NORTHVILLE, Mich., Aug. 3, 2023
/PRNewswire/ -- Cooper-Standard Holdings Inc. (NYSE: CPS) today
reported results for the second quarter 2023.
Second Quarter 2023 Summary
- Sales totaled $723.7 million,
an increase of 19.4% compared to second quarter 2022
- Gross profit totaled $77.7
million, an increase of 405.4% compared to second quarter
2022
- Net loss of $27.8 million, or
$(1.61) per diluted share, reflected
an improvement of $5.4 million vs.
the second quarter 2022
- Adjusted EBITDA of $47.9
million, or 6.6% of sales, increased by $58.3 million vs. the second quarter
2022
- Net new business awards of $84.9
million, including $36.4
million related to new electric vehicle programs
"Our second quarter results reflect continuing world-class
operational execution and performance, improved and more stable
production volumes, and the continuing implementation of our
enhanced commercial agreements," said Jeffrey Edwards, chairman and CEO, Cooper
Standard. "We believe these positive trends and margin expansion
will continue through the second half of the year, putting us on
track to achieve full year results in line with our initial 2023
guidance."
Consolidated Results
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(dollar amounts in
millions except per share amounts)
|
Sales
|
$
723.7
|
|
$
605.9
|
|
$
1,406.2
|
|
$
1,218.9
|
Net loss
|
$
(27.8)
|
|
$
(33.2)
|
|
$
(158.2)
|
|
$
(94.6)
|
Adjusted net
loss
|
$
(20.0)
|
|
$
(58.5)
|
|
$
(66.1)
|
|
$
(109.9)
|
Loss per diluted
share
|
$
(1.61)
|
|
$
(1.93)
|
|
$
(9.15)
|
|
$
(5.51)
|
Adjusted loss per
diluted share
|
$
(1.15)
|
|
$
(3.40)
|
|
$
(3.83)
|
|
$
(6.40)
|
Adjusted
EBITDA
|
$
47.9
|
|
$
(10.4)
|
|
$
60.4
|
|
$
(10.2)
|
The year-over-year increase in second quarter sales was
primarily attributable to favorable volume and mix as well as
realized recoveries of material cost inflation, which are reflected
in customer price adjustments. These were partially offset by
foreign exchange.
Net loss for the second quarter 2023 was $27.8 million, including restructuring charges of
$8.5 million and other special items.
Net loss for the second quarter 2022 was $33.2 million, including restructuring charges of
$3.5 million and other special items.
Adjusted net loss, which excludes restructuring, other special
items and their related tax impact, was $20.0 million in the second quarter 2023 compared
to adjusted net loss of $58.5 million
in the second quarter of 2022. The year-over-year improvement was
primarily due to improved volume and mix and favorable price
adjustments, partially offset by higher interest expense,
continuing inflationary pressure, including higher labor and energy
costs, and unfavorable foreign exchange.
Adjusted EBITDA for the second quarter of 2023 was $47.9 million compared to $(10.4) million in the second 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 loss, adjusted EBITDA and adjusted 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 second quarter of 2023, the Company
received total net new business awards representing $84.9 million in incremental anticipated future
annualized sales. The total included $36.4
million in net new business awards on electric vehicle
platforms.
Segment Results of Operations
Sales
|
Three Months Ended
June 30,
|
|
|
Variance Due
To:
|
|
2023
|
|
2022
|
|
Change
|
|
|
Volume /
Mix*
|
|
Foreign
Exchange
|
|
(dollar amounts in
thousands)
|
Sales to external
customers
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
368,810
|
|
$
331,687
|
|
$ 37,123
|
|
|
$ 39,691
|
|
$ (2,568)
|
Europe
|
177,897
|
|
126,287
|
|
51,610
|
|
|
47,513
|
|
4,097
|
Asia
Pacific
|
111,222
|
|
85,779
|
|
25,443
|
|
|
31,750
|
|
(6,307)
|
South
America
|
33,514
|
|
26,261
|
|
7,253
|
|
|
7,460
|
|
(207)
|
Total
Automotive
|
691,443
|
|
570,014
|
|
121,429
|
|
|
126,414
|
|
(4,985)
|
Corporate,
eliminations and other
|
32,297
|
|
35,903
|
|
(3,606)
|
|
|
(3,905)
|
|
299
|
Consolidated sales
|
$
723,740
|
|
$
605,917
|
|
$
117,823
|
|
|
$
122,509
|
|
$ (4,686)
|
|
* 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 and
elimination of prior year COVID-19 related restrictions in
China.
- The impact of foreign currency exchange was primarily related
to the Chinese Renminbi, Euro and Canadian Dollar.
Adjusted EBITDA
|
Three Months Ended
June 30,
|
|
|
Variance Due
To:
|
|
2023
|
|
2022
|
|
Change
|
|
|
Volume/
Mix*
|
|
Foreign
Exchange
|
|
Cost
(Increases)/
Decreases
|
|
(dollar amounts in
thousands)
|
Segment adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
23,849
|
|
$
15,441
|
|
$
8,408
|
|
|
$
11,632
|
|
$
(8,280)
|
|
$
5,056
|
Europe
|
16,260
|
|
(15,316)
|
|
31,576
|
|
|
31,036
|
|
(1,559)
|
|
2,099
|
Asia
Pacific
|
7,194
|
|
(7,799)
|
|
14,993
|
|
|
9,700
|
|
2,093
|
|
3,200
|
South
America
|
3,375
|
|
(1,298)
|
|
4,673
|
|
|
2,194
|
|
1,679
|
|
800
|
Total
Automotive
|
50,678
|
|
(8,972)
|
|
59,650
|
|
|
54,562
|
|
(6,067)
|
|
11,155
|
Corporate,
eliminations and other
|
(2,739)
|
|
(1,402)
|
|
(1,337)
|
|
|
615
|
|
100
|
|
(2,052)
|
Consolidated adjusted EBITDA
|
$
47,939
|
|
$ (10,374)
|
|
$
58,313
|
|
|
$
55,177
|
|
$
(5,967)
|
|
$
9,103
|
|
* Net of
customer price adjustments, including recoveries
|
- 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 and elimination of
prior year COVID-19 related restrictions in China.
- The impact of foreign currency exchange was primarily related
to the Mexican Peso, Canadian Dollar and Polish Zloty.
- The Cost (Increases) / Decreases category above
includes:
-
- Commodity cost and inflationary economics; and
- Manufacturing and purchasing savings through lean
initiatives.
Cash and Liquidity
As of June 30, 2023, Cooper
Standard had cash and cash equivalents totaling $73.1 million. Total liquidity, including
availability under the Company's amended senior asset-based
revolving credit facility, was $229.6
million at the end of the second quarter 2023. The amended
senior asset-based revolving credit facility was undrawn at quarter
end.
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 modest growth through the remainder of the
year. The Company expects to leverage incremental production
volumes to drive further operating efficiencies. In addition, the
Company expects to successfully conclude certain remaining
commercial negotiations in the third quarter to drive additional
inflation recovery and positive, sustainable price adjustments. As
a result, the Company anticipates delivering further top line
growth and margin expansion in the second half of the year. For the
full year, Company management expects results for Sales and
Adjusted EBITDA will be in line with the initial 2023 guidance it
provided in February.
|
Initial 2023
Guidance1
(February
2023)
|
Current 2023
Guidance
|
Sales
|
$2.6 - $2.8
billion
|
$2.6 - $2.8
billion
|
Adjusted
EBITDA2
|
$150 - $175
million
|
$150 - $175
million
|
Capital
Expenditures
|
$70 - $80
million
|
$70 - $80
million
|
Cash
Restructuring
|
$35 - $40
million
|
$20 - $25
million
|
Cash
Interest
|
$50 - $55
million
|
$50 - $55
million
|
Net Cash
Taxes
|
$10 - $20
million
|
$10 - $20
million
|
Key Light Vehicle
Productions
Assumptions (Units)
|
|
|
North
America
|
15.1 million
|
15.5
million
|
Europe
|
16.5 million
|
17.4 million
|
Greater
China
|
26.6 million
|
26.6 million
|
South
America
|
3.0 million
|
2.8 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 July 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 August 4, 2023 at 9 a.m.
ET to discuss its second 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 877-870-4263
(international callers dial 412-317-0790) 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
COVID-related lockdowns in China;
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; 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; 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; work stoppages or other labor
disruptions with our employees or our customers' employees; 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales
|
$
723,740
|
|
$
605,917
|
|
$
1,406,198
|
|
$
1,218,901
|
Cost of products
sold
|
646,026
|
|
590,541
|
|
1,286,656
|
|
1,181,983
|
Gross
profit
|
77,714
|
|
15,376
|
|
119,542
|
|
36,918
|
Selling,
administration & engineering expenses
|
54,605
|
|
52,282
|
|
106,694
|
|
104,186
|
Gain on sale of fixed
assets, net
|
—
|
|
(33,391)
|
|
—
|
|
(33,391)
|
Amortization of
intangibles
|
1,672
|
|
1,737
|
|
3,479
|
|
3,483
|
Restructuring
charges
|
8,499
|
|
3,482
|
|
10,878
|
|
11,313
|
Impairment
charges
|
654
|
|
3
|
|
654
|
|
458
|
Operating profit
(loss)
|
12,284
|
|
(8,737)
|
|
(2,163)
|
|
(49,131)
|
Interest expense, net
of interest income
|
(34,034)
|
|
(18,454)
|
|
(64,254)
|
|
(36,631)
|
Equity in earnings
(losses) of affiliates
|
656
|
|
(3,446)
|
|
458
|
|
(4,802)
|
Loss on refinancing and
extinguishment of debt
|
—
|
|
—
|
|
(81,885)
|
|
—
|
Other expense,
net
|
(2,561)
|
|
(1,509)
|
|
(6,565)
|
|
(2,720)
|
Loss before income
taxes
|
(23,655)
|
|
(32,146)
|
|
(154,409)
|
|
(93,284)
|
Income tax
expense
|
4,765
|
|
2,005
|
|
5,123
|
|
2,657
|
Net loss
|
(28,420)
|
|
(34,151)
|
|
(159,532)
|
|
(95,941)
|
Net loss attributable
to noncontrolling interests
|
591
|
|
904
|
|
1,336
|
|
1,334
|
Net loss attributable
to Cooper-Standard Holdings Inc.
|
$
(27,829)
|
|
$
(33,247)
|
|
$
(158,196)
|
|
$
(94,607)
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
17,334,918
|
|
17,189,128
|
|
17,282,462
|
|
17,162,915
|
Diluted
|
17,334,918
|
|
17,189,128
|
|
17,282,462
|
|
17,162,915
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(1.61)
|
|
$
(1.93)
|
|
$
(9.15)
|
|
$
(5.51)
|
Diluted
|
$
(1.61)
|
|
$
(1.93)
|
|
$
(9.15)
|
|
$
(5.51)
|
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollar amounts in
thousands)
|
|
June 30,
2023
|
|
December 31,
2022
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
73,063
|
|
$
186,875
|
Accounts receivable,
net
|
390,033
|
|
358,700
|
Tooling receivable,
net
|
94,579
|
|
95,965
|
Inventories
|
172,999
|
|
157,756
|
Prepaid
expenses
|
25,779
|
|
31,170
|
Income tax receivable
and refundable credits
|
13,315
|
|
13,668
|
Other current
assets
|
114,108
|
|
101,515
|
Total current
assets
|
883,876
|
|
945,649
|
Property, plant and
equipment, net
|
624,073
|
|
642,860
|
Operating lease
right-of-use assets, net
|
87,341
|
|
94,571
|
Goodwill
|
142,114
|
|
142,023
|
Intangible assets,
net
|
43,702
|
|
47,641
|
Other assets
|
89,713
|
|
90,785
|
Total
assets
|
$
1,870,819
|
|
$
1,963,529
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Debt payable within
one year
|
$
49,813
|
|
$
54,130
|
Accounts
payable
|
357,682
|
|
338,210
|
Payroll
liabilities
|
106,865
|
|
99,029
|
Accrued
liabilities
|
141,956
|
|
119,463
|
Current operating
lease liabilities
|
19,099
|
|
20,786
|
Total current
liabilities
|
675,415
|
|
631,618
|
Long-term
debt
|
1,012,289
|
|
982,054
|
Pension
benefits
|
101,369
|
|
98,481
|
Postretirement benefits
other than pensions
|
31,163
|
|
31,014
|
Long-term operating
lease liabilities
|
72,156
|
|
77,617
|
Other
liabilities
|
40,130
|
|
41,553
|
Total
liabilities
|
1,932,522
|
|
1,862,337
|
Equity:
|
|
|
|
Common stock, $0.001
par value, 190,000,000 shares authorized;
19,262,362 shares issued and 17,196,553 shares outstanding as
of
June 30, 2023, and 19,173,838 shares issued and 17,108,029
outstanding as of December 31, 2022
|
17
|
|
17
|
Additional paid-in
capital
|
509,106
|
|
507,498
|
Retained
deficit
|
(348,027)
|
|
(189,831)
|
Accumulated other
comprehensive loss
|
(215,325)
|
|
(209,971)
|
Total Cooper-Standard
Holdings Inc. equity
|
(54,229)
|
|
107,713
|
Noncontrolling
interests
|
(7,474)
|
|
(6,521)
|
Total
equity
|
(61,703)
|
|
101,192
|
Total liabilities and
equity
|
$
1,870,819
|
|
$
1,963,529
|
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(Dollar amounts in
thousands)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
Operating
Activities:
|
|
|
|
Net loss
|
$
(159,532)
|
|
$
(95,941)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation
|
52,319
|
|
60,062
|
Amortization of
intangibles
|
3,479
|
|
3,483
|
Gain on sale of fixed
assets, net
|
—
|
|
(33,391)
|
Impairment
charges
|
654
|
|
458
|
Share-based
compensation expense
|
2,705
|
|
1,625
|
Equity in losses of
affiliates, net of dividends related to earnings
|
720
|
|
7,804
|
Loss on refinancing
and extinguishment of debt
|
81,885
|
|
—
|
Payment-in-kind
interest
|
27,500
|
|
—
|
Deferred income
taxes
|
20
|
|
(5,096)
|
Other
|
2,376
|
|
1,178
|
Changes in operating
assets and liabilities
|
5,024
|
|
59,583
|
Net cash provided by
(used in) operating activities
|
17,150
|
|
(235)
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
(46,760)
|
|
(44,278)
|
Proceeds from sale of
fixed assets
|
—
|
|
52,633
|
Other
|
1,638
|
|
32
|
Net cash (used in)
provided by investing activities
|
(45,122)
|
|
8,387
|
Financing
activities:
|
|
|
|
Proceeds from issuance
of long-term debt, net of debt issuance costs
|
925,020
|
|
—
|
Repayment and
refinancing of long-term debt
|
(927,046)
|
|
—
|
Principal payments on
long-term debt
|
(949)
|
|
(2,536)
|
Decrease in short-term
debt, net
|
(1,240)
|
|
(1,666)
|
Debt issuance costs
and other fees
|
(74,376)
|
|
—
|
Taxes withheld and
paid on employees' share-based payment awards
|
(209)
|
|
(526)
|
Other
|
(238)
|
|
651
|
Net cash used in
financing activities
|
(79,038)
|
|
(4,077)
|
Effects of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(4,565)
|
|
7,103
|
Changes in cash, cash
equivalents and restricted cash
|
(111,575)
|
|
11,178
|
Cash, cash equivalents
and restricted cash at beginning of period
|
192,807
|
|
251,128
|
Cash, cash equivalents
and restricted cash at end of period
|
$
81,232
|
|
$
262,306
|
|
|
|
|
Reconciliation of cash,
cash equivalents and restricted cash to the condensed consolidated
balance sheets:
|
|
Balance as
of
|
|
June 30,
2023
|
|
December 31,
2022
|
Cash and cash
equivalents
|
$
73,063
|
|
$
186,875
|
Restricted cash
included in other current assets
|
6,550
|
|
4,650
|
Restricted cash
included in other assets
|
1,619
|
|
1,282
|
Total cash, cash
equivalents and restricted cash
|
$
81,232
|
|
$
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
loss:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net loss attributable
to Cooper-Standard Holdings Inc.
|
$ (27,829)
|
|
$ (33,247)
|
|
$
(158,196)
|
|
$ (94,607)
|
Income tax
expense
|
4,765
|
|
2,005
|
|
5,123
|
|
2,657
|
Interest expense, net
of interest income
|
34,034
|
|
18,454
|
|
64,254
|
|
36,631
|
Depreciation and
amortization
|
27,816
|
|
31,412
|
|
55,798
|
|
63,545
|
EBITDA
|
$
38,786
|
|
$
18,624
|
|
$ (33,021)
|
|
$
8,226
|
Restructuring
charges
|
8,499
|
|
3,482
|
|
10,878
|
|
11,313
|
Deconsolidation of
joint venture (1)
|
—
|
|
—
|
|
—
|
|
2,257
|
Impairment charges
(2)
|
654
|
|
3
|
|
654
|
|
458
|
Gain on sale of fixed
assets, net (3)
|
—
|
|
(33,391)
|
|
—
|
|
(33,391)
|
Indirect tax
adjustments (4)
|
—
|
|
908
|
|
—
|
|
908
|
Loss on refinancing and
extinguishment of debt (5)
|
—
|
|
—
|
|
81,885
|
|
—
|
Adjusted
EBITDA
|
$
47,939
|
|
$ (10,374)
|
|
$
60,396
|
|
$ (10,229)
|
|
|
|
|
|
|
|
|
Sales
|
$ 723,740
|
|
$ 605,917
|
|
$
1,406,198
|
|
$
1,218,901
|
Net loss
margin
|
(3.8) %
|
|
(5.5) %
|
|
(11.2) %
|
|
(7.8) %
|
Adjusted EBITDA
margin
|
6.6 %
|
|
(1.7) %
|
|
4.3 %
|
|
(0.8) %
|
|
|
(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
non-cash impairment charges in 2022 related to idle assets in
Europe.
|
(3)
|
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.
|
(4)
|
Impact of prior period
indirect tax adjustments.
|
(5)
|
Loss on refinancing and
extinguishment of debt relating to the Refinancing
Transactions.
|
Adjusted Net Loss
and Adjusted Loss Per Share (Unaudited)
(Dollar amounts in thousands except per share and share
amounts)
|
|
The following table
provides a reconciliation of net loss to adjusted net loss and the
respective loss per share amounts:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net loss attributable
to Cooper-Standard Holdings Inc.
|
$
(27,829)
|
|
$
(33,247)
|
|
$
(158,196)
|
|
$
(94,607)
|
Restructuring
charges
|
8,499
|
|
3,482
|
|
10,878
|
|
11,313
|
Deconsolidation of
joint venture (1)
|
—
|
|
—
|
|
—
|
|
2,257
|
Impairment charges
(2)
|
654
|
|
3
|
|
654
|
|
458
|
Gain on sale of fixed
assets, net (3)
|
—
|
|
(33,391)
|
|
—
|
|
(33,391)
|
Indirect tax
adjustments (4)
|
—
|
|
908
|
|
—
|
|
908
|
Loss on refinancing and
extinguishment of debt (5)
|
—
|
|
—
|
|
81,885
|
|
—
|
Tax impact of adjusting
items (6)
|
(1,284)
|
|
3,768
|
|
(1,355)
|
|
3,184
|
Adjusted net
loss
|
$
(19,960)
|
|
$
(58,477)
|
|
$
(66,134)
|
|
$
(109,878)
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
17,334,918
|
|
17,189,128
|
|
17,282,462
|
|
17,162,915
|
Diluted
|
17,334,918
|
|
17,189,128
|
|
17,282,462
|
|
17,162,915
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(1.61)
|
|
$
(1.93)
|
|
$
(9.15)
|
|
$
(5.51)
|
Diluted
|
$
(1.61)
|
|
$
(1.93)
|
|
$
(9.15)
|
|
$
(5.51)
|
|
|
|
|
|
|
|
|
Adjusted loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(1.15)
|
|
$
(3.40)
|
|
$
(3.83)
|
|
$
(6.40)
|
Diluted
|
$
(1.15)
|
|
$
(3.40)
|
|
$
(3.83)
|
|
$
(6.40)
|
|
|
(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
non-cash impairment charges in 2022 related to idle assets in
Europe.
|
(3)
|
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.
|
(4)
|
Impact of prior period
indirect tax adjustments.
|
(5)
|
Loss on refinancing and
extinguishment of debt relating to the Refinancing
Transactions.
|
(6)
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash (used in)
provided by operating activities
|
$
(13,229)
|
|
$
11,978
|
|
$
17,150
|
|
$
(235)
|
Capital
expenditures
|
(17,497)
|
|
(11,964)
|
|
(46,760)
|
|
(44,278)
|
Free cash
flow
|
$
(30,726)
|
|
$
14
|
|
$
(29,610)
|
|
$
(44,513)
|
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SOURCE Cooper Standard