NORTHVILLE, Mich., Nov. 2, 2023
/PRNewswire/ -- Cooper-Standard Holdings Inc. (NYSE: CPS) today
reported results for the third quarter 2023.
Third Quarter 2023 Summary
- Sales totaled $736.0 million,
an increase of 12.0% compared to third quarter 2022
- Gross profit totaled $106.5
million, an increase of 176.3% compared to third quarter
2022
- Net income of $11.4 million,
or $0.65 per diluted share, reflected
an improvement of $44.0 million vs.
the third quarter 2022
- Adjusted EBITDA of $79.1
million, or 10.7% of sales, increased by $58.6 million vs. the third quarter 2022
"We continued to leverage higher production volume, operating
efficiency and further implementation of enhanced commercial
agreements to drive strong margin improvements in the quarter,"
said Jeffrey Edwards, chairman and
CEO, Cooper Standard. "We believe our investments in
customer-focused technology and innovation have been key to recent
operating improvement and will further position us for long-term
growth and success."
Consolidated Results
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(dollar amounts in
millions except per share amounts)
|
Sales
|
$
736.0
|
|
$
657.2
|
|
$
2,142.2
|
|
$
1,876.1
|
Net income
(loss)
|
$
11.4
|
|
$
(32.7)
|
|
$
(146.8)
|
|
$
(127.3)
|
Adjusted net income
(loss)
|
$
15.0
|
|
$
(29.5)
|
|
$
(51.2)
|
|
$
(139.3)
|
Income (loss) per
diluted share
|
$
0.65
|
|
$
(1.90)
|
|
$
(8.47)
|
|
$
(7.41)
|
Adjusted income (loss)
per diluted share
|
$
0.85
|
|
$
(1.71)
|
|
$
(2.95)
|
|
$
(8.11)
|
Adjusted
EBITDA
|
$
79.1
|
|
$
20.5
|
|
$
139.5
|
|
$
10.3
|
The year-over-year increase in third quarter sales was primarily
attributable to favorable volume and mix, sustainable price
adjustments, inflation recoveries, and favorable foreign exchange,
partially offset by the deconsolidation or divestiture of
non-core businesses.
Net income for the third quarter 2023 was $11.4 million, including restructuring charges of
$2.0 million and other special items.
Net loss for the third quarter 2022 was $32.7 million, including restructuring charges of
$1.7 million and other special items.
Excluding restructuring and other special items, adjusted net
income was $15.0 million in the third
quarter 2023 compared to adjusted net loss of $29.5 million in the third quarter of 2022. The
year-over-year improvement was primarily due to improved volume and
mix, favorable price adjustments, and savings generated from lean
manufacturing and purchasing initiatives, partially offset by
higher interest expense, continuing inflationary pressure,
including higher labor and energy costs, and unfavorable foreign
exchange.
Adjusted EBITDA for the third quarter of 2023 was $79.1 million compared to $20.5 million in the third quarter of 2022. The
year-over-year improvement was primarily due to improved volume and
mix, favorable price adjustments, and savings generated from lean
manufacturing and purchasing initiatives. These items were
partially offset by continuing inflationary pressures, including
higher labor and energy costs, and unfavorable foreign
exchange.
Adjusted net income (loss), adjusted EBITDA and adjusted income
(loss) per diluted share are non-GAAP measures. Reconciliations to
the most directly comparable financial measures, calculated and
presented in accordance with accounting principles generally
accepted in the United States
("U.S. GAAP"), are provided in the attached supplemental
schedules.
Automotive New Business Awards
The Company continues to leverage its world-class engineering
and manufacturing capabilities, its innovation programs and its
reputation for quality and service to win new business awards with
its customers and capitalize on positive trends associated with
electric vehicles. During the third quarter of 2023, the Company
received new business awards representing $34.4 million in incremental anticipated future
annualized sales on new electric vehicle platforms. Total net
new business awards were not material in the third quarter due
primarily to the run-out or cancellation of certain existing or
planned traditional powertrain vehicle programs. For the
first nine months of 2023, new business awards on electric vehicle
platforms totaled $89.2 million and
total net new business awards were $89.0
million.
Segment Results of Operations
Sales
|
Three Months Ended
September 30,
|
|
|
Variance Due
To:
|
|
2023
|
|
2022
|
|
Change
|
|
|
Volume /
Mix*
|
|
Foreign
Exchange
|
|
Divestitures
|
|
(dollar amounts in
thousands)
|
Sales to external
customers
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$ 410,906
|
|
$ 351,011
|
|
$
59,895
|
|
|
$
62,323
|
|
$
(2,428)
|
|
$
—
|
Europe
|
147,550
|
|
113,670
|
|
33,880
|
|
|
22,933
|
|
10,947
|
|
—
|
Asia
Pacific
|
120,617
|
|
129,493
|
|
(8,876)
|
|
|
(2,861)
|
|
(5,252)
|
|
(763)
|
South
America
|
34,348
|
|
27,073
|
|
7,275
|
|
|
4,968
|
|
2,307
|
|
—
|
Total
Automotive
|
713,421
|
|
621,247
|
|
92,174
|
|
|
87,363
|
|
5,574
|
|
(763)
|
Corporate,
eliminations and other
|
22,617
|
|
35,906
|
|
(13,289)
|
|
|
(5,571)
|
|
351
|
|
(8,069)
|
Consolidated
sales
|
$ 736,038
|
|
$ 657,153
|
|
$
78,885
|
|
|
$
81,792
|
|
$
5,925
|
|
$
(8,832)
|
|
* Net
of customer price adjustments, including recoveries.
|
- Volume and mix, net of customer price adjustments including
recoveries, was mainly driven by vehicle production volume
increases due to the stabilization of the supply
environment.
- The net impact of foreign currency exchange was primarily
related to the Euro and Chinese Renminbi.
Adjusted EBITDA
|
Three Months Ended
September 30,
|
|
|
Variance Due
To:
|
|
2023
|
|
2022
|
|
Change
|
|
|
Volume/
Mix*
|
|
Foreign
Exchange
|
|
Cost
(Increases)/
Decreases**
|
|
(dollar amounts in
thousands)
|
Segment adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$ 60,215
|
|
$ 19,401
|
|
$ 40,814
|
|
|
$ 49,830
|
|
$
(9,490)
|
|
$
474
|
Europe
|
10,057
|
|
(10,905)
|
|
20,962
|
|
|
18,578
|
|
1,705
|
|
679
|
Asia
Pacific
|
8,770
|
|
7,523
|
|
1,247
|
|
|
(419)
|
|
(1,462)
|
|
3,128
|
South
America
|
2,639
|
|
766
|
|
1,873
|
|
|
1,426
|
|
601
|
|
(154)
|
Total
Automotive
|
81,681
|
|
16,785
|
|
64,896
|
|
|
69,415
|
|
(8,646)
|
|
4,127
|
Corporate,
eliminations and other
|
(2,578)
|
|
3,720
|
|
(6,298)
|
|
|
(1,111)
|
|
(678)
|
|
(4,509)
|
Consolidated adjusted
EBITDA
|
$ 79,103
|
|
$ 20,505
|
|
$ 58,598
|
|
|
$ 68,304
|
|
$
(9,324)
|
|
$
(382)
|
|
* Net of
customer price adjustments, including recoveries.
|
** Net
of divestitures.
|
- Volume and mix, net of customer price adjustments including
recoveries, was driven by vehicle production volume increases due
to the stabilization of the supply environment.
- The net impact of foreign currency exchange was primarily
related to the Mexican Peso, Polish Zloty and Euro.
- The Cost (Increases) / Decreases category above includes:
- Commodity cost and inflationary economics;
- Manufacturing and purchasing savings through lean initiatives;
and
- Increased compensation-related expenses.
Cash and Liquidity
As of September 30, 2023, Cooper
Standard had cash and cash equivalents totaling $204.8 million. The cash balance included
$120.0 million in borrowings under
the Company's amended senior asset-based revolving credit
facility. The Company opted to access the credit facility as
a precautionary measure in view of market uncertainty related to
then anticipated OEM labor negotiations and the potential for
interruption of light vehicle production. Total liquidity,
including remaining availability on the revolving credit facility,
was $259.3 million at quarter
end. With tentative labor agreements having recently been
reached between the OEMs and the UAW, significantly reducing the
risk of further work stoppage, the Company has notified its ABL
agent that it intends to repay the $120.0
million in borrowings on November 3,
2023.
Based on current expectations for light vehicle production and
customer demand for our products, the Company believes it has
sufficient financial resources to support ongoing operations and
the execution of planned strategic initiatives for the foreseeable
future. These financial resources include current cash on hand,
continuing access to flexible credit facilities, and expected
future positive cash generation.
Outlook
Industry projections for global light vehicle production
anticipate continued year-over-year growth in the fourth quarter of
2023, despite strike related reductions in North America. The Company expects to continue
leveraging incremental production volumes to drive further growth
and operating efficiencies. In addition, the Company expects to
successfully conclude certain remaining commercial negotiations in
the fourth quarter to drive additional inflation recovery and
positive, sustainable price adjustments. As a result, Company
management has updated full year guidance ranges as follows:
|
Previous 2023
Guidance1
(August
2023)
|
Current 2023
Guidance1
|
Sales
|
$2.6 - $2.8
billion
|
$2.7 - $2.8
billion
|
Adjusted
EBITDA2
|
$150 - $175
million
|
$165 - $180
million
|
Capital
Expenditures
|
$70 - $80
million
|
$70 - $80
million
|
Cash
Restructuring
|
$20 - $25
million
|
$15 - $20
million
|
Cash
Interest
|
$50 - $55
million
|
$50 - $55
million
|
Net Cash
Taxes
|
$10 - $20
million
|
$8 - $12
million
|
Key Light Vehicle
Productions
Assumptions (Units)
|
|
|
North
America
|
15.5 million
|
15.2 million
|
Europe
|
17.4 million
|
17.7 million
|
Greater
China
|
26.6 million
|
27.9 million
|
South
America
|
2.8 million
|
2.9 million
|
|
1 Guidance
is representative of management's estimates and expectations as of
the date it is published. Current guidance as presented in this
press release considers October 2023 S&P Global (IHS
Markit) production forecasts for relevant light vehicle platforms
and models, customers' planned production schedules and other
internal assumptions.
|
2 Adjusted EBITDA is a non-GAAP
financial measure. The Company has not provided a reconciliation of
projected adjusted EBITDA to projected net income (loss) because
full-year net income (loss) will include special items that have
not yet occurred and are difficult to predict with reasonable
certainty prior to year-end. Due to this uncertainty, the Company
cannot reconcile projected adjusted EBITDA to U.S. GAAP net income
(loss) without unreasonable effort.
|
Conference Call Details
Cooper Standard management will host a conference call and
webcast on November 3, 2023 at 9 a.m.
ET to discuss its third quarter 2023 results, provide a
general business update and respond to investor questions.
Investors and other interested parties may listen to the call by
accessing the online, real-time webcast
at https://ir.cooperstandard.com/events.
To participate by phone, callers in the United States and Canada can dial toll-free at 844-378-6482
(international callers dial 412-317-5137) and ask to be connected
to the Cooper Standard conference call. Representatives of the
investment community will have the opportunity to ask questions
during Q&A. Participants should dial-in at least five minutes
prior to the start of the call.
A replay of the webcast will be available on the investors'
portion of the Cooper Standard website
(https://ir.cooperstandard.com) shortly after the live event.
About Cooper Standard
Cooper Standard, headquartered in Northville, Mich., with locations in 21
countries, is a leading global supplier of sealing and fluid
handling systems and components. Utilizing our materials science
and manufacturing expertise, we create innovative and sustainable
engineered solutions for diverse transportation and industrial
markets. Cooper Standard's approximately 23,000 employees are at
the heart of our success, continuously improving our business and
surrounding communities. Learn more at www.cooperstandard.com or
follow us on Twitter @CooperStandard.
Forward Looking Statements
This press release includes "forward-looking statements" within
the meaning of U.S. federal securities laws, and we intend that
such forward-looking statements be subject to the safe harbor
created thereby. Our use of words "estimate," "expect,"
"anticipate," "project," "plan," "intend," "believe," "outlook,"
"guidance," "forecast," or future or conditional verbs, such as
"will," "should," "could," "would," or "may," and variations of
such words or similar expressions are intended to identify
forward-looking statements. All forward-looking statements are
based upon our current expectations and various assumptions. Our
expectations, beliefs, and projections are expressed in good faith
and we believe there is a reasonable basis for them. However, we
cannot assure you that these expectations, beliefs and projections
will be achieved. Forward-looking statements are not guarantees of
future performance and are subject to significant risks and
uncertainties that may cause actual results or achievements to be
materially different from the future results or achievements
expressed or implied by the forward-looking statements. Among other
items, such factors may include: volatility or decline of the
Company's stock price, or absence of stock price appreciation;
impacts, including commodity cost increases and disruptions related
to the war in Ukraine and the
Middle East; our ability to
achieve commercial recoveries and to offset the adverse impact of
higher commodity and other costs through pricing and other
negotiations with our customers; work stoppages or other labor
disruptions with our employees or our customers' employees;
prolonged or material contractions in automotive sales and
production volumes; our inability to realize sales represented by
awarded business; escalating pricing pressures; loss of large
customers or significant platforms; our ability to successfully
compete in the automotive parts industry; availability and
increasing volatility in costs of manufactured components and raw
materials; disruption in our supply base; competitive threats and
commercial risks associated with our diversification strategy
through our Advanced Technology Group; possible variability of our
working capital requirements; risks associated with our
international operations, including changes in laws, regulations,
and policies governing the terms of foreign trade such as increased
trade restrictions and tariffs; foreign currency exchange rate
fluctuations; our ability to control the operations of our joint
ventures for our sole benefit; our substantial amount of
indebtedness and variable rates of interest; our ability to obtain
adequate financing sources in the future; operating and financial
restrictions imposed on us under our debt instruments; the
underfunding of our pension plans; significant changes in discount
rates and the actual return on pension assets; effectiveness of
continuous improvement programs and other cost savings plans;
manufacturing facility closings or consolidation; our ability to
execute new program launches; our ability to meet customers' needs
for new and improved products; the possibility that our
acquisitions and divestitures may not be successful; product
liability, warranty and recall claims brought against us; laws and
regulations, including environmental, health and safety laws and
regulations; legal and regulatory proceedings, claims or
investigations against us; the impact, and expected continued
impact, of the COVID-19 outbreak on our financial condition and
results of operations; significant risks to our liquidity presented
by the COVID-19 pandemic risk; the ability of our intellectual
property to withstand legal challenges; cyber-attacks, data privacy
concerns, other disruptions in, or the inability to implement
upgrades to, our information technology systems; the possible
volatility of our annual effective tax rate; the possibility of a
failure to maintain effective controls and procedures; the
possibility of future impairment charges to our goodwill and
long-lived assets; our ability to identify, attract, develop and
retain a skilled, engaged and diverse workforce; our ability to
procure insurance at reasonable rates; and our dependence on our
subsidiaries for cash to satisfy our obligations.; and other risks
and uncertainties, including those detailed from time to time in
the Company's periodic reports filed with the Securities and
Exchange Commission.
You should not place undue reliance on these forward-looking
statements. Our forward-looking statements speak only as of the
date of this press release and we undertake no obligation to
publicly update or otherwise revise any forward-looking statement,
whether as a result of new information, future events or otherwise,
except where we are expressly required to do so by law.
This press release also contains estimates and other information
that is based on industry publications, surveys and forecasts. This
information involves a number of assumptions and limitations, and
we have not independently verified the accuracy or completeness of
the information.
Contact for
Analysts:
|
Contact for
Media:
|
Roger
Hendriksen
|
Chris
Andrews
|
Cooper
Standard
|
Cooper
Standard
|
(248)
596-6465
|
(248)
596-6217
|
roger.hendriksen@cooperstandard.com
|
candrews@cooperstandard.com
|
Financial statements and related notes follow:
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(Dollar amounts in
thousands except per share and share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales
|
$
736,038
|
|
$
657,153
|
|
$ 2,142,236
|
|
$ 1,876,054
|
Cost of products
sold
|
629,504
|
|
618,594
|
|
1,916,160
|
|
1,800,577
|
Gross
profit
|
106,534
|
|
38,559
|
|
226,076
|
|
75,477
|
Selling,
administration & engineering expenses
|
49,834
|
|
44,847
|
|
156,528
|
|
149,033
|
Loss on sale of
businesses, net
|
334
|
|
—
|
|
334
|
|
—
|
Gain on sale of fixed
assets, net
|
—
|
|
—
|
|
—
|
|
(33,391)
|
Amortization of
intangibles
|
1,662
|
|
1,693
|
|
5,141
|
|
5,176
|
Restructuring
charges
|
2,046
|
|
1,701
|
|
12,924
|
|
13,014
|
Impairment
charges
|
—
|
|
379
|
|
654
|
|
837
|
Operating profit
(loss)
|
52,658
|
|
(10,061)
|
|
50,495
|
|
(59,192)
|
Interest expense, net
of interest income
|
(33,803)
|
|
(20,747)
|
|
(98,057)
|
|
(57,378)
|
Equity in earnings
(losses) of affiliates
|
682
|
|
(3,391)
|
|
1,140
|
|
(8,193)
|
Loss on refinancing and
extinguishment of debt
|
—
|
|
—
|
|
(81,885)
|
|
—
|
Other (expense) income,
net
|
(3,816)
|
|
146
|
|
(10,381)
|
|
(2,574)
|
Income (loss) before
income taxes
|
15,721
|
|
(34,053)
|
|
(138,688)
|
|
(127,337)
|
Income tax expense
(benefit)
|
4,338
|
|
(833)
|
|
9,461
|
|
1,824
|
Net income
(loss)
|
11,383
|
|
(33,220)
|
|
(148,149)
|
|
(129,161)
|
Net (income) loss
attributable to noncontrolling interests
|
(20)
|
|
534
|
|
1,316
|
|
1,868
|
Net income (loss)
attributable to Cooper-Standard
Holdings Inc.
|
$
11,363
|
|
$
(32,686)
|
|
$
(146,833)
|
|
$
(127,293)
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
17,427,082
|
|
17,218,165
|
|
17,331,199
|
|
17,181,534
|
Diluted
|
17,560,221
|
|
17,218,165
|
|
17,331,199
|
|
17,181,534
|
|
|
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.65
|
|
$
(1.90)
|
|
$
(8.47)
|
|
$
(7.41)
|
Diluted
|
$
0.65
|
|
$
(1.90)
|
|
$
(8.47)
|
|
$
(7.41)
|
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollar amounts in
thousands)
|
|
September 30,
2023
|
|
December 31,
2022
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
204,848
|
|
$
186,875
|
Accounts receivable,
net
|
450,963
|
|
358,700
|
Tooling receivable,
net
|
91,818
|
|
95,965
|
Inventories
|
181,050
|
|
157,756
|
Prepaid
expenses
|
28,639
|
|
31,170
|
Income tax receivable
and refundable credits
|
11,530
|
|
13,668
|
Other current
assets
|
95,106
|
|
101,515
|
Total current
assets
|
1,063,954
|
|
945,649
|
Property, plant and
equipment, net
|
608,554
|
|
642,860
|
Operating lease
right-of-use assets, net
|
85,007
|
|
94,571
|
Goodwill
|
140,710
|
|
142,023
|
Intangible assets,
net
|
41,975
|
|
47,641
|
Other assets
|
88,800
|
|
90,785
|
Total
assets
|
$
2,029,000
|
|
$
1,963,529
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Debt payable within
one year
|
$
169,349
|
|
$
54,130
|
Accounts
payable
|
372,657
|
|
338,210
|
Payroll
liabilities
|
114,320
|
|
99,029
|
Accrued
liabilities
|
130,156
|
|
119,463
|
Current operating
lease liabilities
|
18,634
|
|
20,786
|
Total current
liabilities
|
805,116
|
|
631,618
|
Long-term
debt
|
1,029,068
|
|
982,054
|
Pension
benefits
|
99,096
|
|
98,481
|
Postretirement benefits
other than pensions
|
30,678
|
|
31,014
|
Long-term operating
lease liabilities
|
70,237
|
|
77,617
|
Other
liabilities
|
52,181
|
|
41,553
|
Total
liabilities
|
2,086,376
|
|
1,862,337
|
Equity:
|
|
|
|
Common stock, $0.001
par value, 190,000,000 shares authorized;
19,263,288 shares issued and 17,197,479 shares outstanding as
of
September 30, 2023, and 19,173,838 shares issued and 17,108,029
outstanding as of December 31, 2022
|
17
|
|
17
|
Additional paid-in
capital
|
510,122
|
|
507,498
|
Retained
deficit
|
(336,664)
|
|
(189,831)
|
Accumulated other
comprehensive loss
|
(222,659)
|
|
(209,971)
|
Total Cooper-Standard
Holdings Inc. equity
|
(49,184)
|
|
107,713
|
Noncontrolling
interests
|
(8,192)
|
|
(6,521)
|
Total
equity
|
(57,376)
|
|
101,192
|
Total liabilities and
equity
|
$
2,029,000
|
|
$
1,963,529
|
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(Dollar amounts in
thousands)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
Operating
Activities:
|
|
|
|
Net loss
|
$
(148,149)
|
|
$
(129,161)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation
|
77,876
|
|
88,997
|
Amortization of
intangibles
|
5,141
|
|
5,176
|
Loss on sale of
businesses, net
|
334
|
|
—
|
Gain on sale of fixed
assets, net
|
—
|
|
(33,391)
|
Impairment
charges
|
654
|
|
837
|
Share-based
compensation expense
|
4,071
|
|
2,593
|
Equity in losses of
affiliates, net of dividends related to earnings
|
1,159
|
|
11,195
|
Loss on refinancing
and extinguishment of debt
|
81,885
|
|
—
|
Payment-in-kind
interest
|
44,019
|
|
—
|
Deferred income
taxes
|
(586)
|
|
(5,478)
|
Other
|
3,606
|
|
2,383
|
Changes in operating
assets and liabilities
|
(32,394)
|
|
46,489
|
Net cash provided by
(used in) operating activities
|
37,616
|
|
(10,360)
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
(63,184)
|
|
(58,491)
|
Proceeds from sale of
businesses, net of cash divested
|
15,351
|
|
—
|
Proceeds from sale of
fixed assets
|
—
|
|
52,956
|
Other
|
358
|
|
167
|
Net cash used in
investing activities
|
(47,475)
|
|
(5,368)
|
Financing
activities:
|
|
|
|
Proceeds from issuance
of long-term debt, net of debt issuance costs
|
924,299
|
|
—
|
Repayment and
refinancing of long-term debt
|
(927,046)
|
|
—
|
Principal payments on
long-term debt
|
(1,613)
|
|
(3,786)
|
Borrowings on
revolving credit facility, net
|
120,000
|
|
—
|
Decrease in short-term
debt, net
|
(1,241)
|
|
(977)
|
Debt issuance costs
and other fees
|
(74,376)
|
|
—
|
Taxes withheld and
paid on employees' share-based payment awards
|
(214)
|
|
(607)
|
Other
|
(439)
|
|
(688)
|
Net cash provided by
(used in) financing activities
|
39,370
|
|
(6,058)
|
Effects of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(8,307)
|
|
9,296
|
Changes in cash, cash
equivalents and restricted cash
|
21,204
|
|
(12,490)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
192,807
|
|
251,128
|
Cash, cash equivalents
and restricted cash at end of period
|
$
214,011
|
|
$
238,638
|
|
|
|
|
Reconciliation of cash,
cash equivalents and restricted cash to the condensed consolidated
balance sheets:
|
|
Balance as
of
|
|
September 30,
2023
|
|
December 31,
2022
|
Cash and cash
equivalents
|
$
204,848
|
|
$
186,875
|
Restricted cash
included in other current assets
|
7,694
|
|
4,650
|
Restricted cash
included in other assets
|
1,469
|
|
1,282
|
Total cash, cash
equivalents and restricted cash
|
$
214,011
|
|
$
192,807
|
Non-GAAP Measures
EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net
income (loss), adjusted earnings (loss) per share and free cash
flow are measures not recognized under U.S. GAAP and which exclude
certain non-cash and special items that may obscure trends and
operating performance not indicative of the Company's core
financial activities. Net new business is a measure not recognized
under U.S. GAAP which is a representation of potential incremental
future revenue but which may not fully reflect all external impacts
to future revenue. Management considers EBITDA, adjusted EBITDA,
adjusted EBITDA margin, adjusted net income (loss), adjusted
earnings (loss) per share, free cash flow and net new business to
be key indicators of the Company's operating performance and
believes that these and similar measures are widely used by
investors, securities analysts and other interested parties in
evaluating the Company's performance. In addition, similar measures
are utilized in the calculation of the financial covenants and
ratios contained in the Company's financing arrangements and
management uses these measures for developing internal budgets and
forecasting purposes. EBITDA is defined as net income (loss)
adjusted to reflect income tax expense (benefit), interest expense
net of interest income, depreciation and amortization, and adjusted
EBITDA is defined as EBITDA further adjusted to reflect certain
items that management does not consider to be reflective of the
Company's core operating performance. Adjusted net income (loss) is
defined as net income (loss) adjusted to reflect certain items that
management does not consider to be reflective of the Company's core
operating performance. Adjusted EBITDA margin is defined as
adjusted EBITDA as a percentage of sales. Adjusted basic and
diluted earnings (loss) per share is defined as adjusted net income
(loss) divided by the weighted average number of basic and diluted
shares, respectively, outstanding during the period. Free cash flow
is defined as net cash provided by operating activities minus
capital expenditures and is useful to both management and investors
in evaluating the Company's ability to service and repay its debt.
Net new business reflects anticipated sales from formally awarded
programs, less lost business, discontinued programs and
replacement programs and is based on S&P Global (IHS Markit)
forecast production volumes. The calculation of "net new business"
does not reflect customer price reductions on existing programs and
may be impacted by various assumptions embedded in the respective
calculation, including actual vehicle production levels on new
programs, foreign exchange rates and the timing of major program
launches.
When analyzing the Company's operating performance, investors
should use EBITDA, adjusted EBITDA, adjusted EBITDA margin,
adjusted net income (loss), adjusted earnings (loss) per share,
free cash flow and net new business as supplements to, and not as
alternatives for, net income (loss), operating income, or any other
performance measure derived in accordance with U.S. GAAP, and not
as an alternative to cash flow from operating activities as a
measure of the Company's liquidity. EBITDA, adjusted EBITDA,
adjusted net income (loss), adjusted earnings (loss) per share,
free cash flow and net new business have limitations as analytical
tools and should not be considered in isolation or as substitutes
for analysis of the Company's results of operations as reported
under U.S. GAAP. Other companies may report EBITDA, adjusted
EBITDA, adjusted EBITDA margin, adjusted net income (loss),
adjusted earnings (loss) per share, free cash flow and net new
business differently and therefore the Company's results may not be
comparable to other similarly titled measures of other companies.
In addition, in evaluating adjusted EBITDA and adjusted net income
(loss), it should be noted that in the future the Company may incur
expenses similar to or in excess of the adjustments in the below
presentation. This presentation of adjusted EBITDA and adjusted net
income (loss) should not be construed as an inference that the
Company's future results will be unaffected by special items.
Reconciliations of EBITDA, adjusted EBITDA, adjusted EBITDA margin,
adjusted net income (loss) and free cash flow follow.
Reconciliation of Non-GAAP Measures
EBITDA and Adjusted
EBITDA (Unaudited)
(Dollar amounts in thousands)
|
|
The following table
provides a reconciliation of EBITDA and adjusted EBITDA from net
income (loss):
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
attributable to Cooper-Standard
Holdings Inc.
|
$
11,363
|
|
$ (32,686)
|
|
$
(146,833)
|
|
$
(127,293)
|
Income tax expense
(benefit)
|
4,338
|
|
(833)
|
|
9,461
|
|
1,824
|
Interest expense, net
of interest income
|
33,803
|
|
20,747
|
|
98,057
|
|
57,378
|
Depreciation and
amortization
|
27,219
|
|
30,628
|
|
83,017
|
|
94,173
|
EBITDA
|
$
76,723
|
|
$
17,856
|
|
$
43,702
|
|
$
26,082
|
Restructuring
charges
|
2,046
|
|
1,701
|
|
12,924
|
|
13,014
|
Deconsolidation of
joint venture (1)
|
—
|
|
—
|
|
—
|
|
2,257
|
Impairment charges
(2)
|
—
|
|
379
|
|
654
|
|
837
|
Loss on sale of
businesses, net (3)
|
334
|
|
—
|
|
334
|
|
—
|
Gain on sale of fixed
assets, net (4)
|
—
|
|
—
|
|
—
|
|
(33,391)
|
Indirect tax
adjustments (5)
|
—
|
|
569
|
|
—
|
|
1,477
|
Loss on refinancing and
extinguishment of debt (6)
|
—
|
|
—
|
|
81,885
|
|
—
|
Adjusted
EBITDA
|
$
79,103
|
|
$
20,505
|
|
$ 139,499
|
|
$
10,276
|
|
|
|
|
|
|
|
|
Sales
|
$ 736,038
|
|
$ 657,153
|
|
$
2,142,236
|
|
$
1,876,054
|
Net income (loss)
margin
|
1.5 %
|
|
(5.0) %
|
|
(6.9) %
|
|
(6.8) %
|
Adjusted EBITDA
margin
|
10.7 %
|
|
3.1 %
|
|
6.5 %
|
|
0.5 %
|
|
|
(1)
|
Loss attributable to
deconsolidation of a joint venture in the Asia Pacific region,
which required adjustment to fair value.
|
(2)
|
Non-cash impairment
charges in 2023 related to certain assets in Asia Pacific and North
America, and non-cash impairment charges in 2022 related to idle
assets in Europe.
|
(3)
|
Loss on sale of
businesses related to divestitures in 2023.
|
(4)
|
In the first quarter of
2022, the Company signed a sale-leaseback agreement on one of its
European facilities, and a gain was recognized in the second
quarter of 2022.
|
(5)
|
Impact of indirect tax
adjustments in 2022.
|
(6)
|
Loss on refinancing and
extinguishment of debt relating to refinancing transactions in
2023.
|
Adjusted Net Income
(Loss) and Adjusted Income (Loss) Per Share (Unaudited)
(Dollar amounts in thousands except per share and share
amounts)
|
|
The following table
provides a reconciliation of net income (loss) to adjusted net
income (loss) and the respective income
(loss) per share amounts:
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
attributable to Cooper-Standard
Holdings Inc.
|
$
11,363
|
|
$
(32,686)
|
|
$
(146,833)
|
|
$
(127,293)
|
Restructuring
charges
|
2,046
|
|
1,701
|
|
12,924
|
|
13,014
|
Deconsolidation of
joint venture (1)
|
—
|
|
—
|
|
—
|
|
2,257
|
Impairment charges
(2)
|
—
|
|
379
|
|
654
|
|
837
|
Loss on sale of
businesses, net (3)
|
334
|
|
—
|
|
334
|
|
—
|
Gain on sale of fixed
assets, net (4)
|
—
|
|
—
|
|
—
|
|
(33,391)
|
Indirect tax
adjustments (5)
|
—
|
|
569
|
|
—
|
|
1,477
|
Loss on refinancing and
extinguishment of debt (6)
|
—
|
|
—
|
|
81,885
|
|
—
|
Tax impact of adjusting
items (7)
|
1,210
|
|
581
|
|
(145)
|
|
3,765
|
Adjusted net income
(loss)
|
$
14,953
|
|
$
(29,456)
|
|
$
(51,181)
|
|
$
(139,334)
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
17,427,082
|
|
17,218,165
|
|
17,331,199
|
|
17,181,534
|
Diluted
|
17,560,221
|
|
17,218,165
|
|
17,331,199
|
|
17,181,534
|
|
|
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.65
|
|
$
(1.90)
|
|
$
(8.47)
|
|
$
(7.41)
|
Diluted
|
$
0.65
|
|
$
(1.90)
|
|
$
(8.47)
|
|
$
(7.41)
|
|
|
|
|
|
|
|
|
Adjusted income (loss)
per share:
|
|
|
|
|
|
|
|
Basic
|
$
0.86
|
|
$
(1.71)
|
|
$
(2.95)
|
|
$
(8.11)
|
Diluted
|
$
0.85
|
|
$
(1.71)
|
|
$
(2.95)
|
|
$
(8.11)
|
|
|
(1)
|
Loss attributable to
deconsolidation of a joint venture in the Asia Pacific region,
which required adjustment to fair value.
|
(2)
|
Non-cash impairment
charges in 2023 related to certain assets in Asia Pacific and North
America, and non-cash impairment charges in 2022 related to idle
assets in Europe.
|
(3)
|
Loss on sale of
businesses related to divestitures in 2023.
|
(4)
|
In the first quarter of
2022, the Company signed a sale-leaseback agreement on one of its
European facilities, and a gain was recognized in the second
quarter of 2022.
|
(5)
|
Impact of indirect tax
adjustments in 2022.
|
(6)
|
Loss on refinancing and
extinguishment of debt relating to refinancing transactions in
2023.
|
(7)
|
Represents the
elimination of the income tax impact of the above adjustments by
calculating the income tax impact of these adjusting items using
the appropriate tax rate for the jurisdiction where the charges
were incurred and other discrete tax expense.
|
Free Cash
Flow (Unaudited)
(Dollar amounts in thousands)
|
|
The following table
defines free cash flow:
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
(used in) operating activities
|
$
20,466
|
|
$
(10,125)
|
|
$
37,616
|
|
$
(10,360)
|
Capital
expenditures
|
(16,424)
|
|
(14,213)
|
|
(63,184)
|
|
(58,491)
|
Free cash
flow
|
$
4,042
|
|
$
(24,338)
|
|
$
(25,568)
|
|
$
(68,851)
|
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SOURCE Cooper Standard