(NewsDirect)
Cooper-StandardHoldings Inc. (“Cooper Standard” or the “Company”) (NYSE: CPS)today announced that its Board of Directors (the “Board”) adopteda tax benefits preservation plan (the “Rights Agreement”) in aneffort to protect stockholder value by attempting to protect against apossible limitation on the Company’s ability to use its netoperating losses, any loss or deduction attributable to a “netunrealized built-in loss” and other tax attributes (collectively,“Tax Benefits”) under the Internal Revenue Code (the“Code”).
As ofSeptember 30, 2022, Cooper Standard’s estimated U.S. Tax Benefitsare approximately $130 million, which may be available to offset itsfuture taxable income. The Company views its Tax Benefits as highlyvaluable assets, which are likely to inure to the benefit of theCompany and its stockholders. However, if the Company experiences an“ownership change,” as defined in Section 382 of the Code, itsability to use the Tax Benefits could be substantially limited, andthe timing of the usage of the Tax Benefits could be substantiallydelayed, which could significantly impair the value of the TaxBenefits. Generally, an “ownership change” occurs if thepercentage of the Company’s stock owned by one or more “fivepercent stockholders” increases by more than fifty percentage pointsover the lowest percentage of stock owned by such stockholders at anytime during the prior three-year period or, if sooner, since the last“ownership change” experienced by the Company.
The Rights Agreement isintended to act as a deterrent to any person acquiring 4.9% or more ofthe outstanding shares (an “acquiring person”) of the Company’scommon stock without the approval of the Board. This would protect theTax Benefits because changes in ownership by a person owning less than4.9% of the common stock are not included in the calculation of“ownership change” for purposes of Section 382 of the Code.
The record date for thedistribution of the rights is November 17, 2022. Under the RightsAgreement, the rights will initially trade with the Company’s commonstock and will generally become exercisable only if a person (or anypersons acting as a group) acquires 4.9% or more of the Company’soutstanding common stock. If the rights become exercisable, allholders of rights (other than any triggering person) will be entitledto acquire shares of common stock at a 50% discount. Under the RightsAgreement, any person who currently owns 4.9% or more of theCompany’s common stock may continue to own its shares of commonstock but may not acquire any additional shares without triggering theRights Agreement. Under the Rights Agreement, the Board has thediscretion to exempt any transaction and to exempt any person (orgroup of persons) from the provisions of the Rights Agreement.
The rights expire,unless earlier terminated, on the earliest to occur of: (i) November6, 2025; (ii) the time at which the rights are redeemed; (iii) thetime at which all exercisable rights are exchanged; (iv) November 6,2023, if the approval of the Company’s stockholders of the RightsAgreement has not been obtained by that date; (v) the repeal ofSection 382 of the Code if the Board determines that the RightsAgreement is no longer necessary or desirable for the preservation ofthe Tax Benefits; or (vii) the time at which the Board determines thatthe Tax Benefits are fully utilized or no longer available underSection 382 of the Code.
Additional information about the Rights Agreement is availableon a Form 8-K filed by Cooper Standard with the U.S. Securities andExchange Commission.
About Cooper Standard
Cooper Standard, headquartered in Northville,Mich., with locations in 21 countries, is a leading global supplier ofsealing and fluid handling systems and components. Utilizing ourmaterials science and manufacturing expertise, we create innovativeand sustainable engineered solutions for diverse transportation andindustrial markets. Cooper Standard's approximately 23,000employees are at the heart of our success, continuously improving ourbusiness and surrounding communities. Learn more at www.cooperstandard.com orfollow us on Twitter @CooperStandard.
Forward-Looking Statements
This press releaseincludes “forward-looking statements” within the meaning of U.S.federal securities laws, and we intend that such forward-lookingstatements be subject to the safe harbor created thereby. Our use ofwords “estimate,” “expect,” “anticipate,” “project,”“plan,” “intend,” “believe,” “outlook,”“guidance,” “forecast,” or future or conditional verbs, suchas “will,” “should,” “could,” “would,” or “may,”and variations of such words or similar expressions are intended toidentify forward-looking statements. All forward-looking statementsare based upon our current expectations and various assumptions. Ourexpectations, beliefs, and projections are expressed in good faith andwe believe there is a reasonable basis for them. However, we cannotassure you that these expectations, beliefs and projections will beachieved. Forward-looking statements are not guarantees of futureperformance and are subject to significant risks and uncertaintiesthat may cause actual results or achievements to be materiallydifferent from the future results or achievements expressed or impliedby the forward-looking statements. Among other items, such factors mayinclude: Volatility or decline of the Company’s stock price, orabsence of stock price appreciation; impacts, including commodity costincreases and disruptions related to the war in Ukraine and thecurrent COVID-related lockdowns in China; our ability to offset theadverse impact of higher commodity and other costs throughnegotiations with our customers; the impact, and expected continuedimpact, of the COVID-19 outbreak on our financial condition andresults of operations; significant risks to our liquidity presented bythe COVID-19 pandemic risk; prolonged or material contractions inautomotive sales and production volumes; our inability to realizesales represented by awarded business; escalating pricing pressures;loss of large customers or significant platforms; our ability tosuccessfully compete in the automotive parts industry; availabilityand increasing volatility in costs of manufactured components and rawmaterials; disruption in our supply base; competitive threats andcommercial risks associated with our diversification strategy throughour Advanced Technology Group; possible variability of our workingcapital requirements; risks associated with our internationaloperations, including changes in laws, regulations, and policiesgoverning the terms of foreign trade such as increased traderestrictions and tariffs; foreign currency exchange rate fluctuations;our ability to control the operations of our joint ventures for oursole benefit; our substantial amount of indebtedness and variablerates of interest; our ability to obtain adequate financing sources inthe future; operating and financial restrictions imposed on us underour debt instruments; the underfunding of our pension plans;significant changes in discount rates and the actual return on pensionassets; effectiveness of continuous improvement programs and othercost savings plans; manufacturing facility closings or consolidation;our ability to execute new program launches; our ability to meetcustomers’ needs for new and improved products; the possibility thatour acquisitions and divestitures may not be successful; productliability, warranty and recall claims brought against us; laws andregulations, including environmental, health and safety laws andregulations; legal and regulatory proceedings, claims orinvestigations against us; work stoppages or other labor disruptions;the ability of our intellectual property to withstand legalchallenges; cyber-attacks, data privacy concerns, other disruptionsin, or the inability to implement upgrades to, our informationtechnology systems; the possible volatility of our annual effectivetax rate; the possibility of a failure to maintain effective controlsand procedures; the possibility of future impairment charges to ourgoodwill and long-lived assets; our ability to identify, attract,develop and retain a skilled, engaged and diverse workforce; ourability to procure insurance at reasonable rates; and our dependenceon our subsidiaries for cash to satisfy our obligations; and otherrisks and uncertainties, including those detailed from time to time inthe Company’s periodic reports filed with the Securities andExchange Commission.
You should not place undue reliance on these forward-lookingstatements. Our forward-looking statements speak only as of the dateof this press release and we undertake no obligation to publiclyupdate or otherwise revise any forward-looking statement, whether as aresult of new information, future events or otherwise, except where weare expressly required to do so by law.
This press release also contains references toestimates and other information that are based on industrypublications, surveys and forecasts. This information involves anumber of assumptions and limitations, and we have not independentlyverified the accuracy or completeness of the information.
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ContactDetails
Contact for Analysts:
RogerHendriksen
+1 248-596-6465
roger.hendriksen@cooperstandard.com
Contactfor Media:
Chris Andrews
+1 248-596-6217
CompanyWebsite
https://www.cooperstandard.com/
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