Cequent Canada"; together with Horizon Americas, each a "Borrower" and collectively the “Borrowers”) , the other Loan Parties party thereto, the lenders party thereto as "Lenders" and ENCINAECLIPSE BUSINESS CREDIT,CAPITAL LLC (f/k/a Encina Business Credit, LLC), as agent ("Agent") for the Lenders (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement").Terms defined in the Loan Agreement are used herein as therein defined.

[____________], solely in its capacity as a Lender under the Loan Agreement (the "Assignor"), and [__________] (the "Assignee") agree as follows:

1.The Assignor hereby sells and assigns to the Assignee, without recourse, representation or warranty (except as expressly set forth elsewhere herein), and the Assignee hereby purchases and assumes from the Assignor, on the Effective Date (as defined below), an interest as set forth in Exhibit A attached hereto (the "Assigned Interest") in and to (i) all of the Assignor's right, title and interest with respect to the Loans set forth in Exhibit A, (ii) all of the Assignor's right, title and interest with respect to the [Revolving Loan Commitment] of Assignor as set forth in Exhibit A and (iii) to the extent related thereto, all of the Assignor's rights and obligations, solely as a Lender, under the Loan Agreement and any other Loan Document (including, without limitation, (A) the outstanding principal amount of the Loans made by the Assignor and assigned to Assignee hereunder, and (B) the Assignor's pro rata share of the obligations owing by each Loan Party under the Loan Agreement and the Loan Documents).The Assigned Interest (expressed as a percentage) in the Loans and the [Revolving Loan Commitment] is set forth in Exhibit A.

2.The Assignor (i) represents and warrants as of the date hereof that [its Revolving Loan Commitment, or if its Revolving Loan Commitment shall have been terminated, the outstanding principal amount of its Revolving Loans], is set forth in Exhibit A (without giving effect to assignments thereof which have not yet become effective); (ii) represents and warrants that it is the legal and beneficial owner of the interest it is assigning hereunder; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by or in connection with the Loan Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other Loan Document, or any other instrument or document furnished pursuant thereto; and (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under the Loan Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto.

3.The Assignee represents and warrants that it has become a party hereto solely in reliance upon its own independent investigation of the financial and other circumstances surrounding the Loan Parties, the Collateral, the Loans, the Revolving Loan Commitments and all aspects of the transactions evidenced by or referred to in the Loan Documents, or has otherwise satisfied itself thereto, and that it is not relying upon any representation, warranty or statement (except any such representation, warranty or statement expressly set forth in this Assignment and Assumption) of the Assignor in connection with the assignment made under this Assignment and Assumption.The Assignee further acknowledges that the

Ex. G-1

10176250v410447624v5

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Assignment and Assumption as of the Effective Date.

[ASSIGNOR]

By_______________________________________

Name ____________________________________

Title

NOTICE ADDRESS AND PAYMENT

INSTRUCTIONS FOR ASSIGNOR

Telephone No. (___) ___-____

Telecopy No. (___)___-____

[ASSIGNEE]

By_______________________________________

Name ____________________________________

Title

NOTICE ADDRESS AND PAYMENT

INSTRUCTIONS FOR ASSIGNEE

Telephone No. (___)___-____

Telecopy No. (___)___-____

Ex. G-4

10176250v410447624v5

ACCEPTEDthisday

of,20

ENCINAECLIPSE BUSINESS

CREDIT,CAPITAL LLC,

as Agent

By______________________

Name____________________

Title_____________________

Ex. G-5

10176250v410447624v5

EXHIBIT A

Borrowers: Horizon Global Americas Inc.

Cequent Towing Products of Canada, Ltd.

Description of Loan Agreement:Loan and Security Agreement, dated as of March 13, 2020 among Borrowers, the other Loan Parties party thereto, the lenders party thereto as "Lenders" and EncinaEclipse Business Capital LLC (f/k/a Encina Business Credit, LLC as agent ("Agent") for the Lenders (as amended, restated, supplemented or otherwise modified from time to time).

Assigned Interests:

Assignor's Interest Prior to Assignment	Assigned Interests	Assignor's Remaining Interest After Assignment	Assignee's Pro Rata Shares
Revolving Loans and Revolving Loan Commitments

Ex. H-1

10176250v410447624v5

Annex II

Updated Form of Borrowing Base Certificate

See attached.

10176250v410447624v5

EX-31.1

Exhibit 31.1

Certification

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

(Chapter 63, Title 18 U.S.C. Section 1350(A) and (B))

I, Terrence G. Gohl, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 4, 2021

/s/ TERRENCE G. GOHL

Terrence G. Gohl

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

(Chapter 63, Title 18 U.S.C. Section 1350(A) and (B))

I, Dennis E. Richardville, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 4, 2021

/s/ DENNIS E. RICHARDVILLE

Dennis E. Richardville

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Global Corporation (the "Company") on Form 10-Q for the period ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Terrence G. Gohl, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2021

/s/  TERRENCE G. GOHL

Terrence G. Gohl

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Global Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dennis E. Richardville, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes‑Oxley Act of 2002, that to the best of my knowledge:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2021

/s/  DENNIS E. RICHARDVILLE

Dennis E. Richardville

Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2021	Nov. 01, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-37427
Entity Registrant Name	HORIZON GLOBAL CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-3574483
Entity Address, Address Line One	47912 Halyard Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Plymouth
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48170
City Area Code	734
Local Phone Number	656-3000
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	HZN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,286,647
Entity Central Index Key	0001637655
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 17,350	$ 44,970
Restricted cash	5,500	5,720
Receivables, net	96,320	87,420
Inventories	164,270	115,320
Prepaid expenses and other current assets	13,510	11,510
Total current assets	296,950	264,940
Property and equipment, net	72,940	74,090
Operating lease right-of-use assets	38,290	47,310
Goodwill	0	3,360
Other intangibles, net	52,870	58,230
Deferred income taxes	1,220	1,280
Other assets	6,060	7,280
Total assets	468,330	456,490
Current liabilities:
Short-term borrowings and current maturities, long-term debt	5,940	14,120
Accounts payable	111,270	99,520
Short-term operating lease liabilities	11,120	12,180
Accrued liabilities	53,340	59,100
Total current liabilities	181,670	184,920
Gross long-term debt	290,340	251,960
Unamortized debt issuance costs and discount	(29,000)	(20,570)
Long-term debt	261,340	231,390
Deferred income taxes	3,650	3,130
Long-term operating lease liabilities	36,970	46,340
Other long-term liabilities	10,630	14,560
Total liabilities	494,260	480,340
Contingencies (See Note 10)
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None	0	0
Common stock, $0.01 par: Authorized 400,000,000 shares; 27,973,153 shares issued and 27,286,647 outstanding at September 30, 2021, and 27,089,673 shares issued and 26,403,167 outstanding at December 31, 2020	270	260
Common stock warrants issued, outstanding and exercisable for 9,231,146 and 5,815,039 shares of common stock at September 30, 2021 and December 31, 2020, respectively	25,010	9,510
Paid-in capital	170,050	166,610
Treasury stock, at cost: 686,506 shares at September 30, 2021 and December 31, 2020	(10,000)	(10,000)
Accumulated deficit	(194,520)	(178,530)
Accumulated other comprehensive loss	(10,610)	(6,540)
Total Horizon Global shareholders' deficit	(19,800)	(18,690)
Noncontrolling interest	(6,130)	(5,160)
Total shareholders' deficit	(25,930)	(23,850)
Total liabilities and shareholders' equity	$ 468,330	$ 456,490

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares (in shares)	100,000,000	100,000,000
Preferred stock, issued shares (in shares)	0	0
Preferred stock, outstanding shares (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, authorized shares (in shares)	400,000,000	400,000,000
Common Stock, issued shares (in shares)	27,973,153	27,089,673
Common Stock, outstanding shares (in shares)	27,286,647	26,403,167
Issued warrants (in shares)	9,231,146	5,815,039
Warrants outstanding and exercisable (in shares)	9,231,146	5,815,039
Treasury stock, shares (in shares)	686,506	686,506

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Net sales	$ 196,540	$ 201,630	$ 617,850	$ 485,370
Cost of sales	(157,780)	(158,260)	(491,240)	(397,700)
Gross profit	38,760	43,370	126,610	87,670
Selling, general and administrative expenses	(32,430)	(34,810)	(102,170)	(93,760)
Operating profit (loss)	6,330	8,560	24,440	(6,090)
Other (expense) income, net	(1,720)	690	(5,940)	(1,430)
Loss on debt extinguishment	0	0	(11,650)	0
Interest expense	(6,970)	(7,560)	(21,000)	(23,970)
(Loss) income from continuing operations before income tax	(2,360)	1,690	(14,150)	(31,490)
Income tax expense	(410)	(100)	(2,810)	(170)
Net (loss) income from continuing operations	(2,770)	1,590	(16,960)	(31,660)
Loss from discontinued operations, net of income tax	0	0	0	(500)
Net (loss) income	(2,770)	1,590	(16,960)	(32,160)
Less: Net loss attributable to noncontrolling interest	(300)	(340)	(970)	(1,010)
Net (loss) income attributable to Horizon Global	$ (2,470)	$ 1,930	$ (15,990)	$ (31,150)
Basic:
Continuing operations (in dollars per share)	$ (0.09)	$ 0.07	$ (0.59)	$ (1.19)
Discontinued operations (in dollars per share)	0	0	0	(0.02)
Total (in dollars per share)	(0.09)	0.07	(0.59)	(1.21)
Diluted:
Continuing operations (in dollars per share)	(0.09)	0.06	(0.59)	(1.19)
Discontinued operations (in dollars per share)	0	0	0	(0.02)
Total (in dollars per share)	$ (0.09)	$ 0.06	$ (0.59)	$ (1.21)
Weighted average common shares outstanding:
Basic (in shares)	27,286,600	25,939,741	27,019,554	25,651,789
Diluted (in shares)	27,286,600	33,329,106	27,019,554	25,651,789

XML

Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (2,770)	$ 1,590	$ (16,960)	$ (32,160)
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other	(1,650)	1,900	(4,070)	(400)
Total other comprehensive (loss) income, net of tax	(1,650)	1,900	(4,070)	(400)
Total comprehensive (loss) income	(4,420)	3,490	(21,030)	(32,560)
Less: Comprehensive loss attributable to noncontrolling interest	(300)	(340)	(970)	(1,010)
Comprehensive (loss) income attributable to Horizon Global	$ (4,120)	$ 3,830	$ (20,060)	$ (31,550)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash Flows from Operating Activities:
Net (loss) income	$ (16,960)	$ (32,160)
Less: Net loss from discontinued operations	0	(500)
Net loss from continuing operations	(16,960)	(31,660)
Adjustments to reconcile net loss from continuing operations to net cash (used for) provided by operating activities:
Depreciation	11,710	11,110
Amortization of intangible assets	4,220	5,040
Loss on debt extinguishment	11,650	0
Amortization of original issuance discount and debt issuance costs	8,010	11,450
Deferred income taxes	730	(820)
Non-cash compensation expense	2,590	2,190
Paid-in-kind interest	650	6,280
Increase in receivables	(12,360)	(35,170)
(Increase) decrease in inventories	(52,700)	30,100
Increase in prepaid expenses and other assets	(1,910)	(4,080)
Increase in accounts payable and accrued liabilities	11,820	29,800
Other, net	1,910	(50)
Net cash (used for) provided by operating activities from continuing operations	(30,640)	24,190
Cash Flows from Investing Activities:
Capital expenditures	(14,730)	(8,090)
Other, net	20	70
Net cash used for investing activities from continuing operations	(14,710)	(8,020)
Cash Flows from Financing Activities:
Proceeds from borrowings on credit facilities	2,870	6,440
Repayments of borrowings on credit facilities	(1,960)	(3,330)
Proceeds from Senior Term Loan, net of issuance costs	75,300	0
Repayments of borrowings on Replacement Term Loan, including transaction fees	(94,940)	0
Proceeds from Revolving Credit Facility, net of issuance costs	28,680	54,680
Repayments of borrowings on Revolving Credit Facility	(8,000)	(28,300)
Proceeds from ABL revolving debt, net of issuance costs	0	8,000
Repayments of borrowings on ABL revolving debt	0	(27,920)
Proceeds from Paycheck Protection Program Loan	0	8,670
Proceeds from issuance of common stock warrants	16,300	0
Proceeds from exercise of common stock warrants	420	0
Other, net	(650)	(320)
Net cash provided by financing activities from continuing operations	18,020	17,920
Discontinued Operations:
Net cash used for discontinued operations	0	(500)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(510)	290
(Decrease) increase for the period	(27,840)	33,880
At beginning of period	50,690	11,770
At end of period	22,850	45,650
Supplemental disclosure of cash flow information:
Cash paid for interest	16,130	4,990
Cash paid for taxes, net of refunds	$ 2,010	$ 990

XML

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Common Stock Warrants	Paid-in Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive (Loss) Income	Total Horizon Global Shareholders' Equity (Deficit)	Noncontrolling Interest
Beginning balance at Dec. 31, 2019	$ 8,600	$ 250	$ 10,610	$ 163,240	$ (10,000)	$ (141,970)	$ (9,790)	$ 12,340	$ (3,740)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(17,030)					(16,740)		(16,740)	(290)
Other comprehensive income (loss), net of tax	(4,340)						(4,340)	(4,340)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	(60)			(60)				(60)
Non-cash compensation expense	420			420				420
Ending balance at Mar. 31, 2020	(12,410)	250	10,610	163,600	(10,000)	(158,710)	(14,130)	(8,380)	(4,030)
Beginning balance at Dec. 31, 2019	8,600	250	10,610	163,240	(10,000)	(141,970)	(9,790)	12,340	(3,740)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(32,160)
Other comprehensive income (loss), net of tax	(400)
Ending balance at Sep. 30, 2020	(22,090)	260	9,800	165,910	(10,000)	(173,120)	(10,190)	(17,340)	(4,750)
Beginning balance at Mar. 31, 2020	(12,410)	250	10,610	163,600	(10,000)	(158,710)	(14,130)	(8,380)	(4,030)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(16,720)					(16,340)		(16,340)	(380)
Other comprehensive income (loss), net of tax	2,040						2,040	2,040
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	50			50				50
Non-cash compensation expense	900			900				900
Ending balance at Jun. 30, 2020	(26,140)	250	10,610	164,550	(10,000)	(175,050)	(12,090)	(21,730)	(4,410)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	1,590					1,930		1,930	(340)
Other comprehensive income (loss), net of tax	1,900						1,900	1,900
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	(310)			(310)				(310)
Non-cash compensation expense	870			870				870
Exercise of common stock warrants	0	10	(810)	800				0
Ending balance at Sep. 30, 2020	(22,090)	260	9,800	165,910	(10,000)	(173,120)	(10,190)	(17,340)	(4,750)
Beginning balance at Dec. 31, 2020	(23,850)	260	9,510	166,610	(10,000)	(178,530)	(6,540)	(18,690)	(5,160)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(15,150)					(14,810)		(14,810)	(340)
Other comprehensive income (loss), net of tax	(2,290)						(2,290)	(2,290)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	(650)			(650)				(650)
Non-cash compensation expense	960			960				960
Issuance of common stock warrants	16,300		16,300					16,300
Exercise of common stock warrants	420	10	(800)	1,210				420
Ending balance at Mar. 31, 2021	(24,260)	270	25,010	168,130	(10,000)	(193,340)	(8,830)	(18,760)	(5,500)
Beginning balance at Dec. 31, 2020	(23,850)	260	9,510	166,610	(10,000)	(178,530)	(6,540)	(18,690)	(5,160)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(16,960)
Other comprehensive income (loss), net of tax	(4,070)
Ending balance at Sep. 30, 2021	(25,930)	270	25,010	170,050	(10,000)	(194,520)	(10,610)	(19,800)	(6,130)
Beginning balance at Mar. 31, 2021	(24,260)	270	25,010	168,130	(10,000)	(193,340)	(8,830)	(18,760)	(5,500)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	960					1,290		1,290	(330)
Other comprehensive income (loss), net of tax	(130)						(130)	(130)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	10			10				10
Non-cash compensation expense	930			930				930
Ending balance at Jun. 30, 2021	(22,490)	270	25,010	169,070	(10,000)	(192,050)	(8,960)	(16,660)	(5,830)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(2,770)					(2,470)		(2,470)	(300)
Other comprehensive income (loss), net of tax	(1,650)						(1,650)	(1,650)
Shares surrendered upon vesting of employees share based payment awards to cover tax obligations	(10)			(10)				(10)
Non-cash compensation expense	990			990				990
Ending balance at Sep. 30, 2021	$ (25,930)	$ 270	$ 25,010	$ 170,050	$ (10,000)	$ (194,520)	$ (10,610)	$ (19,800)	$ (6,130)

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Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global,” “we,” “our”, 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, primarily in the North American, European and African markets. These products are designed to support aftermarket, automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment servicers (“automotive OESs”) (collectively, “OEs”), retail, e-commerce and industrial customers within the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets. The Company groups its business into operating segments generally by the region in which sales and manufacturing efforts are focused. The Company’s operating segments are Horizon Americas and Horizon Europe-Africa. See Note 14, Segment Information, for further information on the Company’s operating segments.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. It is management’s opinion that these condensed consolidated financial statements contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of financial position and results of operations. Results of operations for interim periods are not necessarily indicative of results for the full year.

U.S. GAAP requires the Company to make certain estimates, judgments, and assumptions. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, sales incentives, sales returns, impairment assessment of indefinite-lived intangible assets, recoverability of long-lived assets, income taxes (including deferred taxes and uncertain tax positions), share-based compensation, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, and depreciation and amortization, are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

XML

New Accounting Pronouncements

9 Months Ended

Sep. 30, 2021

Accounting Standards Update and Change in Accounting Principle [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

New accounting pronouncements not yet adopted

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2021-04”). ASU 2021-04 provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of other accounting standards. Under this guidance, an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. ASU 2021-04 provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2021, with early adoption permitted. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and Other Options,” (“ASC 470-20”) for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for as paid-in capital. For smaller reporting companies, ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2023, with early adoption permitted for fiscal years beginning after December 15, 2020. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for (or recognize the effects of) reference rate reform on financial reporting. The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform initiatives being undertaken in an effort to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The optional amendments of this guidance are effective for all entities upon adoption. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaces the current incurred loss model guidance with a new method that reflects expected credit losses. Under this guidance, an entity would recognize an allowance for credit losses equal to its estimate of expected credit losses on financial assets measured at amortized cost. In November 2019, the FASB extended the effective date of ASU 2016-13 for smaller reporting companies. As a result, ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.

Accounting pronouncements recently adopted

There were no new accounting pronouncements adopted during the nine months ended September 30, 2021.

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Revenues

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenues

RevenuesThe Company disaggregates net sales from contracts with customers by major sales channel. The Company determined that disaggregating its net sales into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The automotive OEM channel represents sales to automotive vehicle manufacturers. The automotive OES channel primarily represents sales to automotive vehicle dealerships. The aftermarket channel represents sales to automotive installers and warehouse distributors. The retail channel represents sales to direct-to-consumer retailers. The e-commerce channel represents sales to retailers whose customers utilize the Internet to purchase the Company’s products. The industrial channel represents sales to non-automotive manufacturers and dealers of agricultural equipment, trailers, and other custom assemblies. The other channel represents sales that do not fit into a category described above and these sales are considered ancillary to the Company’s core operating activities.

The Company’s net sales by segment and disaggregated by major sales channel are as follows:

	Three Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	35,390	$	22,400	$	57,790
Automotive OEM	24,690		34,590		59,280
Automotive OES	3,570		20,790		24,360
Retail	26,460		—		26,460
E-commerce	16,970		1,950		18,920
Industrial	8,770		480		9,250
Other	—		480		480
Total	$	115,850	$	80,690	$	196,540

	Three Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	35,390	$	24,360	$	59,750
Automotive OEM	24,010		42,400		66,410
Automotive OES	2,980		13,820		16,800
Retail	34,290		—		34,290
E-commerce	15,240		630		15,870
Industrial	7,230		550		7,780
Other	—		730		730
Total	$	119,140	$	82,490	$	201,630

	Nine Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	107,640	$	70,950	$	178,590
Automotive OEM	74,860		127,340		202,200
Automotive OES	11,670		56,820		68,490
Retail	81,650		—		81,650
E-commerce	51,220		5,340		56,560
Industrial	27,020		1,660		28,680
Other	—		1,680		1,680
Total	$	354,060	$	263,790	$	617,850

	Nine Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	84,440	$	56,750	$	141,190
Automotive OEM	53,880		104,420		158,300
Automotive OES	5,330		34,000		39,330
Retail	80,690		—		80,690
E-commerce	41,120		1,290		42,410
Industrial	20,120		1,210		21,330
Other	50		2,070		2,120
Total	$	285,630	$	199,740	$	485,370

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill are as follows:

	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Balance at January 1, 2021	$	3,360	$	—	$	3,360
Divestiture of business	(3,340)		—		(3,340)
Foreign currency translation	(20)		—		(20)
Balance at September 30, 2021	$	—	$	—	$	—

Brazil Sale

On June 8, 2021, the Company divested its Brazil business via a share sale (the “Brazil Sale”). Under the terms of the Brazil Sale, the Company disposed all assets and liabilities of its Brazil business, including $3.3 million of goodwill within the Horizon Americas operating segment, for nominal consideration. As a result of the Brazil Sale, the Company recorded a $2.2 million loss during the second quarter of 2021 in other expense, net in the accompanying condensed consolidated statements of operations.

The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows:

	September 30, 2021
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships (2 – 20 years)	$	162,970	$	(136,640)	$	26,330
Technology and other (3 – 15 years)	22,760		(17,280)		5,480
Sub-total	185,730		(153,920)		31,810
Trademark/Trade names, indefinite-lived	21,060		—		21,060
Total	$	206,790	$	(153,920)	$	52,870

	December 31, 2020
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships (2 – 20 years)	$	166,420	$	(135,140)	$	31,280
Technology and other (3 – 15 years)	22,250		(16,710)		5,540
Trademark/Trade names (1 – 8 years)	150		(150)		—
Sub-total	188,820		(152,000)		36,820
Trademark/Trade names, indefinite-lived	21,410		—		21,410
Total	$	210,230	$	(152,000)	$	58,230

Amortization expense related to other intangible assets is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Technology and other, included in cost of sales	$	210	$	280	$	990	$	950
Customer relationships, included in selling, general and administrative expenses	1,040		1,330		3,230		4,090
Total	$	1,250	$	1,610	$	4,220	$	5,040

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Inventories

9 Months Ended

Sep. 30, 2021

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Finished goods	$	89,640	$	58,600
Work in process	15,870		13,070
Raw materials	58,760		43,650
Total	$	164,270	$	115,320

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Property and Equipment, Net

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment, net consists of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Land and land improvements	$	490	$	520
Buildings and improvements	22,760		23,040
Machinery and equipment	142,390		134,750
Gross property and equipment	165,640		158,310
Accumulated depreciation	(92,700)		(84,220)
Total	$	72,940	$	74,090

Depreciation expense is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Depreciation expense, included in cost of sales	$	3,720	$	3,920	$	10,850	$	10,330
Depreciation expense, included in selling, general and administrative expenses	240		90		860		780
Total	$	3,960	$	4,010	$	11,710	$	11,110

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Accrued and Other Long-term Liabilities

9 Months Ended

Sep. 30, 2021

Accrued Liabilities [Abstract]

Accrued and Other Long-term Liabilities

Accrued and Other Long-term Liabilities

Accrued liabilities consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Customer incentives	$	14,730	$	15,870
Accrued compensation	11,020		12,130
Short-term tax liabilities	4,920		5,570
Customer claims	3,830		6,520
Accrued professional services	1,760		1,510
Litigation settlements	1,150		1,600
Restructuring	120		650
Deferred purchase price	—		1,370
Other	15,810		13,880
Total	$	53,340	$	59,100

Other long-term liabilities consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Litigation settlements	$	2,320	$	2,930
Long-term tax liabilities	330		130
Deferred purchase price	—		1,650
Restructuring	—		1,070
Other	7,980		8,780
Total	$	10,630	$	14,560

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Long-term Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

The Company’s long-term debt consists of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Revolving Credit Facility	$	44,910	$	24,230
Senior Term Loan	100,000		—
Replacement Term Loan	—		90,210
Convertible Notes	125,000		125,000
Paycheck Protection Program Loan	8,670		8,670
Bank facilities, capital leases and other long-term debt	17,700		17,970
Gross debt	296,280		266,080
Less:
Short-term borrowings and current maturities, long-term debt	5,940		14,120
Gross long-term debt	290,340		251,960
Unamortized debt issuance costs and discount:
Unamortized debt issuance costs and original issuance discount on Senior Term Loan	(22,870)		—
Unamortized debt issuance costs and original issuance discount on Replacement Term Loan	—		(9,100)
Unamortized debt issuance costs and discount on Convertible Notes	(6,130)		(11,470)
Total	(29,000)		(20,570)
Long-term debt	$	261,340	$	231,390

ABL Facility

In December 2015, the Company entered into an Amended and Restated Loan Agreement with certain subsidiaries of the Company party thereto as guarantors, the lenders party thereto and Bank of America, N.A., as agent for the lenders, under which the lenders party thereto agreed to provide the Company and certain of its subsidiaries with a committed asset-based revolving credit facility (the “ABL Facility”) providing for revolving loans. The Amended and Restated Loan Agreement was subsequently amended on several occasions and as a result, the effective facility size was $80.0 million.

In March 2020, the Company paid in full all outstanding debt incurred under the ABL Facility, which the Company accounted for as a debt extinguishment in accordance with guidance in ASC 405-20, “Extinguishment of Liabilities”. As a result of the debt extinguishment, during the nine months ended September 30, 2020, the Company recognized $0.8 million of unamortized debt issuance costs in interest expense and $0.6 million of additional costs in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50, “Modifications and Extinguishments” (“ASC 470-50”).

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and nine months ended September 30, 2020, the Company recognized no amortization of debt issuance costs and $0.4 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

Revolving Credit Facility

In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers (the “ABL Borrowers”).

The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of $75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million.

In May 2020, the Company entered into amendments, limited waivers and consents in connection with the Loan Agreement, with an effective date of April 1, 2020, that, among other things, consented to the Company’s applying for, obtaining and incurring the PPP Loan, as defined and described below.

In February 2021, the Company entered into a limited consent of the Loan Agreement, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement, as defined and described below.

In April 2021, the Company entered into an amendment to the Loan Agreement, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility to $85.0 million. The amendment also increased sub-limits relating to the Company’s ability to borrow against in-transit inventory as well as inventory located in the Company’s Mexico facilities.

On September 17, 2021, the Company entered into an amendment to the Loan Agreement, that among other modifications, increased the maximum amount of credit available under the Revolving Credit Facility to $95.0 million. The amendment also increased the Company’s ability to borrow against receivables and sub-limits relating to in-transit inventory and inventory located in the Company’s Mexico facilities. The increased borrowing capacity against receivables and inventory is effective through December 31, 2021.

Interest on the loans under the Loan Agreement is payable in cash at the interest rate of LIBOR plus 4.00% per annum, subject to a 1.00% LIBOR floor, provided that if for any reason the loans are converted to base rate loans, interest will be paid in cash at the customary base rate plus a margin of 3.00% per annum. All interest, fees, and other monetary obligations due may, at Encina’s discretion, but upon prior notice to the ABL Borrowers, be charged to the loan account and thereafter be deemed to be part of the Revolving Credit Facility subject to the same interest rate. There are no amortization payments required under the Loan Agreement. All outstanding borrowings under the Loan Agreement mature on March 13, 2023.

All of the indebtedness under the Loan Agreement is and will be guaranteed by the Company and certain of the Company’s existing and future North American subsidiaries and is and will be secured by substantially all of the assets of the Company, such other guarantors, and the ABL Borrowers.

The Loan Agreement also contains a financial covenant that stipulates the ABL Borrowers and guarantors under the Loan Agreement will not make capital expenditures exceeding $30.0 million during any fiscal year.

Debt issuance costs of $2.3 million were incurred in connection with the Loan Agreement. These debt issuance costs will be amortized into interest expense over the contractual term of the Loan Agreement.

During the three and nine months ended September 30, 2021, the Company recognized $0.1 million and $0.4 million of amortization of debt issuance costs, respectively, and during the three and nine months ended September 30, 2020, the Company recognized $0.2 million and $0.9 million of amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

As of September 30, 2021 and December 31, 2020, there was $1.0 million and $1.1 million, respectively, of unamortized debt issuance costs included in other assets in the accompanying condensed consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, there was $44.9 million and $24.2 million outstanding, respectively, under the Revolving Credit Facility, with a weighted average interest rate of 5.3% and 5.0%, respectively. As of September 30, 2021 and December 31, 2020, the Company had $37.5 million and $38.4 million of availability, respectively, under the Revolving Credit Facility.

As of September 30, 2021 and December 31, 2020, the Company had $2.1 million and $3.1 million, respectively, of letters of credit issued and outstanding, under the Revolving Credit Facility with no cash collateral requirement. As of September 30, 2021 and December 31, 2020, respectively, the Company also had $4.2 million and $4.9 million of other letters of credit issued and outstanding, under the Revolving Credit Facility with a cash collateral requirement. The cash collateral requirement is 105% of the outstanding letters of credit. As of September 30, 2021 and December 31, 2020, the Company had cash collateral, of $4.9 million and $5.1 million, respectively. Cash collateral is presented in restricted cash in the accompanying condensed consolidated balance sheets.

First Lien Term Loan Agreement

In June 2015, the Company entered into a credit agreement among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A. (the “Term Loan Agreement”) under which the Company borrowed an aggregate of $200.0 million (the “Original Term B Loan”). The Term Loan Agreement was subsequently amended and restated on several occasions and is collectively referred to as the “First Lien Term Loan Agreement”. The Original Term B Loan was also subsequently amended on several occasions and is collectively referred to as the “First Lien Term Loan”.

In May 2020, the Company entered into an amendment, limited waiver and consent to credit agreement with an effective date of April 1, 2020, to amend the First Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan, as defined and described below.

As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest was replaced by the Replacement Term Loan, as defined and described below.

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and nine months ended September 30, 2020, the Company recognized no and $0.2 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

During the three and nine months ended September 30, 2021, the Company recognized no paid-in-kind (“PIK”) interest and during the three and nine months ended September 30, 2020, the Company recognized no and $0.4 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations.

Second Lien Term Loan Agreement

In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto. The Second Lien Term Loan Agreement provided for a term loan facility in the aggregate principal amount of $51.0 million.

In May 2020, the Company entered into an amendment, limited waiver and consent to credit agreement with an effective date of April 1, 2020, to amend the Second Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan, as defined and described below.

As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest was replaced by the Replacement Term Loan, as defined and described below.

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and during the three and nine months ended September 30, 2020, the Company recognized no and $2.7 million amortization of debt issuance costs, respectively, in the accompanying condensed consolidated statements of operations.

During the three and nine months ended September 30, 2021, the Company recognized no PIK interest and during the three and nine months ended September 30, 2020, the Company recognized $0.1 million and $3.4 million of PIK interest, respectively, in the accompanying condensed consolidated statements of operations.

Replacement Term Loan

In July 2020, the Company entered into the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon.

The interest on the Replacement Term Loan was LIBOR plus 10.75% per annum, subject to a 1.00% LIBOR floor, of which 4.00% was payable in cash and the remainder of which was PIK interest (provided that the Company may elect on not more than one occasion to pay all interest as PIK interest). The Eleventh Amendment provided for a 1.00% PIK closing fee, which was added to the principal amount of the Replacement Term Loan on the closing date and provided for a prepayment penalty on the entire principal amount of the Replacement Term Loan in an amount equal to 3.0% of the aggregate principal amount prepaid prior to December 31, 2021.

In February 2021, the Company entered into the Senior Term Loan Credit Agreement, as defined and described below. The proceeds received from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan. As a result of the repayment, the Term Loan Agreement was terminated and is no longer in effect. During the nine months ended September 30, 2021, the Company recognized $11.7 million as loss on debt extinguishment in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50. Included in the loss was $8.9 million of unamortized debt issuance and other costs and a $2.8 million prepayment penalty.

During the three and nine months ended September 30, 2020, the Company recognized $0.2 million of additional costs in selling, general and administrative expense in the accompanying condensed consolidated statements of operations, in accordance with ASC 470-50.

During the three and nine months ended September 30, 2021, the Company recognized no amortization of debt issuance costs and $0.4 million amortization of debt issuance costs, respectively, and during the three and nine months ended September 30, 2020, the Company recognized $1.2 million amortization of debt issuance costs in the accompanying condensed consolidated statements of operations.

As of December 31, 2020, the Company had total unamortized debt issuance and discount costs of $9.1 million, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

During the three and nine months ended September 30, 2021, the Company recognized no PIK interest and $0.7 million of PIK interest, respectively, and during the three and nine months ended September 30, 2020, the Company recognized $2.5 million PIK interest in the accompanying condensed consolidated statements of operations.

As of December 31, 2020, the Company had $90.2 million of aggregate principal outstanding.

Senior Term Loan Credit Agreement

On February 2, 2021, the Company entered into a credit agreement (the “Senior Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the lenders party thereto (collectively, the “Lenders”). The Senior Term Loan Credit Agreement provides for an initial term loan facility in the aggregate principal amount of $100.0 million, all of which has been borrowed by the Company and was used to repay the Replacement Term Loan, as described above, and a delayed draw term loan facility in the aggregate principal amount of up to $125.0 million, which may be drawn by the Company in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the delayed draw term loan facility.

Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor. The Senior Term Loan Credit Agreement includes customary affirmative and negative covenants, including a maximum total net leverage ratio requirement tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make capital expenditures exceeding $27.5 million during any fiscal year. To the extent that the amount of capital expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for capital expenditures in the immediately succeeding fiscal year.

Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings under the Senior Term Loan Credit Agreement mature on February 2, 2027.

All of the indebtedness under the Senior Term Loan Credit Agreement is and will be guaranteed by the Company’s existing and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.

Pursuant to the Senior Term Loan Credit Agreement, the Company issued warrants (the “Senior Term Loan Warrants”) to Atlantic Park to purchase in the aggregate up to 3,905,486 shares of the Company’s common stock, with an exercise price of $9.00 per share, subject to adjustment as provided in the Senior Term Loan Warrants. The Senior Term Loan Warrants are exercisable at any time prior to February 2, 2026.

In accordance with guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging”, the Senior Term Loan Credit Agreement and the Senior Term Loan Warrants are each freestanding instruments and proceeds were allocated to each instrument on a relative fair value basis of $82.4 million and $17.6 million, respectively.

The Senior Term Loan Warrants are not within the scope of ASC 480 and do not meet the criteria for liability classification. However, the Senior Term Loan Warrants are determined to be indexed to the Company’s common stock and meet the requirements for equity classification pursuant to ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity”. The $17.6 million allocated to the Senior Term Loan Warrants was determined using an option pricing method and is recorded in common stock warrants in the accompanying condensed consolidated balance sheets.

Debt issuance costs of $5.4 million and original issue discount of $3.0 million were incurred in connection with entry into the Senior Term Loan Credit Agreement. The total costs of $8.4 million were allocated to each instrument on a relative fair value basis. The $7.1 million allocated to the Senior Term Loan Credit Agreement will be amortized into interest expense over the contractual term of the loan using the effective interest method and the $1.3 million allocated to the Senior Term Loan Warrants was recorded as a reduction of equity.

The Company determined the fair value of the Senior Term Loan Credit Agreement using a discount rate build up approach. The debt discount of $17.6 million created by the relative fair value allocation of the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the loan. The debt discount is recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

During the three and nine months ended September 30, 2021, the Company recognized $0.7 million and $1.8 million, respectively, of amortization of debt issuance and discount costs in the accompanying condensed consolidated statements of operations.

As of September 30, 2021, the Company had total unamortized debt issuance and discount costs of $22.9 million, all of which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

As of September 30, 2021, the Company had $100.0 million aggregate principal outstanding.

Convertible Notes

In February 2017, the Company completed a public offering of 2.75% Convertible Senior Notes (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year, beginning on July 1, 2017. The Convertible Notes are convertible into 5,005,000 shares of the Company’s common stock, based on an initial conversion price of $24.98 per share. The Convertible Notes will mature on July 1, 2022 unless earlier converted. In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”) in privately negotiated transactions with certain of the underwriters or their affiliates (in this capacity, the “option counterparties”). The Convertible Note Hedges provide the Company with the option to acquire, on a net settlement basis, 5,005,000 shares of its common stock, which is equal to the number of shares of common stock that notionally underlie the Convertible Notes, at a strike price of $24.98, which corresponds to the conversion price of the Convertible Notes. The Convertible Note Hedges have an expiration date that is the same as the maturity date of the Convertible Notes, subject to earlier exercise. The Convertible Note Hedges have customary anti-dilution provisions similar to the Convertible Notes.

The Convertible Notes were not convertible during the third quarter of 2021, as no conditions allowing holders of the Convertible Notes to convert have been met. Should conditions allowing holders of the Convertible Notes to convert be met in a future quarter, the Convertible Notes will be convertible at their holders’ option during the immediately following quarter. As of September 30, 2021, the if-converted value of the Convertible Notes did not exceed the principal value of those Convertible Notes.

Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. Because the Company may elect to settle conversion in cash, the Company separated the Convertible Notes into their liability and equity components by allocating the issuance proceeds to each of those components in accordance with ASC 470-20. The Company first determined the fair value of the liability component by estimating the value of a similar liability that does not have an associated equity component. The Company then deducted that amount from the issuance proceeds to arrive at a residual amount, which represents the equity component. The Company accounted for the equity component as a debt discount (with an offset to paid-in capital in excess of par value). The debt discount created by the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the Convertible Notes ending on July 1, 2022.

During the three and nine months ended September 30, 2021, the Company recognized total interest expense of $2.6 million and $7.9 million and during the three and nine months ended September 30, 2020, the Company recognized total interest expense of $2.5 million and $7.6 million, respectively, in the accompanying condensed consolidated statements of operations. The interest expense recognized consists of contractual interest coupon, amortization of debt discount and amortization of debt issuance costs on the Convertible Notes, and is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Contractual interest coupon on convertible debt	$	860	$	860	$	2,580	$	2,600
Amortization of debt issuance costs	130		130		400		400
Amortization of "equity discount" related to debt	1,640		1,510		4,940		4,550
Total	$	2,630	$	2,500	$	7,920	$	7,550

As a result of the Company’s Senior Term Loan Agreement entered into in February 2021, which includes the delayed draw term loan facility described above, the Company has the ability and intent to refinance the Convertible Notes, which mature on July 1, 2022.

As of September 30, 2021 and December 31, 2020, the Company had total unamortized debt issuance and discount costs of $6.1 million and $11.5 million, respectively, which were recorded as a reduction of long-term debt in the accompanying condensed consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, the Company had $125.0 million of aggregate principal outstanding.

Paycheck Protection Program Loan

In April 2020, Horizon Global Company LLC (the “U.S. Borrower”), a direct U.S.-based subsidiary of the Company, received a loan from PNC Bank, National Association for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES Act.

The Company submitted its PPP Loan application in good faith in accordance with the CARES Act and the guidance issued by the Small Business Administration (the “SBA”), including the SBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and sized based criteria of the program.

As of September 30, 2021, the Company’s application of loan forgiveness of $7.1 million of the $8.7 million of funds originally received is subject to the SBA’s final determination of forgiveness, which we expect to receive in the fourth quarter of 2021, based on the review timelines once a borrower has submitted its application in accordance with the issued regulations. The potential loan forgiveness is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of the loan has an interest rate of 1.0% per annum. In July 2021, the note was amended to make the unforgiven portion payable over five years on a monthly basis. The Company has deferred interest payments until the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and Treasury and the terms of the Company’s PPP Loan. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of $7.1 million of our PPP Loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.

Covenant and Liquidity Matters

The Company is in compliance with all of its financial covenants as of September 30, 2021.

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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

Leases

The Company leases certain facilities, automobiles and equipment under non-cancellable operating leases. Our leases have remaining lease terms of one to seven years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Most leases include one or more options to renew. The exercise of lease renewal options is typically at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in the lease term. The Company combines lease and non-lease components, which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Refer to Note 3, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2020, for more information.

Supplemental information for the Company’s leases is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Operating lease cost	$	3,040	$	4,260	$	10,670	$	11,460

	Nine Months Ended September 30,
	2021		2020
Operating cash flows from operating leases	$	9,980	$	12,060
ROU assets obtained in exchange for operating lease obligations	$	910	$	4,080

	September 30, 2021		December 31, 2020
Weighted average remaining lease term (years)	5.2		6.0
Weighted average discount rate	8.4	%	8.4	%

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Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

In April 2020, the Company agreed to a settlement (the “Settlement”) related to certain intellectual property infringement claims made against one of the Company’s subsidiaries in its Horizon Europe-Africa operating segment. The Company settled all historical and future associated claims for $4.4 million to be paid evenly in semi-annual installments on June 30 and December 31 of each year through December 31, 2024. As a result of the Settlement, the Company recorded a $1.5 million charge during the first quarter of 2020 in cost of sales of the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2021, the Company recorded $0.2 million and $0.5 million of royalties, respectively, and during the three and nine months ended September 30, 2020, the Company recorded $0.2 million and $0.4 million of royalties, respectively, all of which were recorded in cost of sales in the accompanying condensed consolidated statements of operations.

As of September 30, 2021 and December 31, 2020, the Company had recorded $0.9 million and $0.9 million, respectively, in prepaid expenses and other current assets and $1.2 million and $1.8 million, respectively, in other assets, in the accompanying condensed consolidated balance sheets related to the royalties to be recognized by the Company over the life of future programs connected to the Settlement. In addition, as of September 30, 2021 and December 31, 2020, the Company had $0.9 million and $1.0 million, respectively, in accrued liabilities and $2.3 million and $2.9 million, respectively, in other long-term liabilities, in the accompanying condensed consolidated balance sheets related to the remaining semi-annual installment payments.

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Earnings (Loss) per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings (Loss) per Share

Earnings (Loss) per Share

Basic earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding. Diluted earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding, adjusted to give effect to the assumed exercise of outstanding stock options and warrants, vesting of restricted shares outstanding, and conversion of the Convertible Notes, where dilutive to earnings per share.

A reconciliation of the numerator and the denominator of basic income (loss) per share attributable to Horizon Global and diluted income (loss) per share attributable to Horizon Global is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands, except for per share amounts)
Numerator:
Net (loss) income from continuing operations	$	(2,770)	$	1,590	$	(16,960)	$	(31,660)
Add: Loss from discontinued operations, net of income tax	—		—		—		(500)
Less: Net loss attributable to noncontrolling interest	(300)		(340)		(970)		(1,010)
Net (loss) income attributable to Horizon Global	$	(2,470)	$	1,930	$	(15,990)	$	(31,150)
Denominator:
Weighted average shares outstanding, basic	27,286,600		25,939,741		27,019,554		25,651,789
Dilutive effect of common stock equivalents	—		7,389,365		—		—
Weighted average shares outstanding, diluted	27,286,600		33,329,106		27,019,554		25,651,789
Basic (loss) income per share attributable to Horizon Global
Continuing operations	$	(0.09)	$	0.07	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.07	$	(0.59)	$	(1.21)
Diluted (loss) income per share attributable to Horizon Global
Continuing operations	$	(0.09)	$	0.06	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.06	$	(0.59)	$	(1.21)

As a result of the net loss from continuing operations for the three months ended September 30, 2021 and nine months ended September 30, 2021 and 2020, the effect of certain dilutive securities was excluded from the computation of weighted average diluted shares outstanding, as inclusion would have resulted in anti-dilution. A summary of these anti-dilutive common stock equivalents are as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Number of options	18,961	18,961	18,961	18,961
Exercise price of options	$9.20 - $11.02	$9.20 - $11.02	$9.20 - $11.02	$9.20 - $11.02
Restricted stock units	1,761,463	—	1,863,498	1,820,186
Convertible Notes	5,005,000	5,005,000	5,005,000	5,005,000
Convertible Notes warrants	5,005,000	5,005,000	5,005,000	5,005,000
Common stock warrants	9,231,146	—	8,810,164	6,376,519

For purposes of determining diluted loss per share, the Company has elected a policy to assume that the principal portion of the Convertible Notes, as described in Note 8, Long-term Debt, is settled in cash and the conversion premium is settled in shares. Therefore, the Company has adopted a policy of calculating the diluted loss per share effect of the Convertible Notes using the treasury stock method. As a result, the dilutive effect of the Convertible Notes is limited to the conversion premium, which is reflected in the calculation of diluted loss per share as if it were a freestanding written call option on the Company’s shares. Using the treasury stock method, the warrants issued in connection with the issuance of the Convertible Notes are considered to be dilutive when they are in the money relative to the Company’s average common stock price during the period. The Convertible Note Hedges purchased in connection with the issuance of the Convertible Notes are always considered to be anti-dilutive and therefore do not impact the Company’s calculation of diluted loss per share.

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Equity Awards

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Equity Awards

Equity Awards

Description of the Plans

In June 2020, the shareholders approved the Horizon Global Corporation 2020 Equity and Incentive Compensation Plan (the “Horizon 2020 Plan”). Horizon employees, non-employee directors and certain consultants participate in the Horizon 2020 Plan. The Horizon 2020 Plan authorizes the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), appreciation rights, restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, dividend equivalents and certain other awards based upon terms and conditions described in the Horizon 2020 Plan. No more than 4.1 million Horizon common shares may be delivered under the Horizon 2020 Plan, plus (A) the total number of shares remaining available for awards under the Horizon 2015 Plan, as defined and described below, as of June 19, 2020, plus (B) the shares that are subject to awards granted under the Horizon 2020 Plan or the Horizon 2015 Plan that are added (or added back, as applicable) to the aggregate number of shares available under the Horizon 2020 Plan pursuant to the share counting rules of the Horizon 2020 Plan. These shares may be shares of original issuance or treasury shares, or a combination of both.

Prior to the Horizon 2020 Plan, employees and non-employee directors participated in the Horizon Global Corporation 2015 Equity and Incentive Compensation Plan (as amended and restated, the “Horizon 2015 Plan”). The Horizon 2015 Plan authorized the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, and certain other awards based on or related to our common stock to Horizon employees and non-employee directors.

Stock Options

Horizon’s stock option activity is as follows:

	Number of Stock Options	Weighted Average Exercise Price		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	18,961	$	10.43
Granted	—	—
Exercised	—	—
Canceled, forfeited	—	—
Expired	—	—
Outstanding at September 30, 2021	18,961	$	10.43	4.2	$	—

As of September 30, 2021, there was no unrecognized compensation cost related to stock options. During the three and nine months ended September 30, 2021 and 2020, there was no stock-based compensation expense recognized by the Company related to stock options. As of September 30, 2021, the aggregate intrinsic value of outstanding stock options was immaterial. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Restricted Stock Units

During the nine months ended September 30, 2021, the Company granted an aggregate of 532,899 restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain key employees and non-employee directors. The total grants consisted of: (i) 83,482 RSUs that vested during the period; (ii) 153,563 time-based RSUs vesting on a ratable basis on March 1, 2022, March 1, 2023 and March 1, 2024; (iii) 230,350 PSUs vesting on April 1, 2024 and (iv) 65,504 time-based RSUs vesting on May 28, 2022.

During 2020, the Company granted an aggregate of 1,502,072 RSUs and PSUs to certain key employees and non-employee directors. The total grants consisted of: (i) 284,859 time-based RSUs vesting on a ratable basis on March 3, 2021, March 3, 2022 and March 3, 2023; (ii) 277,228 time-based RSUs vesting on June 24, 2021; (iii) 21,351 time-based RSUs vesting on a ratable basis on April 2, 2021, March 3, 2022 and March 3, 2023 and (iv) 918,634 PSUs vesting on March 3, 2023.

The performance criteria for the PSUs granted is based on the Company’s three-year cumulative EBITDA. The grant date fair values for the PSUs and RSUs are based on the closing trading price of the Company’s common stock on the date of grant.

The grant date fair value of RSUs is expensed over the vesting period. Changes in the number of RSUs outstanding for the nine months ended September 30, 2021 are as follows:

	Number of Restricted Stock Units(a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020	1,800,682	$	3.14
Granted	532,899	8.98
Vested	(499,826)	2.64
Canceled, forfeited	(71,669)	5.00
Outstanding at September 30, 2021	1,762,086	$	4.97

(a)Includes PSUs at 100% attainment.

As of September 30, 2021, there was $4.8 million in unrecognized compensation costs related to unvested RSUs that is expected to be recognized over a weighted-average period of 2.0 years.

During the three and nine months ended September 30, 2021, the Company recognized $0.9 million and $2.6 million, respectively, of stock-based compensation expense related to RSUs, and during the three and nine months ended September 30, 2020, the Company recognized $0.9 million and $2.2 million, respectively, of stock-based compensation expense related to RSUs. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2021

Other Comprehensive Income [Abstract]

Shareholders' Equity

Shareholders’ Equity

Preferred Stock

The Company is authorized to issue 100,000,000 shares of preferred stock, par value of $0.01 per share. As of September 30, 2021 and December 31, 2020, there were no preferred shares outstanding.

Common Stock

The Company is authorized to issue 400,000,000 shares of Horizon Global common stock, par value of $0.01 per share. As of September 30, 2021, there were 27,973,153 shares of common stock issued and 27,286,647 shares of common stock outstanding. As of December 31, 2020, there were 27,089,673 shares of common stock issued and 26,403,167 shares of common stock outstanding.

Common Stock Warrants

In March 2019, in connection with the Second Lien Term Loan, the Company became obligated to issue detachable warrants to purchase up to 6.25 million shares of the Company’s common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $1.50 per share.

In February 2021, in connection with the Senior Term Loan Credit Agreement, the Company issued the Senior Term Loan Warrants to purchase up to 3,905,486 shares of the Company’s common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $9.00 per share. See Note 8, Long-term Debt, for additional information.

As of September 30, 2021, warrants to purchase 1,228,490 shares of the Company’s common stock have been exercised, resulting in the issuance of 972,924 shares of the Company’s common stock. As of September 30, 2021, warrants to purchase 9,231,146 shares of the Company’s common stock were issued and remain outstanding. During the nine months ended September 30, 2021, a related-party entity, JKI Holdings, LLC, an entity owned by the chair of our board of directors, exercised in full the warrants that it originally received in connection with the March 2019 issuance described above, and paid the exercise price in cash and received 278,283 shares of common stock. During the nine months ended September 30, 2021, the Company recognized $0.3 million of non-cash transactions in connection with warrants exercised.

Accumulated Other Comprehensive Income (Loss) (“AOCI”)

The change in AOCI attributable to Horizon Global by component, net of tax, for the nine months ended September 30, 2021 is as follows:

	Foreign Currency Translation and Other
	(dollars in thousands)
Balance at January 1, 2021	$	(6,540)
Net unrealized losses arising during the period	(4,070)
Net change	(4,070)
Balance at September 30, 2021	$	(10,610)

The change in AOCI attributable to Horizon Global by component, net of tax, for the nine months ended September 30, 2020 is as follows:

	Foreign Currency Translation and Other
	(dollars in thousands)
Balance at January 1, 2020	$	(9,790)
Net unrealized losses arising during the period	(400)
Net change	(400)
Balance at September 30, 2020	$	(10,190)

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Segment Information

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company groups its business into operating segments generally by the region in which sales and manufacturing efforts are focused, which are grouped on the basis of similar product, market and operating factors. Each operating segment has discrete financial information evaluated regularly by the Company’s chief operating decision maker in determining resource allocation and assessing performance. The Company reports the results of its business in two operating segments: Horizon Americas and Horizon Europe-Africa. Horizon Americas is comprised of the Company’s North American operations, and prior to the Brazil Sale also included the Company’s South American operations. Horizon Europe-Africa is comprised of the Company’s European and South African operations. See below for further information regarding the types of products and services provided within each operating segment.

The Company previously had a third operating segment, Horizon Asia-Pacific (“APAC”); however, the APAC segment was sold on September 19, 2019, and is presented as a discontinued operation in the accompanying condensed consolidated financial statements. During the first quarter of 2020, the remaining post-closing conditions of the sale were completed, resulting in a true up to net cash proceeds, which were recognized as a loss on sale of discontinued operations of $0.5 million in accordance with Accounting Standards Codification 205, “Discontinued Operations”.

Horizon Americas - A market leader in the design, manufacture and distribution of a wide variety of high-quality, custom engineered towing, trailering and cargo management products and related accessories. These products are designed to support automotive OEMs, automotive OESs, aftermarket and retail customers in the agricultural, automotive, construction, industrial, marine, military, recreational vehicle, trailer and utility end markets. Products include brake controllers, cargo management, heavy-duty towing products, jacks and couplers, protection/securing systems, trailer structural and electrical components, tow bars, vehicle roof racks, vehicle trailer hitches and additional accessories.

Horizon Europe‑Africa - With a product offering similar to Horizon Americas, Horizon Europe-Africa focuses its sales and manufacturing efforts in the Europe and Africa regions of the world.

The Company’s operating segment activity is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Net Sales
Horizon Americas	$	115,850	$	119,140	$	354,060	$	285,630
Horizon Europe-Africa	80,690		82,490		263,790		199,740
Total	$	196,540	$	201,630	$	617,850	$	485,370
Operating Profit (Loss)
Horizon Americas	$	12,400	$	13,170	$	41,000	$	19,330
Horizon Europe-Africa	(150)		2,440		2,550		(6,040)
Corporate	(5,920)		(7,050)		(19,110)		(19,380)
Total	$	6,330	$	8,560	$	24,440	$	(6,090)

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Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. Effective tax rates vary from period to period as separate calculations are performed for those countries where the Company's operations are profitable and whose results continue to be tax-effected and for those countries where full deferred tax valuation allowances exist and are maintained. In determining the estimated annual effective tax rate, the Company analyzes various factors, including but not limited to, forecasts of projected annual earnings, taxing jurisdictions in which the pretax income and/or pretax losses will be generated, available tax planning strategies.

During the three and nine months ended September 30, 2021, the effective income tax rate was (17.4)% and (19.9)%, respectively. During the three and nine months ended September 30, 2020, the effective income tax rate was 5.9% and (0.5)%, respectively. The differences in the effective tax rate compared to the statutory tax rate is attributable to the valuation allowance recorded in the U.S. and several foreign jurisdictions, which resulted in no income tax benefit recognized for jurisdictional pretax losses, and therefore, are excluded from the estimated effective tax rate.

The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance is necessary. Full valuation allowances that are recorded for deferred tax assets in the U.S. and certain foreign jurisdictions will be maintained until sufficient positive evidence exists to reduce or eliminate them. The factors considered by management in its determination of the probability of the realization of the deferred tax assets include, but are not limited to, recent historical financial results, historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, tax planning strategies. If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. The Company has recently experienced pre-tax losses. As of September 30, 2021, the Company believes that it is more likely than not that the recorded deferred tax assets will be realized.

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Other (Expense) Income, Net

9 Months Ended

Sep. 30, 2021

Other Income and Expenses [Abstract]

Other (Expense) Income, Net

Other (Expense) Income, Net

Other (expense) income, net consists of the following components:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Foreign currency (loss) gain	$	(1,370)	$	1,080	$	(3,020)	$	(670)
Customer pay discounts	(280)		(420)		(780)		(960)
Loss on sale of business	—		—		(2,230)		—
Other, net	(70)		30		90		200
Total	$	(1,720)	$	690	$	(5,940)	$	(1,430)

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New Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Standards Update and Change in Accounting Principle [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

New accounting pronouncements not yet adopted

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2021-04”). ASU 2021-04 provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of other accounting standards. Under this guidance, an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. ASU 2021-04 provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2021, with early adoption permitted. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and Other Options,” (“ASC 470-20”) for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for as paid-in capital. For smaller reporting companies, ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2023, with early adoption permitted for fiscal years beginning after December 15, 2020. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for (or recognize the effects of) reference rate reform on financial reporting. The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform initiatives being undertaken in an effort to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The optional amendments of this guidance are effective for all entities upon adoption. We are currently assessing the impact of this update on the Company’s condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaces the current incurred loss model guidance with a new method that reflects expected credit losses. Under this guidance, an entity would recognize an allowance for credit losses equal to its estimate of expected credit losses on financial assets measured at amortized cost. In November 2019, the FASB extended the effective date of ASU 2016-13 for smaller reporting companies. As a result, ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted. The standard is not expected to have a significant impact on the Company's condensed consolidated financial statements.

Accounting pronouncements recently adopted

There were no new accounting pronouncements adopted during the nine months ended September 30, 2021.

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Revenues (Tables)

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Net Sales Disaggregated by Major Sales Channels

The Company’s net sales by segment and disaggregated by major sales channel are as follows:

	Three Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	35,390	$	22,400	$	57,790
Automotive OEM	24,690		34,590		59,280
Automotive OES	3,570		20,790		24,360
Retail	26,460		—		26,460
E-commerce	16,970		1,950		18,920
Industrial	8,770		480		9,250
Other	—		480		480
Total	$	115,850	$	80,690	$	196,540

	Three Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	35,390	$	24,360	$	59,750
Automotive OEM	24,010		42,400		66,410
Automotive OES	2,980		13,820		16,800
Retail	34,290		—		34,290
E-commerce	15,240		630		15,870
Industrial	7,230		550		7,780
Other	—		730		730
Total	$	119,140	$	82,490	$	201,630

	Nine Months Ended September 30, 2021
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	107,640	$	70,950	$	178,590
Automotive OEM	74,860		127,340		202,200
Automotive OES	11,670		56,820		68,490
Retail	81,650		—		81,650
E-commerce	51,220		5,340		56,560
Industrial	27,020		1,660		28,680
Other	—		1,680		1,680
Total	$	354,060	$	263,790	$	617,850

	Nine Months Ended September 30, 2020
	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Net Sales
Aftermarket	$	84,440	$	56,750	$	141,190
Automotive OEM	53,880		104,420		158,300
Automotive OES	5,330		34,000		39,330
Retail	80,690		—		80,690
E-commerce	41,120		1,290		42,410
Industrial	20,120		1,210		21,330
Other	50		2,070		2,120
Total	$	285,630	$	199,740	$	485,370

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Changes in the carrying amount of goodwill are as follows:

	Horizon Americas		Horizon Europe-Africa		Total
	(dollars in thousands)
Balance at January 1, 2021	$	3,360	$	—	$	3,360
Divestiture of business	(3,340)		—		(3,340)
Foreign currency translation	(20)		—		(20)
Balance at September 30, 2021	$	—	$	—	$	—

Schedule of Intangible Assets (excluding Goodwill) by Major Class

The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows:

	September 30, 2021
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships (2 – 20 years)	$	162,970	$	(136,640)	$	26,330
Technology and other (3 – 15 years)	22,760		(17,280)		5,480
Sub-total	185,730		(153,920)		31,810
Trademark/Trade names, indefinite-lived	21,060		—		21,060
Total	$	206,790	$	(153,920)	$	52,870

	December 31, 2020
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships (2 – 20 years)	$	166,420	$	(135,140)	$	31,280
Technology and other (3 – 15 years)	22,250		(16,710)		5,540
Trademark/Trade names (1 – 8 years)	150		(150)		—
Sub-total	188,820		(152,000)		36,820
Trademark/Trade names, indefinite-lived	21,410		—		21,410
Total	$	210,230	$	(152,000)	$	58,230

Schedule of Finite-Lived Intangible Assets, Amortization Expense

Amortization expense related to other intangible assets is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Technology and other, included in cost of sales	$	210	$	280	$	990	$	950
Customer relationships, included in selling, general and administrative expenses	1,040		1,330		3,230		4,090
Total	$	1,250	$	1,610	$	4,220	$	5,040

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Inventories (Tables)

9 Months Ended

Sep. 30, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Finished goods	$	89,640	$	58,600
Work in process	15,870		13,070
Raw materials	58,760		43,650
Total	$	164,270	$	115,320

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Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net consists of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Land and land improvements	$	490	$	520
Buildings and improvements	22,760		23,040
Machinery and equipment	142,390		134,750
Gross property and equipment	165,640		158,310
Accumulated depreciation	(92,700)		(84,220)
Total	$	72,940	$	74,090

Depreciation Expense

Depreciation expense is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Depreciation expense, included in cost of sales	$	3,720	$	3,920	$	10,850	$	10,330
Depreciation expense, included in selling, general and administrative expenses	240		90		860		780
Total	$	3,960	$	4,010	$	11,710	$	11,110

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Accrued and Other Long-term Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Accrued Liabilities [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Customer incentives	$	14,730	$	15,870
Accrued compensation	11,020		12,130
Short-term tax liabilities	4,920		5,570
Customer claims	3,830		6,520
Accrued professional services	1,760		1,510
Litigation settlements	1,150		1,600
Restructuring	120		650
Deferred purchase price	—		1,370
Other	15,810		13,880
Total	$	53,340	$	59,100

Other long-term liabilities consist of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Litigation settlements	$	2,320	$	2,930
Long-term tax liabilities	330		130
Deferred purchase price	—		1,650
Restructuring	—		1,070
Other	7,980		8,780
Total	$	10,630	$	14,560

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Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s long-term debt consists of the following components:

	September 30, 2021		December 31, 2020
	(dollars in thousands)
Revolving Credit Facility	$	44,910	$	24,230
Senior Term Loan	100,000		—
Replacement Term Loan	—		90,210
Convertible Notes	125,000		125,000
Paycheck Protection Program Loan	8,670		8,670
Bank facilities, capital leases and other long-term debt	17,700		17,970
Gross debt	296,280		266,080
Less:
Short-term borrowings and current maturities, long-term debt	5,940		14,120
Gross long-term debt	290,340		251,960
Unamortized debt issuance costs and discount:
Unamortized debt issuance costs and original issuance discount on Senior Term Loan	(22,870)		—
Unamortized debt issuance costs and original issuance discount on Replacement Term Loan	—		(9,100)
Unamortized debt issuance costs and discount on Convertible Notes	(6,130)		(11,470)
Total	(29,000)		(20,570)
Long-term debt	$	261,340	$	231,390

Interest Income and Interest Expense Disclosure

The interest expense recognized consists of contractual interest coupon, amortization of debt discount and amortization of debt issuance costs on the Convertible Notes, and is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Contractual interest coupon on convertible debt	$	860	$	860	$	2,580	$	2,600
Amortization of debt issuance costs	130		130		400		400
Amortization of "equity discount" related to debt	1,640		1,510		4,940		4,550
Total	$	2,630	$	2,500	$	7,920	$	7,550

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Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Schedule of Lease Costs

Supplemental information for the Company’s leases is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Operating lease cost	$	3,040	$	4,260	$	10,670	$	11,460

	Nine Months Ended September 30,
	2021		2020
Operating cash flows from operating leases	$	9,980	$	12,060
ROU assets obtained in exchange for operating lease obligations	$	910	$	4,080

	September 30, 2021		December 31, 2020
Weighted average remaining lease term (years)	5.2		6.0
Weighted average discount rate	8.4	%	8.4	%

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Earnings (Loss) per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands, except for per share amounts)
Numerator:
Net (loss) income from continuing operations	$	(2,770)	$	1,590	$	(16,960)	$	(31,660)
Add: Loss from discontinued operations, net of income tax	—		—		—		(500)
Less: Net loss attributable to noncontrolling interest	(300)		(340)		(970)		(1,010)
Net (loss) income attributable to Horizon Global	$	(2,470)	$	1,930	$	(15,990)	$	(31,150)
Denominator:
Weighted average shares outstanding, basic	27,286,600		25,939,741		27,019,554		25,651,789
Dilutive effect of common stock equivalents	—		7,389,365		—		—
Weighted average shares outstanding, diluted	27,286,600		33,329,106		27,019,554		25,651,789
Basic (loss) income per share attributable to Horizon Global
Continuing operations	$	(0.09)	$	0.07	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.07	$	(0.59)	$	(1.21)
Diluted (loss) income per share attributable to Horizon Global
Continuing operations	$	(0.09)	$	0.06	$	(0.59)	$	(1.19)
Discontinued operations	—		—		—		(0.02)
Total	$	(0.09)	$	0.06	$	(0.59)	$	(1.21)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

A summary of these anti-dilutive common stock equivalents are as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Number of options	18,961	18,961	18,961	18,961
Exercise price of options	$9.20 - $11.02	$9.20 - $11.02	$9.20 - $11.02	$9.20 - $11.02
Restricted stock units	1,761,463	—	1,863,498	1,820,186
Convertible Notes	5,005,000	5,005,000	5,005,000	5,005,000
Convertible Notes warrants	5,005,000	5,005,000	5,005,000	5,005,000
Common stock warrants	9,231,146	—	8,810,164	6,376,519

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Equity Awards (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

	Number of Stock Options	Weighted Average Exercise Price		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	18,961	$	10.43
Granted	—	—
Exercised	—	—
Canceled, forfeited	—	—
Expired	—	—
Outstanding at September 30, 2021	18,961	$	10.43	4.2	$	—

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

Changes in the number of RSUs outstanding for the nine months ended September 30, 2021 are as follows:

	Number of Restricted Stock Units(a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020	1,800,682	$	3.14
Granted	532,899	8.98
Vested	(499,826)	2.64
Canceled, forfeited	(71,669)	5.00
Outstanding at September 30, 2021	1,762,086	$	4.97

(a)Includes PSUs at 100% attainment.

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2021

Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The change in AOCI attributable to Horizon Global by component, net of tax, for the nine months ended September 30, 2021 is as follows:

	Foreign Currency Translation and Other
	(dollars in thousands)
Balance at January 1, 2021	$	(6,540)
Net unrealized losses arising during the period	(4,070)
Net change	(4,070)
Balance at September 30, 2021	$	(10,610)

The change in AOCI attributable to Horizon Global by component, net of tax, for the nine months ended September 30, 2020 is as follows:

	Foreign Currency Translation and Other
	(dollars in thousands)
Balance at January 1, 2020	$	(9,790)
Net unrealized losses arising during the period	(400)
Net change	(400)
Balance at September 30, 2020	$	(10,190)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Net Sales
Horizon Americas	$	115,850	$	119,140	$	354,060	$	285,630
Horizon Europe-Africa	80,690		82,490		263,790		199,740
Total	$	196,540	$	201,630	$	617,850	$	485,370
Operating Profit (Loss)
Horizon Americas	$	12,400	$	13,170	$	41,000	$	19,330
Horizon Europe-Africa	(150)		2,440		2,550		(6,040)
Corporate	(5,920)		(7,050)		(19,110)		(19,380)
Total	$	6,330	$	8,560	$	24,440	$	(6,090)

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Other (Expense) Income, Net (Tables)

9 Months Ended

Sep. 30, 2021

Other Income and Expenses [Abstract]

Schedule of Other Expense, Net

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(dollars in thousands)
Foreign currency (loss) gain	$	(1,370)	$	1,080	$	(3,020)	$	(670)
Customer pay discounts	(280)		(420)		(780)		(960)
Loss on sale of business	—		—		(2,230)		—
Other, net	(70)		30		90		200
Total	$	(1,720)	$	690	$	(5,940)	$	(1,430)

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Revenues - Schedule of Net Sales Disaggregated by Major Sales Channels (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 196,540	$ 201,630	$ 617,850	$ 485,370
Aftermarket
Disaggregation of Revenue [Line Items]
Net sales	57,790	59,750	178,590	141,190
Automotive OEM
Disaggregation of Revenue [Line Items]
Net sales	59,280	66,410	202,200	158,300
Automotive OES
Disaggregation of Revenue [Line Items]
Net sales	24,360	16,800	68,490	39,330
Retail
Disaggregation of Revenue [Line Items]
Net sales	26,460	34,290	81,650	80,690
E-commerce
Disaggregation of Revenue [Line Items]
Net sales	18,920	15,870	56,560	42,410
Industrial
Disaggregation of Revenue [Line Items]
Net sales	9,250	7,780	28,680	21,330
Other
Disaggregation of Revenue [Line Items]
Net sales	480	730	1,680	2,120
Horizon Americas
Disaggregation of Revenue [Line Items]
Net sales	115,850	119,140	354,060	285,630
Horizon Americas | Aftermarket
Disaggregation of Revenue [Line Items]
Net sales	35,390	35,390	107,640	84,440
Horizon Americas | Automotive OEM
Disaggregation of Revenue [Line Items]
Net sales	24,690	24,010	74,860	53,880
Horizon Americas | Automotive OES
Disaggregation of Revenue [Line Items]
Net sales	3,570	2,980	11,670	5,330
Horizon Americas | Retail
Disaggregation of Revenue [Line Items]
Net sales	26,460	34,290	81,650	80,690
Horizon Americas | E-commerce
Disaggregation of Revenue [Line Items]
Net sales	16,970	15,240	51,220	41,120
Horizon Americas | Industrial
Disaggregation of Revenue [Line Items]
Net sales	8,770	7,230	27,020	20,120
Horizon Americas | Other
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	50
Horizon Europe-Africa
Disaggregation of Revenue [Line Items]
Net sales	80,690	82,490	263,790	199,740
Horizon Europe-Africa | Aftermarket
Disaggregation of Revenue [Line Items]
Net sales	22,400	24,360	70,950	56,750
Horizon Europe-Africa | Automotive OEM
Disaggregation of Revenue [Line Items]
Net sales	34,590	42,400	127,340	104,420
Horizon Europe-Africa | Automotive OES
Disaggregation of Revenue [Line Items]
Net sales	20,790	13,820	56,820	34,000
Horizon Europe-Africa | Retail
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Horizon Europe-Africa | E-commerce
Disaggregation of Revenue [Line Items]
Net sales	1,950	630	5,340	1,290
Horizon Europe-Africa | Industrial
Disaggregation of Revenue [Line Items]
Net sales	480	550	1,660	1,210
Horizon Europe-Africa | Other
Disaggregation of Revenue [Line Items]
Net sales	$ 480	$ 730	$ 1,680	$ 2,070

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Goodwill and Other Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Goodwill [Roll Forward]
Balance at January 1, 2021		$ 3,360
Divestiture of business	$ (3,340)
Foreign currency translation	(20)
Balance at September 30, 2021	0
Horizon Americas
Goodwill [Roll Forward]
Balance at January 1, 2021		3,360
Divestiture of business	(3,340)
Foreign currency translation	(20)
Balance at September 30, 2021	0
Horizon Europe-Africa
Goodwill [Roll Forward]
Balance at January 1, 2021		$ 0
Divestiture of business	0
Foreign currency translation	0
Balance at September 30, 2021	$ 0

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jun. 08, 2021	Jun. 30, 2021	Sep. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill written off due to divestiture of business			$ 3,340
Horizon Americas
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill written off due to divestiture of business			$ 3,340
Discontinued Operations, Disposed of by Sale | Brazil Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from sale		$ 2,200
Discontinued Operations, Disposed of by Sale | Brazil Sale | Horizon Americas
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill written off due to divestiture of business	$ 3,300

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Goodwill and Other Intangible Assets - Schedule of Intangible Assets (excluding Goodwill) by Major Class (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Intangible Assets, excluding Goodwill [Line Items]
Finite-lived intangible assets, gross carrying amount	$ 185,730	$ 188,820
Finite-lived intangible assets, accumulated amortization	(153,920)	(152,000)
Finite-lived intangible assets, net	31,810	36,820
Total other intangible assets, gross	206,790	210,230
Total other intangible assets, net	52,870	58,230
Trademarks and Trade Names
Intangible Assets, excluding Goodwill [Line Items]
Indefinite-lived intangible assets, gross carrying amount	21,060	21,410
Useful Life Two To Twenty Years | Customer Relationships
Intangible Assets, excluding Goodwill [Line Items]
Finite-lived intangible assets, gross carrying amount	162,970	166,420
Finite-lived intangible assets, accumulated amortization	(136,640)	(135,140)
Finite-lived intangible assets, net	26,330	31,280
Useful Life Three to Fifteen Years | Technology and Other
Intangible Assets, excluding Goodwill [Line Items]
Finite-lived intangible assets, gross carrying amount	22,760	22,250
Finite-lived intangible assets, accumulated amortization	(17,280)	(16,710)
Finite-lived intangible assets, net	$ 5,480	5,540
Useful Life One To Eight Years | Trademarks and Trade Names
Intangible Assets, excluding Goodwill [Line Items]
Finite-lived intangible assets, gross carrying amount		150
Finite-lived intangible assets, accumulated amortization		(150)
Finite-lived intangible assets, net		$ 0
Minimum | Useful Life Two To Twenty Years | Customer Relationships
Intangible Assets, excluding Goodwill [Line Items]
Useful life of intangible assets	2 years	2 years
Minimum | Useful Life Three to Fifteen Years | Technology and Other
Intangible Assets, excluding Goodwill [Line Items]
Useful life of intangible assets	3 years	3 years
Minimum | Useful Life One To Eight Years | Trademarks and Trade Names
Intangible Assets, excluding Goodwill [Line Items]
Useful life of intangible assets		1 year
Maximum | Useful Life Two To Twenty Years | Customer Relationships
Intangible Assets, excluding Goodwill [Line Items]
Useful life of intangible assets	20 years	20 years
Maximum | Useful Life Three to Fifteen Years | Technology and Other
Intangible Assets, excluding Goodwill [Line Items]
Useful life of intangible assets	15 years	15 years
Maximum | Useful Life One To Eight Years | Trademarks and Trade Names
Intangible Assets, excluding Goodwill [Line Items]
Useful life of intangible assets		8 years

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Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets, Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Amortization of Intangible Assets [Line Items]
Amortization of intangible assets	$ 1,250	$ 1,610	$ 4,220	$ 5,040
Cost of sales | Technology and Other
Amortization of Intangible Assets [Line Items]
Amortization of intangible assets	210	280	990	950
Selling, general and administrative expenses | Customer Relationships
Amortization of Intangible Assets [Line Items]
Amortization of intangible assets	$ 1,040	$ 1,330	$ 3,230	$ 4,090

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Finished goods	$ 89,640	$ 58,600
Work in process	15,870	13,070
Raw materials	58,760	43,650
Total	$ 164,270	$ 115,320

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Property and Equipment, Net - Property and Equipment Table (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 165,640	$ 158,310
Less: Accumulated depreciation	(92,700)	(84,220)
Property and equipment, net	72,940	74,090
Land and land improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	490	520
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	22,760	23,040
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 142,390	$ 134,750

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Property and Equipment, Net - Depreciation Expense Table (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Depreciation Expense [Line Items]
Depreciation expense	$ 3,960	$ 4,010	$ 11,710	$ 11,110
Cost of sales
Depreciation Expense [Line Items]
Depreciation expense	3,720	3,920	10,850	10,330
Selling, general and administrative expenses
Depreciation Expense [Line Items]
Depreciation expense	$ 240	$ 90	$ 860	$ 780

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Accrued and Other Long-term Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accrued Liabilities [Abstract]
Customer incentives	$ 14,730	$ 15,870
Accrued compensation	11,020	12,130
Short-term tax liabilities	4,920	5,570
Customer claims	3,830	6,520
Litigation settlements	1,760	1,510
Accrued professional services	1,150	1,600
Restructuring	120	650
Deferred purchase price	0	1,370
Other	15,810	13,880
Total	$ 53,340	$ 59,100

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Accrued and Other Long-term Liabilities - Long-term Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accrued Liabilities [Abstract]
Litigation settlements	$ 2,320	$ 2,930
Long-term tax liabilities	330	130
Deferred purchase price	0	1,650
Restructuring	0	1,070
Other	7,980	8,780
Total	$ 10,630	$ 14,560

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Long-term Debt - Debt Table (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Gross long-term debt	$ 296,280	$ 266,080
Short-term borrowings and current maturities, long-term debt	5,940	14,120
Gross long-term debt	290,340	251,960
Unamortized debt issuance costs and discount	(29,000)	(20,570)
Long-term debt	261,340	231,390
Revolving Credit Facility
Debt Instrument [Line Items]
Gross long-term debt	44,910	24,230
Senior Term Loan
Debt Instrument [Line Items]
Gross long-term debt	100,000	0
Unamortized debt issuance costs and discount	(22,870)	0
Replacement Term Loan
Debt Instrument [Line Items]
Gross long-term debt	0	90,210
Unamortized debt issuance costs and discount	0	(9,100)
Convertible notes
Debt Instrument [Line Items]
Gross long-term debt	125,000	125,000
Unamortized debt issuance costs and discount	(6,130)	(11,470)
Paycheck Protection Plan
Debt Instrument [Line Items]
Gross long-term debt	8,670	8,670
Bank facilities, capital leases and other long-term debt
Debt Instrument [Line Items]
Gross long-term debt	$ 17,700	$ 17,970

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Long-term Debt - ABL Facility (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 17, 2021	Apr. 19, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 22, 2015
Debt Instrument [Line Items]
Gross long-term debt	$ 296,280,000		$ 296,280,000				$ 266,080,000
Revolving Credit Facility, ABL Facility
Debt Instrument [Line Items]
Aggregate principal									$ 80,000,000
Amortization of debt issuance costs	0	$ 0	0	$ 400,000
Debt extinguishment related to unamortized debt issuance costs in interest expense				800,000
Costs associated with extinguishment of debt				600,000
Remaining borrowing capacity							38,400,000
Revolving Credit Facility
Debt Instrument [Line Items]
Aggregate principal					$ 95,000,000	$ 85,000,000		$ 75,000,000
Debt issuance costs	2,300,000		2,300,000
Amortization of debt issuance costs	100,000	$ 200,000	400,000	$ 900,000
Gross long-term debt	44,910,000		44,910,000				24,230,000
Total letters of credit outstanding	$ 2,100,000		$ 2,100,000				$ 3,100,000
Percentage of cash collateral required	105.00%		105.00%
Remaining borrowing capacity	$ 37,500,000		$ 37,500,000

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Long-term Debt - Revolving Credit Facility (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 17, 2021	Apr. 19, 2021	Dec. 31, 2020	Dec. 22, 2015
Debt Instrument [Line Items]
Gross long-term debt		$ 296,280,000		$ 296,280,000				$ 266,080,000
Revolving Credit Facility
Debt Instrument [Line Items]
Weighted average interest rate		5.30%		5.30%
Aggregate principal	$ 75,000,000					$ 95,000,000	$ 85,000,000
Incremental increase in borrowing capacity	5,000,000
Maximum incremental increase in borrowing capacity available	$ 25,000,000
Maximum capital expenditures under covenant		$ 30,000,000		$ 30,000,000
Debt issuance costs		2,300,000		2,300,000
Amortization of debt issuance costs		100,000	$ 200,000	400,000	$ 900,000
Gross long-term debt		44,910,000		44,910,000				24,230,000
Remaining borrowing capacity		37,500,000		37,500,000
Total letters of credit outstanding		$ 2,100,000		$ 2,100,000				3,100,000
Percentage of cash collateral required		105.00%		105.00%
Debt Instrument, Collateral Amount		$ 4,900,000		$ 4,900,000				5,100,000
Revolving Credit Facility | Other Letter Of Credit
Debt Instrument [Line Items]
Total letters of credit outstanding		4,200,000		4,200,000				$ 4,900,000
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	4.00%
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Revolving Credit Facility | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
Revolving Credit Facility, ABL Facility
Debt Instrument [Line Items]
Weighted average interest rate								5.00%
Aggregate principal									$ 80,000,000
Amortization of debt issuance costs		$ 0	$ 0	$ 0	$ 400,000
Remaining borrowing capacity								$ 38,400,000

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Long-term Debt - First Lien Term Loans (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Jun. 30, 2015
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 1,000,000		$ 1,000,000		$ 1,100,000
Paid-in-kind interest			650,000	$ 6,280,000
First Lien Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount						$ 200,000,000
Amortization of debt issuance costs	0	$ 0	0	200,000
Paid-in-kind interest	$ 0	$ 0	$ 0	$ 400,000

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Long-term Debt - Second Lien Term Loan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2019
Short-term Debt [Line Items]
Paid-in-kind interest			$ 650	$ 6,280
Second Lien Term Loan
Short-term Debt [Line Items]
Debt instrument, face amount					$ 51,000
Amortization of debt issuance costs	$ 0	$ 0	0	2,700
Paid-in-kind interest	$ 0	$ 100	$ 0	$ 3,400

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Long-term Debt - Replacement Term Loan (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 06, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Short-term Debt [Line Items]
Paid-in-kind interest				$ 650	$ 6,280
Loss on debt extinguishment		$ 0	$ 0	11,650	0
Replacement Term Loan
Short-term Debt [Line Items]
Debt instrument, face amount						$ 90,200
Debt issuance costs			200		200
Amortization of debt issuance costs		0	1,200	400	1,200
Unamortized debt discount and issuance costs						$ 9,100
Paid in kind interest rate, closing fee	1.00%
Prepayment penalty as a percentage of aggregate principal	3.00%
Paid-in-kind interest		$ 0	$ 2,500	700	$ 2,500
Effective interest rate	4.00%
Loss on debt extinguishment				11,700
Write off of debt issuance costs				8,900
Other costs				$ 2,800
Replacement Term Loan | London Interbank Offered Rate (LIBOR) [Member]
Short-term Debt [Line Items]
Basis spread on variable rate	10.75%
Replacement Term Loan | London Interbank Offered Rate (LIBOR) [Member] | Minimum
Short-term Debt [Line Items]
Basis spread on variable rate	1.00%

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Long-term Debt - Senior Term Loan (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Feb. 02, 2021	Sep. 30, 2021	Sep. 30, 2021	Feb. 28, 2021	Dec. 31, 2020	Mar. 31, 2019
Debt Instrument [Line Items]
Issued warrants (in shares)		9,231,146	9,231,146		5,815,039
Exercise price of warrants (in usd per share)				$ 9.00		$ 1.50
Unamortized debt issuance costs		$ 1,000	$ 1,000		$ 1,100
Gross long-term debt		296,280	296,280		266,080
Senior Term Loan
Debt Instrument [Line Items]
Aggregate principal	$ 100,000
Incremental borrowing base	$ 125,000
Line Of Credit, Ticking Fee Percentage	2500.00%
Issued warrants (in shares)	3,905,486
Exercise price of warrants (in usd per share)	$ 9.00
Debt issuance costs	$ 5,400
Long-term Debt, Fair Value	82,400
Initial debt issuance costs	3,000
Total Debt Issuance Costs, Net	8,400
Unamortized debt discount and issuance costs		(22,900)	(22,900)
Unamortized debt issuance costs	$ 7,100
Amortization of debt issuance costs		700	1,800
Gross long-term debt		$ 100,000	100,000		$ 0
Senior Term Loan | Debt Instrument, Secured Net Leverage Ratio
Debt Instrument [Line Items]
Secured Net Leverage Ratio	6.50
Senior Term Loan | Debt Instrument, Capital Expenditures Covenant
Debt Instrument [Line Items]
Maximum capital expenditures allowed under financial covenant	$ 27,500
Line of Credit Facility, Carryforward Amount, Percent	50.00%
Senior Term Loan | Debt Instrument, Call Premium
Debt Instrument [Line Items]
Debt Instrument, Call Premium, Percent	2.50%
Senior Term Loan Warrants
Debt Instrument [Line Items]
Warrants Not Settleable in Cash, Fair Value Disclosure	$ 17,600
Amortization of "equity discount" related to debt			$ 1,300
London Interbank Offered Rate (LIBOR) [Member] | Senior Term Loan
Debt Instrument [Line Items]
Basis spread on variable rate	7.50%
Minimum | London Interbank Offered Rate (LIBOR) [Member] | Senior Term Loan
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%

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Long-term Debt - Convertible Notes (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2017	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Gross long-term debt		$ 296,280,000		$ 296,280,000		$ 266,080,000
Unamortized debt issuance costs and discount		29,000,000		29,000,000		20,570,000
Revolving Credit Facility
Debt Instrument [Line Items]
Gross long-term debt		44,910,000		44,910,000		24,230,000
Convertible notes
Debt Instrument [Line Items]
Gross long-term debt		125,000,000		125,000,000		125,000,000
Interest rate	2.75%
Debt instrument, face amount	$ 125,000,000
Share issued upon conversion (in shares)	5,005,000
Conversion price (in dollars per share)	$ 24.98
Interest expense		2,630,000	$ 2,500,000	7,920,000	$ 7,550,000
Debt Instrument, Convertible, Stock Price Trigger	$ 24.98
Debt Conversion, Converted Instrument, Warrants or Options Issued	5,005,000
Unamortized debt issuance costs and discount		$ 6,130,000		$ 6,130,000		$ 11,470,000

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Long-term Debt - Schedule of Interest and Amortization on Convertible Debt (Details) - Convertible notes - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Contractual interest coupon on convertible debt	$ 860	$ 860	$ 2,580	$ 2,600
Amortization of debt issuance costs	130	130	400	400
Amortization of "equity discount" related to debt	1,640	1,510	4,940	4,550
Total	$ 2,630	$ 2,500	$ 7,920	$ 7,550

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Long-term Debt - Paycheck Protection Program Loan (Details) - Paycheck Protection Plan - USD ($) $ in Millions	Sep. 30, 2021	Apr. 30, 2020	Apr. 18, 2020
Debt Instrument [Line Items]
Debt instrument, face amount			$ 8.7
Value of loans in application for forgiveness	$ 7.1
Interest rate		1.00%

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Renewal term for operating leases	5 years		5 years
Termination term			1 year
Operating lease cost	$ 3,040	$ 4,260	$ 10,670	$ 11,460
Operating cash flows from operating leases			9,980	12,060
Right-of-use assets obtained in exchange for operating lease obligations			$ 910	$ 4,080
Weighted average remaining lease term	5 years 2 months 12 days		5 years 2 months 12 days		6 years
Weighted average discount rate	8.40%		8.40%		8.40%
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	7 years		7 years

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Contingencies (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended			9 Months Ended
	Apr. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Loss Contingencies [Line Items]
Settlement amount	$ 4.4
Prepaid Expenses and Other Current Assets
Loss Contingencies [Line Items]
Estimated litigation asset		$ 0.9			$ 0.9		$ 0.9
Other Assets
Loss Contingencies [Line Items]
Estimated litigation asset		1.2			1.2		1.8
Accrued Liabilities
Loss Contingencies [Line Items]
Liabilities for patent infringement		0.9			0.9		1.0
Other Noncurrent Liabilities
Loss Contingencies [Line Items]
Liabilities for patent infringement		2.3			2.3		$ 2.9
Cost of sales
Loss Contingencies [Line Items]
Loss contingency charges				$ 1.5
Royalties		$ 0.2	$ 0.2		$ 0.5	$ 0.4

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Earnings (Loss) per Share - Reconciliation of Numerator and Denominator of Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share [Abstract]
Net loss from continuing operations	$ (2,770)	$ 1,590	$ (16,960)	$ (31,660)
Loss from discontinued operations, net of income tax	0	0	0	(500)
Less: Net loss attributable to noncontrolling interest	(300)	(340)	(970)	(1,010)
Net (loss) income attributable to Horizon Global	$ (2,470)	$ 1,930	$ (15,990)	$ (31,150)
Weighted average shares outstanding, basic (in shares)	27,286,600	25,939,741	27,019,554	25,651,789
Dilutive effect of stock-based awards (in shares)	0	7,389,365	0	0
Weighted average shares outstanding, diluted (in shares)	27,286,600	33,329,106	27,019,554	25,651,789
Basic (loss) income per share attributable to Horizon Global
Continuing operations (in dollars per share)	$ (0.09)	$ 0.07	$ (0.59)	$ (1.19)
Discontinued operations (in dollars per share)	0	0	0	(0.02)
Total (in dollars per share)	(0.09)	0.07	(0.59)	(1.21)
Diluted (loss) income per share attributable to Horizon Global
Continuing operations (in dollars per share)	(0.09)	0.06	(0.59)	(1.19)
Discontinued operations (in dollars per share)	0	0	0	(0.02)
Total (in dollars per share)	$ (0.09)	$ 0.06	$ (0.59)	$ (1.21)

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Earnings (Loss) per Share - Schedule of Antidilutive Securities (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	18,961	18,961	18,961	18,961
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,761,463	0	1,863,498	1,820,186
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5,005,000	5,005,000	5,005,000	5,005,000
Convertible notes warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5,005,000	5,005,000	5,005,000	5,005,000
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	9,231,146	0	8,810,164	6,376,519
Minimum | Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Exercise price of options (in dollars per share)	$ 9.20	$ 9.20	$ 9.20	$ 9.20
Maximum | Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Exercise price of options (in dollars per share)	$ 11.02	$ 11.02	$ 11.02	$ 11.02

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Equity Awards - Stock Options Narrative (Details) shares in Millions	Sep. 30, 2021 shares
Horizon 2020 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Authorized	4.1

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Equity Awards - Stock Option Activity Table (Details)	9 Months Ended
	Sep. 30, 2021 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance (in shares) | shares	18,961
Granted (in shares) | shares	0
Exercised (in shares) | shares	0
Canceled, forfeited (in shares) | shares	0
Expired (in shares) | shares	0
Ending balance (in shares) | shares	18,961
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Beginning balance (in usd per share) | $ / shares	$ 10.43
Granted (in usd per share) | $ / shares	0
Exercised (in usd per share) | $ / shares	0
Canceled, forfeited (in usd per share) | $ / shares	0
Expired (in usd per share) | $ / shares	0
Ending balance (in usd per share) | $ / shares	$ 10.43
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
Average Remaining Contractual Life (Years)	4 years 2 months 12 days
Aggregate Intrinsic Value | $	$ 0

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Equity Awards - Restricted Shares Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
RSU and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)					1,502,072
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			532,899
Grant date fair value (in usd per share)			$ 8.98
Unrecognized compensation cost	$ 4.8		$ 4.8
Weighted-average period for recognition of the unrecognized unvested restricted shares-based compensation expense			2 years
Restricted shares-based compensation expense	$ 0.9	$ 0.9	$ 2.6	$ 2.2
Tranche One | RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			83,482		284,859
Tranche Two | RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			153,563		277,228
Tranche Three | RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)					21,351
Tranche Three | PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			230,350
Tranche Four | RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			65,504
Tranche Four | PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)					918,634

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Equity Awards - Restricted Shares Activity Table (Details) - RSUs	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares) | shares	1,800,682
Granted (in shares) | shares	532,899
Vested (in shares) | shares	(499,826)
Canceled, forfeited (in shares) | shares	(71,669)
Ending balance (in shares) | shares	1,762,086
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Beginning balance (in usd per share) | $ / shares	$ 3.14
Granted (in usd per share) | $ / shares	8.98
Vested (in usd per share) | $ / shares	2.64
Canceled, forfeited (in usd per share) | $ / shares	5.00
Ending balance (in usd per share) | $ / shares	$ 4.97

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Shareholders' Equity - (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Feb. 28, 2021	Dec. 31, 2020	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred stock, authorized shares (in shares)	100,000,000			100,000,000
Preferred stock, par value (in dollars per share)	$ 0.01			$ 0.01
Preferred stock, outstanding shares (in shares)	0			0
Common Stock, authorized shares (in shares)	400,000,000			400,000,000
Common stock, par value (in dollars per share)	$ 0.01			$ 0.01
Common Stock, issued shares (in shares)	27,973,153			27,089,673
Common Stock, outstanding shares (in shares)	27,286,647			26,403,167
Number of warrants authorized to be issued (in shares)			3,905,486		6,250,000
Exercise price of warrants (in usd per share)			$ 9.00		$ 1.50
Warrants outstanding and exercisable (in shares)	9,231,146			5,815,039
Number of warrants exercised	1,228,490
Number of shares of common stock received (in shares)	972,924				278,283
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ (23,850)	$ 8,600
Ending balance	(25,930)	(22,090)
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(6,540)	(9,790)
Net unrealized gains (losses) arising during the period	(4,070)	(400)
Net change	(4,070)	(400)
Ending balance	(10,610)	(10,190)
Paid-in Capital
Accumulated Other Comprehensive Income (Loss) [Line Items]
Non-cash transactions	300
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	166,610	163,240
Ending balance	$ 170,050	$ 165,910

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Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) segment	Sep. 30, 2020 USD ($)
Segment Reporting [Abstract]
Number of Reportable Segments | segment			2
Segment Reporting Information [Line Items]
Loss from discontinued operations, net of income tax	$ 0	$ 0	$ 0	$ 500
Net sales	196,540	201,630	617,850	485,370
Operating Profit (Loss)	6,330	8,560	24,440	(6,090)
Horizon Americas
Segment Reporting Information [Line Items]
Net sales	115,850	119,140	354,060	285,630
Horizon Europe-Africa
Segment Reporting Information [Line Items]
Net sales	80,690	82,490	263,790	199,740
Operating Segments | Horizon Americas
Segment Reporting Information [Line Items]
Net sales	115,850	119,140	354,060	285,630
Operating Profit (Loss)	12,400	13,170	41,000	19,330
Operating Segments | Horizon Europe-Africa
Segment Reporting Information [Line Items]
Net sales	80,690	82,490	263,790	199,740
Operating Profit (Loss)	(150)	2,440	2,550	(6,040)
Corporate
Segment Reporting Information [Line Items]
Operating Profit (Loss)	$ (5,920)	$ (7,050)	$ (19,110)	$ (19,380)

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Effective Income Tax Rate (as a percent)	(17.40%)	5.90%	(19.90%)	(0.50%)

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Other (Expense) Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Other Income and Expenses [Abstract]
Foreign currency (loss) gain	$ (1,370)	$ 1,080	$ (3,020)	$ (670)
Customer pay discounts	(280)	(420)	(780)	(960)
Loss on sale of business	0	0	(2,230)	0
Other, net	(70)	30	90	200
Total	$ (1,720)	$ 690	$ (5,940)	$ (1,430)