Cooper Standard Reports Third Quarter Results; Continuing Lean Initiatives Delivering Cost Savings as Planned
Third Quarter
2024 Summary
-
Savings of
$24.5 million realized from lean operations and cost initiatives -
Net loss of
$11.1 million , or$(0.63) per diluted share -
Adjusted net loss of
$12.0 million , or$(0.68) per diluted share -
Adjusted EBITDA of
$46.1 million , or 6.7% of sales -
Net new business awards totaled
$44.0 million
"Our intense focus on lean initiatives and operating efficiency is driving cost savings as planned," said
Consolidated Results
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
(dollar amounts in millions except per share amounts) |
||||||
Sales |
$ 685.4 |
|
$ 736.0 |
|
$ 2,070.1 |
|
$ 2,142.2 |
Net (loss) income |
$ (11.1) |
|
$ 11.4 |
|
$ (119.0) |
|
$ (146.8) |
Adjusted net (loss) income |
$ (12.0) |
|
$ 15.0 |
|
$ (53.9) |
|
$ (51.2) |
(Loss) income per diluted share |
$ (0.63) |
|
$ 0.65 |
|
$ (6.78) |
|
$ (8.47) |
Adjusted (loss) income per diluted share |
$ (0.68) |
|
$ 0.85 |
|
$ (3.07) |
|
$ (2.95) |
Adjusted EBITDA |
$ 46.1 |
|
$ 79.1 |
|
$ 126.4 |
|
$ 139.5 |
The year-over-year change in third quarter sales was primarily attributable to the timing of commercial settlements that occurred in the third quarter of 2023, including approximately
Net loss for the third quarter 2024 was
Adjusted EBITDA for the third quarter of 2024 was
Adjusted net (loss) income, adjusted EBITDA and adjusted (loss) income 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
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 OEM customers and capitalize on positive trends associated with hybrid and battery electric vehicles. During the third quarter of 2024, the Company received net new business awards totaling
Segment Results of Operations
Sales
|
Three Months Ended |
|
|
Variance Due To: |
||||||||
|
2024 |
|
2023 |
|
Change |
|
|
Volume/Mix* |
|
Foreign Exchange |
|
Divestitures |
|
(dollar amounts in thousands) |
|||||||||||
Sales to external customers |
|
|
|
|
|
|
|
|
|
|
|
|
Sealing systems |
$ 353,365 |
|
$ 370,958 |
|
$ (17,593) |
|
|
$ (15,279) |
|
$ (2,314) |
|
$ — |
Fluid handling systems |
313,739 |
|
341,817 |
|
(28,078) |
|
|
(26,795) |
|
(1,283) |
|
— |
Total for reportable segments |
$ 667,104 |
|
$ 712,775 |
|
$ (45,671) |
|
|
$ (42,074) |
|
$ (3,597) |
|
$ — |
Corporate, eliminations and other |
18,249 |
|
23,263 |
|
(5,014) |
|
|
62 |
|
— |
|
(5,076) |
Consolidated |
$ 685,353 |
|
$ 736,038 |
|
$ (50,685) |
|
|
$ (42,012) |
|
$ (3,597) |
|
$ (5,076) |
* Net of customer price adjustments, including recoveries.
Adjusted EBITDA
|
Three Months Ended |
|
|
Variance Due To: |
||||||||
|
2024 |
|
2023 |
|
Change |
|
|
Volume/Mix* |
|
Foreign Exchange |
|
Cost Decreases/ |
|
(dollar amounts in thousands) |
|||||||||||
Segment adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
Sealing systems |
$ 29,904 |
|
$ 39,620 |
|
$ (9,716) |
|
|
$ (16,863) |
|
$ (6,578) |
|
$ 13,725 |
Fluid handling systems |
23,089 |
|
41,292 |
|
(18,203) |
|
|
(25,670) |
|
(2,746) |
|
10,213 |
Total for reportable segments |
$ 52,993 |
|
$ 80,912 |
|
$ (27,919) |
|
|
$ (42,533) |
|
$ (9,324) |
|
$ 23,938 |
Corporate, eliminations and other |
(6,848) |
|
(1,809) |
|
(5,039) |
|
|
92 |
|
(1,687) |
|
(3,444) |
Consolidated |
$ 46,145 |
|
$ 79,103 |
|
$ (32,958) |
|
|
$ (42,441) |
|
$ (11,011) |
|
$ 20,494 |
|
* Net of customer price adjustments, including recoveries. |
Additional detail on our quarterly segment variance analyses is available in our periodic filings with the
Cash and Liquidity
As of
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 full-year global light vehicle production in 2024 have been softening since the beginning of the year and are now slightly lower than levels realized in 2023. While the Company expects to continue leveraging new program launches and enhanced commercial agreements to drive growth, inflation and unfavorable foreign exchange are expected to continue as headwinds. Despite this continued slow growth environment, the Company expects the savings from implemented aggressive lean cost structure initiatives will help drive improvements in profit margins and cash flow in the fourth quarter of 2024 and continuing into 2025.
Reflecting these market dynamics, the Company has updated its full-year 2024 guidance as follows:
|
Initial 2024 Guidance1 |
Current 2024 Guidance1 |
Sales |
|
|
Adjusted EBITDA2 |
|
|
Capital Expenditures |
|
|
Cash Restructuring |
|
|
Net Cash Interest |
|
|
Net Cash Taxes |
|
|
Key Light Vehicle Productions Assumptions (Units) |
|
|
|
15.8 million |
15.5 million |
|
17.4 million |
17.1 million |
|
28.9 million |
29.3 million |
|
3.0 million |
2.9 million |
|
1 Guidance is representative of management's estimates and expectations as of the date it is published. Initial guidance was first presented in our earnings press release published on |
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 |
Conference Call Details
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About
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of
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: |
|
|
|
|
(248) 596-6465 |
(248) 596-6217 |
Financial statements and related notes follow:
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Unaudited) |
|||||||
(Dollar amounts in thousands except per share and share amounts) |
|||||||
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Sales |
$ 685,353 |
|
$ 736,038 |
|
$ 2,070,140 |
|
$ 2,142,236 |
Cost of products sold |
609,041 |
|
629,504 |
|
1,849,245 |
|
1,916,160 |
Gross profit |
76,312 |
|
106,534 |
|
220,895 |
|
226,076 |
Selling, administration & engineering expenses |
49,698 |
|
49,834 |
|
157,472 |
|
156,528 |
Loss on sale of businesses, net |
— |
|
334 |
|
— |
|
334 |
Amortization of intangibles |
1,628 |
|
1,662 |
|
4,894 |
|
5,141 |
Restructuring charges |
1,516 |
|
2,046 |
|
20,430 |
|
12,924 |
Impairment charges |
— |
|
— |
|
— |
|
654 |
Operating income |
23,470 |
|
52,658 |
|
38,099 |
|
50,495 |
Interest expense, net of interest income |
(29,125) |
|
(33,803) |
|
(87,041) |
|
(98,057) |
Equity in earnings of affiliates |
1,258 |
|
682 |
|
4,830 |
|
1,140 |
Loss on refinancing and extinguishment of debt |
— |
|
— |
|
— |
|
(81,885) |
Pension settlement credit (charge) |
2,216 |
|
— |
|
(44,571) |
|
— |
Other expense, net |
(5,851) |
|
(3,816) |
|
(14,629) |
|
(10,381) |
(Loss) income before income taxes |
(8,032) |
|
15,721 |
|
(103,312) |
|
(138,688) |
Income tax expense |
2,861 |
|
4,338 |
|
15,072 |
|
9,461 |
Net (loss) income |
(10,893) |
|
11,383 |
|
(118,384) |
|
(148,149) |
Net (income) loss attributable to noncontrolling interests |
(164) |
|
(20) |
|
(576) |
|
1,316 |
Net (loss) income attributable to |
$ (11,057) |
|
$ 11,363 |
|
$ (118,960) |
|
$ (146,833) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
17,612,001 |
|
17,427,082 |
|
17,546,292 |
|
17,331,199 |
Diluted |
17,612,001 |
|
17,560,221 |
|
17,546,292 |
|
17,331,199 |
|
|
|
|
|
|
|
|
(Loss) income per share: |
|
|
|
|
|
|
|
Basic |
$ (0.63) |
|
$ 0.65 |
|
$ (6.78) |
|
$ (8.47) |
Diluted |
$ (0.63) |
|
$ 0.65 |
|
$ (6.78) |
|
$ (8.47) |
|
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(Dollar amounts in thousands except share amounts) |
|||
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 107,734 |
|
$ 154,801 |
Accounts receivable, net |
386,225 |
|
380,562 |
Tooling receivable, net |
72,712 |
|
80,225 |
Inventories |
177,245 |
|
146,846 |
Prepaid expenses |
33,253 |
|
28,328 |
Value added tax receivable |
54,753 |
|
69,684 |
Other current assets |
40,114 |
|
40,140 |
Total current assets |
872,036 |
|
900,586 |
Property, plant and equipment, net |
565,380 |
|
608,431 |
Operating lease right-of-use assets, net |
90,244 |
|
91,126 |
|
140,727 |
|
140,814 |
Intangible assets, net |
35,758 |
|
40,568 |
Other assets |
93,393 |
|
90,774 |
Total assets |
$ 1,797,538 |
|
$ 1,872,299 |
|
|
|
|
Liabilities and Equity |
|
|
|
Current liabilities: |
|
|
|
Debt payable within one year |
$ 49,167 |
|
$ 50,712 |
Accounts payable |
332,233 |
|
334,578 |
Payroll liabilities |
111,453 |
|
132,422 |
Accrued liabilities |
135,904 |
|
116,954 |
Current operating lease liabilities |
19,433 |
|
18,577 |
Total current liabilities |
648,190 |
|
653,243 |
Long-term debt |
1,058,004 |
|
1,044,736 |
Pension benefits |
100,882 |
|
100,578 |
Postretirement benefits other than pensions |
28,147 |
|
28,940 |
Long-term operating lease liabilities |
74,437 |
|
76,482 |
Other liabilities |
50,928 |
|
58,053 |
Total liabilities |
1,960,588 |
|
1,962,032 |
Equity: |
|
|
|
Common stock, |
17 |
|
17 |
Additional paid-in capital |
515,927 |
|
512,164 |
Retained deficit |
(510,776) |
|
(391,816) |
Accumulated other comprehensive loss |
(160,272) |
|
(201,665) |
|
(155,104) |
|
(81,300) |
Noncontrolling interests |
(7,946) |
|
(8,433) |
Total equity |
(163,050) |
|
(89,733) |
Total liabilities and equity |
$ 1,797,538 |
|
$ 1,872,299 |
|
|||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||
(Unaudited) |
|||
(Dollar amounts in thousands) |
|||
|
|
|
|
|
Nine Months Ended |
||
|
2024 |
|
2023 |
Operating activities: |
|
|
|
Net loss |
$ (118,384) |
|
$ (148,149) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
Depreciation |
73,358 |
|
77,876 |
Amortization of intangibles |
4,894 |
|
5,141 |
Loss on sale of businesses, net |
— |
|
334 |
Impairment charges |
— |
|
654 |
Pension settlement charge |
44,571 |
|
— |
Share-based compensation expense |
7,057 |
|
4,071 |
Equity in (earnings) losses of affiliates, net of dividends related to earnings |
(1,199) |
|
1,159 |
Loss on refinancing and extinguishment of debt |
— |
|
81,885 |
Payment-in-kind interest |
12,367 |
|
44,019 |
Deferred income taxes |
1,889 |
|
(586) |
Other |
4,036 |
|
3,606 |
Changes in operating assets and liabilities |
(26,942) |
|
(32,394) |
Net cash provided by operating activities |
1,647 |
|
37,616 |
Investing activities: |
|
|
|
Capital expenditures |
(39,014) |
|
(63,184) |
Proceeds from sale of businesses, net of cash divested |
— |
|
15,351 |
Other |
287 |
|
358 |
Net cash used in investing activities |
(38,727) |
|
(47,475) |
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 |
(1,901) |
|
(1,613) |
Borrowings on revolving credit facility, net |
— |
|
120,000 |
Decrease in short-term debt, net |
(2,356) |
|
(1,241) |
Debt issuance costs and other fees |
(1,921) |
|
(74,376) |
Taxes withheld and paid on employees' share-based payment awards |
(612) |
|
(214) |
Other |
— |
|
(439) |
Net cash (used in) provided by financing activities |
(6,790) |
|
39,370 |
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
(2,569) |
|
(8,307) |
Changes in cash, cash equivalents and restricted cash |
(46,439) |
|
21,204 |
Cash, cash equivalents and restricted cash at beginning of period |
163,061 |
|
192,807 |
Cash, cash equivalents and restricted cash at end of period |
$ 116,622 |
|
$ 214,011 |
|
|
|
|
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets: |
|||
|
Balance as of |
||
|
|
|
|
Cash and cash equivalents |
$ 107,734 |
|
$ 154,801 |
Restricted cash included in other current assets |
7,176 |
|
7,244 |
Restricted cash included in other assets |
1,712 |
|
1,016 |
Total cash, cash equivalents and restricted cash |
$ 116,622 |
|
$ 163,061 |
Non-GAAP Financial 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
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
Reconciliation of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA |
|||||||
|
|||||||
The following table provides a reconciliation of EBITDA and adjusted EBITDA from net (loss) income: |
|||||||
|
|||||||
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net (loss) income attributable to |
$ (11,057) |
|
$ 11,363 |
|
$ (118,960) |
|
$ (146,833) |
Income tax expense |
2,861 |
|
4,338 |
|
15,072 |
|
9,461 |
Interest expense, net of interest income |
29,125 |
|
33,803 |
|
87,041 |
|
98,057 |
Depreciation and amortization |
25,916 |
|
27,219 |
|
78,252 |
|
83,017 |
EBITDA |
$ 46,845 |
|
$ 76,723 |
|
$ 61,405 |
|
$ 43,702 |
Restructuring charges |
1,516 |
|
2,046 |
|
20,430 |
|
12,924 |
Impairment charges (1) |
— |
|
— |
|
— |
|
654 |
Loss on sale of businesses, net (2) |
— |
|
334 |
|
— |
|
334 |
Loss on refinancing and extinguishment of debt (3) |
— |
|
— |
|
— |
|
81,885 |
Pension settlement (credit) charge (4) |
(2,216) |
|
— |
|
44,571 |
|
— |
Adjusted EBITDA |
$ 46,145 |
|
$ 79,103 |
|
$ 126,406 |
|
$ 139,499 |
|
|
|
|
|
|
|
|
Sales |
$ 685,353 |
|
$ 736,038 |
|
$ 2,070,140 |
|
$ 2,142,236 |
Net (loss) income margin |
(1.6) % |
|
1.5 % |
|
(5.7) % |
|
(6.9) % |
Adjusted EBITDA margin |
6.7 % |
|
10.7 % |
|
6.1 % |
|
6.5 % |
|
|
(1) |
Non-cash impairment charges in 2023 related to certain assets in |
(2) |
Loss on sale of businesses related to divestitures in 2023. |
(3) |
Loss on refinancing and extinguishment of debt relating to refinancing transactions in 2023. |
(4) |
Pension credit and one-time, non-cash pension settlement charge and administrative fees incurred related to the termination of the Company's U.S. pension plan. |
Adjusted Net (Loss) Income and Adjusted (Loss) Income Per Share (Unaudited) (Dollar amounts in thousands except per share and share amounts) |
|||||||
|
|||||||
The following table provides a reconciliation of net (loss) income to adjusted net (loss) income and the respective (loss) income per share amounts: |
|||||||
|
|||||||
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net (loss) income attributable to |
$ (11,057) |
|
$ 11,363 |
|
$ (118,960) |
|
$ (146,833) |
Restructuring charges |
1,516 |
|
2,046 |
|
20,430 |
|
12,924 |
Impairment charges (1) |
— |
|
— |
|
— |
|
654 |
Loss on sale of businesses, net (2) |
— |
|
334 |
|
— |
|
334 |
Loss on refinancing and extinguishment of debt (3) |
— |
|
— |
|
— |
|
81,885 |
Pension settlement (credit) charge (4) |
(2,216) |
|
— |
|
44,571 |
|
— |
Tax impact of adjusting items (5) |
(255) |
|
1,210 |
|
68 |
|
(145) |
Adjusted net (loss) income |
$ (12,012) |
|
$ 14,953 |
|
$ (53,891) |
|
$ (51,181) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
17,612,001 |
|
17,427,082 |
|
17,546,292 |
|
17,331,199 |
Diluted |
17,612,001 |
|
17,560,221 |
|
17,546,292 |
|
17,331,199 |
|
|
|
|
|
|
|
|
(Loss) income per share: |
|
|
|
|
|
|
|
Basic |
$ (0.63) |
|
$ 0.65 |
|
$ (6.78) |
|
$ (8.47) |
Diluted |
$ (0.63) |
|
$ 0.65 |
|
$ (6.78) |
|
$ (8.47) |
|
|
|
|
|
|
|
|
Adjusted (loss) income per share: |
|
|
|
|
|
|
|
Basic |
$ (0.68) |
|
$ 0.86 |
|
$ (3.07) |
|
$ (2.95) |
Diluted |
$ (0.68) |
|
$ 0.85 |
|
$ (3.07) |
|
$ (2.95) |
|
|
(1) |
Non-cash impairment charges in 2023 related to certain assets in |
(2) |
Loss on sale of businesses related to divestitures in 2023. |
(3) |
Loss on refinancing and extinguishment of debt relating to refinancing transactions in 2023. |
(4) |
Pension credit and one-time, non-cash pension settlement charge and administrative fees incurred related to the termination of the Company's U.S. pension plan. |
(5) |
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 |
|||||||
|
|||||||
The following table defines free cash flow: |
|||||||
|
|||||||
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net cash provided by operating activities |
$ 27,859 |
|
$ 20,466 |
|
$ 1,647 |
|
$ 37,616 |
Capital expenditures |
(10,937) |
|
(16,424) |
|
(39,014) |
|
(63,184) |
Free cash flow |
$ 16,922 |
|
$ 4,042 |
|
$ (37,367) |
|
$ (25,568) |
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