(NewsDirect)
Cooper-StandardHoldings Inc. (NYSE: CPS) today reported results for the third quarter2021.
ThirdQuarter 2021 Summary
- Sales totaled $526.7 million,reflecting the negative impact of ongoing semiconductor-relatedcustomer schedule reductions
- Net loss amounted to$123.2 million or $(7.20) per diluted share
- AdjustedEBITDA totaled $(33.9) million, including the negative impact ofsemiconductor-related customer schedule reductions, higher materialscosts and allowance for credit loss
- Electric Vehicleplatforms accounted for approximately $30 million in net new businessawards
- Subsequent to quarter end, the Company reached along-term commercial agreement to license itsFortrex TM technology to a footwearmanufacturer
“Our operating teams continue to deliver world-classproducts, technology and service to our customers around the worlddespite significant ongoing headwinds and challenges,” said JeffreyEdwards, chairman and CEO, Cooper Standard. “Our commercial teamsare engaged in aggressive discussions with our customers and suppliersto offset the incremental costs we have incurred from volatileproduction schedules and materials price inflation. We remain focusedon optimizing those aspects of our business that are within ourcontrol and on executing our longer-term strategicinitiatives.”
ConsolidatedResults
| ThreeMonths Ended September 30, |
| Nine MonthsEnded September 30, | ||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
| (dollar amounts in millions except pershare amounts) | ||||||||||
Sales | $ 526.7 |
|
| $ 683.2 |
|
| $ 1,728.8 |
|
| $ 1,678.6 |
|
Net (loss)income | $ (123.2) |
|
| $ 4.4 |
|
| $ (220.6) |
|
| $ (240.4) |
|
Adjusted net (loss)income | $ (106.4) |
|
| $ 3.6 |
|
| $ (172.0) |
|
| $ (144.7) |
|
(Loss) earnings perdiluted share | $ (7.20) |
|
| $ 0.26 |
|
| $ (12.96) |
|
| $ (14.22) |
|
Adjusted (loss) earningsper diluted share | $ (6.23) |
|
| $ 0.21 |
|
| $ (10.10) |
|
| $ (8.56) |
|
AdjustedEBITDA | $ (33.9) |
|
| $ 64.1 |
|
| $ (10.0) |
|
| $ (21.3) |
|
The year-over-yearchange in third quarter sales was primarily attributable tounfavorable volume and mix resulting from semiconductor-relatedcustomer schedule reductions.
Net (loss) income for the third quarter 2021included a non-cash deferred tax valuation allowance of $13.3 million,restructuring charges of $1.6 million and other special items. Net(loss) income for the third quarter 2020 included restructuringcharges of $6.2 million and other special items. Adjusted net (loss)income, which excludes these items and their related tax impact, was$(106.4) million in the third quarter 2021 compared to $3.6 million inthe third quarter of 2020. The year-over-year change was primarily dueto unfavorable volume and mix resulting from semiconductor-relatedcustomer schedule reductions, higher commodity and material costs,general inflation and the one-time impact of a credit loss for certainaccounts receivable deemed to be unrecoverable.
In the first nine monthsof the year, the year-over-year increase in sales was primarilyattributable to the non-recurrence of COVID-19 related customershutdowns, partially offset by unfavorable volume and mix resultingfrom semiconductor-related customer schedule reductions.
Net (loss) income forthe first nine months of 2021 included restructuring charges of $34.3million, a non-cash deferred tax valuation allowance of $13.3 millionand other special items. Net (loss) income for the first nine monthsof 2020 included asset impairment charges of $87.4 million,restructuring charges of $23.2 million and other special items.Adjusted net (loss) income, which excludes these items and theirrelated tax impact, was $(172.0) million in the first nine months of2021 compared to $(144.7) million in the first nine months of 2020.The year-over-year change was primarily due to unfavorable volume andmix resulting from semiconductor-related customer schedule reductions,higher commodity and material costs, higher interest expense, wageinflation and lower tax benefit partially offset by the non-recurrenceof COVID-related customer shutdowns, improved manufacturing efficiencyand lower SGA&E expense.
Adjusted net (loss) income, adjusted EBITDA andadjusted (loss) earnings per diluted share are non-GAAP measures.Reconciliations to the most directly comparable financial measures,calculated and presented in accordance with accounting principlesgenerally accepted in the United States (“U.S. GAAP”), areprovided in the attached supplemental schedules.
Automotive NewBusiness Awards
The Company continues to leverage its world-class engineeringand manufacturing capabilities, its innovation programs and itsreputation for quality and service to win new business awards with itscustomers. During the third quarter of 2021, the Company received netnew business awards representing approximately $30 million inincremental anticipated future annualized sales. Importantly, thesenet new business awards were primarily on electric vehicle platforms.For the first nine months of 2021, the Company's net new businessawards totaled $160.1 million, with $88.4 million in new awards onelectric vehicle platforms.
Notable Events - Expanding Markets forFortrex TM Technology
Subsequent to the end ofthe third quarter, the Company finalized a long-term commercialagreement with a footwear manufacturer granting them license to useFortrex TM technology in the manufacture of their footwearproducts. The agreement calls for the payment of licensing fees andongoing volume-based royalties with an established minimum value. Theagreement is for a 10 year term and is non-exclusive. In accordancewith the terms of the agreement, the identity of the footwearmanufacturer and specific financial terms will not be disclosed.
The Company iscontinuing technology development work to further leverage thesustainability advantages of Fortrex TM technology in bothautomotive and non-automotive applications.
Segment Results ofOperations
Sales
| ThreeMonths Ended September 30, |
|
| Variance DueTo: | ||||||||||||
| 2021 |
| 2020 |
| Change |
|
| Volume / Mix* |
| Foreign Exchange |
| |||||
| (dollar amounts inthousands) | |||||||||||||||
Sales toexternal customers |
|
|
|
|
|
|
|
|
|
|
| |||||
North America | $ 270,592 |
|
| $ 359,007 |
|
| $ (88,415) |
|
|
| $ (89,665) |
|
| $ 1,250 |
|
|
Europe | 98,682 |
|
| 146,029 |
|
| (47,347) |
|
|
| (48,118) |
|
| 771 |
|
|
AsiaPacific | 109,526 |
|
| 131,063 |
|
| (21,537) |
|
|
| (27,813) |
|
| 6,276 |
|
|
SouthAmerica | 15,981 |
|
| 17,580 |
|
| (1,599) |
|
|
| (2,042) |
|
| 443 |
|
|
Total Automotive | 494,781 |
|
| 653,679 |
|
| (158,898) |
|
|
| (167,638) |
|
| 8,740 |
|
|
Corporate,eliminations and other | 31,909 |
|
| 29,521 |
|
| 2,388 |
|
|
| 2,290 |
|
| 98 |
|
|
Consolidated sales | $ 526,690 |
|
| $ 683,200 |
|
| $ (156,510) |
|
|
| $ (165,348) |
|
| $ 8,838 |
|
|
* Net of customer price reductions
-
Volume and mix, net ofcustomer price reductions, was driven by vehicle production volumedecreases due to semiconductor-related customer schedule reductions.
-
Theimpact of foreign currency exchange primarily related to the ChineseRenminbi, Canadian Dollar, Euro and Brazilian Real.
Adjusted EBITDA
| ThreeMonths Ended September 30, |
|
| Variance DueTo: | |||||||||||||||
| 2021 |
| 2020 |
| Change |
|
| Volume/ Mix* |
| Foreign Exchange |
| Cost (Increases)/Decreases |
| ||||||
| (dollar amounts inthousands) | ||||||||||||||||||
Segment adjustedEBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
North America | $ 8,817 |
|
| $ 58,115 |
|
| $ (49,298) |
|
|
| $ (33,462) |
|
| $ (3,606) |
|
| $ (12,230) |
|
|
Europe | (25,112) |
|
| (1,466) |
|
| (23,646) |
|
|
| (18,621) |
|
| (197) |
|
| (4,828) |
|
|
Asia Pacific | (14,274) |
|
| 12,246 |
|
| (26,520) |
|
|
| (12,204) |
|
| (2,015) |
|
| (12,301) |
|
|
South America | (3,422) |
|
| (2,680) |
|
| (742) |
|
|
| (322) |
|
| 529 |
|
| (949) |
|
|
TotalAutomotive | (33,991) |
|
| 66,215 |
|
| (100,206) |
|
|
| (64,609) |
|
| (5,289) |
|
| (30,308) |
|
|
Corporate, eliminations and other | 132 |
|
| (2,081) |
|
| 2,213 |
|
|
| 1,038 |
|
| (162) |
|
| 1,337 |
|
|
Consolidated adjusted EBITDA | $ (33,859) |
|
| $ 64,134 |
|
| $ (97,993) |
|
|
| $ (63,571) |
|
| $ (5,451) |
|
| $ (28,971) |
|
|
* Net of customer pricereductions
-
Volume and mix, net of customer price reductions, was driven byvehicle production volume decreases due to semi-conductor-relatedcustomer schedule reductions.
-
The impact of foreign currency exchange wasdriven by the Chinese Renminbi, Mexican Peso, Canadian Dollar, Euro,Polish Zloty, Czech Koruna, and Brazilian Real.
-
The Cost (Increases) /Decreases category above includes:
-
Commodity cost, wage inflation increasesand the non-recurrence of prior year government incentives;
-
The one-time impact of $11.2 million credit lossfor certain accounts receivable related to the bankruptcy proceedingsof a former joint venture in Asia; and
-
Reduction in compensation-related expenses due to lower variableemployee compensation expenses, salaried headcount initiatives,purchasing savings through lean initiatives, and restructuringsavings.
-
Cash and Liquidity
At September 30, 2021,Cooper Standard had cash and cash equivalents totaling $253.3 millionand total liquidity, including availability under its amended seniorasset-based revolving credit facility, of $380.2 million. Based on ourcurrent expectations for light vehicle production and customer demandfor our products, we expect our current solid cash balance and accessto flexible credit facilities will provide sufficient resources tosupport ongoing operations and the execution of planned strategicinitiatives.
Outlook
Entering the fourth quarter, light vehicle manufacturers andtheir suppliers continue to experience significant production delaysand disruption due to the ongoing global semiconductor shortage andother supply chain constraints. Significantly higher commodity andmaterials costs, rising wages, general inflation and tight laboravailability continue to create additional headwinds. At the sametime, consumer demand for new light vehicles remains strong and U.S.dealer inventories remain at or near historic lows.
Current customerschedules and industry forecasts suggest production volumes will beginto improve in the fourth quarter and continue to ramp up in the firsthalf of 2022. The projected ramp up remains dependent on the availablesupply of semiconductors and could be impacted by further supply anddemand imbalance or disruption.
Based on our outlook for the global automotiveindustry, macroeconomic conditions, current customer productionschedules and our own operating plans, the Company has updated its2021 full year guidance as follows:
| Current 2021 Guidance 1 |
Sales | $ 2.30 - $2.34billion |
AdjustedEBITDA 2 | $(25) - $(10) million |
CapitalExpenditures | ~$100 million |
Cash Restructuring | $ 40 - $45 million |
Cash Taxes | ~$10million |
1 Guidance is representative of management's estimatesand expectations as of the date it is published. Current guidance aspresented in this press release considers October 2021 IHS Markitproduction forecasts for relevant light vehicle platforms and models,customers' planned production schedules and other internalassumptions.
2 Adjusted EBITDA is a non-GAAPfinancial measure. The Company has not provided a reconciliation ofprojected adjusted EBITDA to projected net income because full-yearnet income will include special items that have not yet occurred andare difficult to predict with reasonable certainty prior to year-end.Due to this uncertainty, the Company cannot reconcile projectedadjusted EBITDA to U.S. GAAP net income without unreasonableeffort.
Conference Call Details
Cooper Standard management will host a conferencecall and webcast on November 4, 2021 at 9:00 a.m. ET to discuss itsthird quarter 2021 results, provide a general business update andrespond to investor questions. A link to the live webcast of the call(listen only) and presentation materials will be available on CooperStandard’s Investor Relations website at www.ir.cooperstandard.com/events.cfm .
To participate by phone,callers in the United States and Canada should dial toll-free (877)374-4041. International callers should dial (253) 237-1156. Providethe conference ID 8759104 or ask to be connected to the CooperStandard conference call. Representatives of the investment communitywill have the opportunity to ask questions after the presentation.Callers should dial in at least five minutes prior to the start of thecall.
Individualsunable to participate during the live call may visit the investors’portion of the Cooper Standard website ( www.ir.cooperstandard.com )for a replay of the webcast.
About Cooper Standard
Cooper Standard,headquartered in Northville, Mich., with locations in 21 countries, isa leading global supplier of sealing and fluid handling systems andcomponents. Utilizing our materials science and manufacturingexpertise, we create innovative and sustainable engineered solutionsfor diverse transportation and industrial markets. CooperStandard's approximately 25,000 employees are at the heart of oursuccess, continuously improving our business and surroundingcommunities. 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: the impact, and expected continued impact, of the COVID-19outbreak on our financial condition and results of operations;significant risks to our liquidity presented by the COVID-19 pandemicrisk; prolonged or material contractions in automotive sales andproduction volumes; our inability to realize sales represented byawarded business; escalating pricing pressures; loss of largecustomers or significant platforms; our ability to successfullycompete in the automotive parts industry; availability and increasingvolatility in costs of manufactured components and raw materials;disruption in our supply base; competitive threats and commercialrisks associated with our diversification strategy through ourAdvanced Technology Group; possible variability of our working capitalrequirements; risks associated with our international operations,including changes in laws, regulations, and policies governing theterms of foreign trade such as increased trade restrictions andtariffs; foreign currency exchange rate fluctuations; our ability tocontrol the operations of our joint ventures for our sole benefit; oursubstantial amount of indebtedness and variable rates of interest; ourability to obtain adequate financing sources in the future; operatingand financial restrictions imposed on us under our debt instruments;the underfunding of our pension plans; significant changes in discountrates and the actual return on pension assets; effectiveness ofcontinuous improvement programs and other cost savings plans;manufacturing facility closings or consolidation; our ability toexecute new program launches; our ability to meet customers’ needsfor new and improved products; the possibility that our acquisitionsand divestitures may not be successful; product liability, warrantyand recall claims brought against us; laws and regulations, includingenvironmental, health and safety laws and regulations; legal andregulatory proceedings, claims or investigations against us; workstoppages or other labor disruptions; the ability of our intellectualproperty to withstand legal challenges; cyber-attacks, data privacyconcerns, other disruptions in, or the inability to implement upgradesto, our information technology systems; the possible volatility of ourannual effective tax rate; the possibility of a failure to maintaineffective controls and procedures; the possibility of futureimpairment charges to our goodwill and long-lived assets; our abilityto identify, attract, develop and retain a skilled, engaged anddiverse workforce; our ability to procure insurance at reasonablerates; and our dependence on our subsidiaries for cash to satisfy ourobligations; and other risks and uncertainties, including thosedetailed from time to time in the Company’s periodic reports filedwith the Securities and Exchange Commission.
You should not placeundue reliance on these forward-looking statements. Ourforward-looking statements speak only as of the date of this pressrelease and we undertake no obligation to publicly update or otherwiserevise any forward-looking statement, whether as a result of newinformation, future events or otherwise, except where we are expresslyrequired to do so by law.
This press release also contains estimates and otherinformation that is based on industry publications, surveys andforecasts. This information involves a number of assumptions andlimitations, and we have not independently verified the accuracy orcompleteness of the information.
CPS_F
Financial statements and related notes follow:
COOPER-STANDARD HOLDINGSINC. | |||||||||||
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(Unaudited) | |||||||||||
(Dollar amounts in thousands except pershare and share amounts) | |||||||||||
|
|
|
|
|
|
|
| ||||
| ThreeMonths Ended September 30, |
| Nine MonthsEnded September 30, | ||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Sales | $ 526,690 |
|
| $ 683,200 |
|
| $ 1,728,842 |
|
| $ 1,678,557 |
|
Cost of productssold | 534,817 |
|
| 598,714 |
|
| 1,669,610 |
|
| 1,611,299 |
|
Gross (loss)profit | (8,127) |
|
| 84,486 |
|
| 59,232 |
|
| 67,258 |
|
Selling,administration & engineering expenses | 60,367 |
|
| 60,059 |
|
| 168,506 |
|
| 199,001 |
|
Gain onsale of business, net | — |
|
| (2,314) |
|
| (696) |
|
| (2,314) |
|
Amortization of intangibles | 1,819 |
|
| 1,669 |
|
| 5,524 |
|
| 9,632 |
|
Restructuring charges | 1,573 |
|
| 6,186 |
|
| 34,251 |
|
| 23,236 |
|
Impairmentcharges | 1,006 |
|
| 100 |
|
| 1,847 |
|
| 87,710 |
|
Operating(loss) profit | (72,892) |
|
| 18,786 |
|
| (150,200) |
|
| (250,007) |
|
Interest expense, net of interestincome | (18,243) |
|
| (17,985) |
|
| (54,152) |
|
| (40,993) |
|
Equity in (losses) earnings ofaffiliates | (1,114) |
|
| 738 |
|
| 65 |
|
| (842) |
|
Other (expense) income, net | (494) |
|
| 2,784 |
|
| (4,221) |
|
| (5,357) |
|
(Loss) income before income taxes | (92,743) |
|
| 4,323 |
|
| (208,508) |
|
| (297,199) |
|
Income tax expense (benefit) | 32,121 |
|
| (2,386) |
|
| 15,598 |
|
| (55,485) |
|
Net (loss) income | (124,864) |
|
| 6,709 |
|
| (224,106) |
|
| (241,714) |
|
Net loss (income) attributable tononcontrolling interests | 1,691 |
|
| (2,328) |
|
| 3,458 |
|
| 1,288 |
|
Net (loss)income attributable to Cooper-Standard Holdings Inc. | $ (123,173) |
|
| $ 4,381 |
|
| $ (220,648) |
|
| $ (240,426) |
|
|
|
|
|
|
|
|
| ||||
Weighted average sharesoutstanding |
|
|
|
|
|
|
| ||||
Basic | 17,097,766 |
|
| 16,927,924 |
|
| 17,027,226 |
|
| 16,908,940 |
|
Diluted | 17,097,766 |
|
| 17,014,955 |
|
| 17,027,226 |
|
| 16,908,940 |
|
|
|
|
|
|
|
|
| ||||
(Loss)earnings per share: |
|
|
|
|
|
|
| ||||
Basic | $ (7.20) |
|
| $ 0.26 |
|
| $ (12.96) |
|
| $ (14.22) |
|
Diluted | $ (7.20) |
|
| $ 0.26 |
|
| $ (12.96) |
|
| $ (14.22) |
|
COOPER-STANDARD HOLDINGS INC. | |||||
CONDENSED CONSOLIDATED BALANCESHEETS | |||||
(Dollaramounts in thousands) | |||||
| September 30, 2021 |
| December 31, 2020 | ||
| (unaudited) |
|
| ||
Assets |
|
|
| ||
Current assets: |
|
|
| ||
Cash and cash equivalents | $ 253,281 |
|
| $ 438,438 |
|
Accounts receivable, net | 308,907 |
|
| 379,564 |
|
Tooling receivable, net | 97,500 |
|
| 82,150 |
|
Inventories | 198,180 |
|
| 143,742 |
|
Prepaid expenses | 30,052 |
|
| 29,748 |
|
Income tax receivable and refundablecredits | 83,089 |
|
| 85,977 |
|
Other currentassets | 100,629 |
|
| 100,110 |
|
Total currentassets | 1,071,638 |
|
| 1,259,729 |
|
Property, plant and equipment,net | 808,666 |
|
| 892,309 |
|
Operating lease right-of-useassets, net | 102,698 |
|
| 109,795 |
|
Goodwill | 142,668 |
|
| 142,250 |
|
Intangibleassets, net | 61,980 |
|
| 67,679 |
|
Other assets | 130,941 |
|
| 140,182 |
|
Totalassets | $ 2,318,591 |
|
| $ 2,611,944 |
|
|
|
|
| ||
Liabilities and Equity |
|
|
| ||
Currentliabilities: |
|
|
| ||
Debt payablewithin one year | $ 40,102 |
|
| $ 40,731 |
|
Accountspayable | 336,440 |
|
| 385,284 |
|
Payrollliabilities | 87,280 |
|
| 112,727 |
|
Accruedliabilities | 122,400 |
|
| 110,827 |
|
Currentoperating lease liabilities | 21,407 |
|
| 21,711 |
|
Total currentliabilities | 607,629 |
|
| 671,280 |
|
Long-term debt | 981,010 |
|
| 982,760 |
|
Pensionbenefits | 141,562 |
|
| 152,230 |
|
Postretirement benefits otherthan pensions | 49,936 |
|
| 49,613 |
|
Long-term operating leaseliabilities | 84,891 |
|
| 90,517 |
|
Other liabilities | 47,111 |
|
| 41,433 |
|
Totalliabilities | 1,912,139 |
|
| 1,987,833 |
|
Equity: |
|
|
| ||
Common stock | 17 |
|
| 17 |
|
Additional paid-in capital | 502,864 |
|
| 498,719 |
|
Retained earnings | 129,622 |
|
| 350,270 |
|
Accumulated other comprehensive loss | (239,308) |
|
| (241,896) |
|
Total Cooper-Standard Holdings Inc. equity | 393,195 |
|
| 607,110 |
|
Noncontrolling interests | 13,257 |
|
| 17,001 |
|
Totalequity | 406,452 |
|
| 624,111 |
|
Totalliabilities and equity | $ 2,318,591 |
|
| $ 2,611,944 |
|
COOPER-STANDARD HOLDINGS INC. | |||||
CONDENSED CONSOLIDATED STATEMENTS OFCASH FLOWS | |||||
(Unaudited) | |||||
(Dollar amounts in thousands) | |||||
|
|
|
| ||
| Nine Months Ended September 30, | ||||
| 2021 |
| 2020 | ||
OperatingActivities: |
|
|
| ||
Netloss | $ (224,106) |
|
| $ (241,714) |
|
Adjustments to reconcilenet loss to net cash used in operating activities: |
|
|
| ||
Depreciation | 99,497 |
|
| 107,095 |
|
Amortization of intangibles | 5,524 |
|
| 9,632 |
|
Gain on sale of business, net | (696) |
|
| (2,314) |
|
Impairmentcharges | 1,847 |
|
| 87,710 |
|
Share-basedcompensation expense | 4,781 |
|
| 6,977 |
|
Equity inearnings of affiliates, net of dividends related toearnings | 2,146 |
|
| 6,087 |
|
Deferredincome taxes | 9,785 |
|
| (32,308) |
|
Other | 2,219 |
|
| 4,354 |
|
Changes inoperating assets and liabilities | (12,485) |
|
| 27,949 |
|
Net cash usedin operating activities | (111,488) |
|
| (26,532) |
|
Investing activities: |
|
|
| ||
Capital expenditures | (75,965) |
|
| (73,407) |
|
Proceeds from sale ofbusiness, net of cash divested | — |
|
| (17,006) |
|
Proceeds from sale offixed assets and other | 3,130 |
|
| 963 |
|
Net cash usedin investing activities | (72,835) |
|
| (89,450) |
|
Financing activities: |
|
|
| ||
Proceeds from issuance oflong-term debt, net of discount
| — |
|
| 245,000 |
|
Principalpayments on long-term debt | (4,227) |
|
| (4,792) |
|
Decrease in short-termdebt, net | (597) |
|
| (6,897) |
|
Debt issuancecosts | — |
|
| (6,722) |
|
Taxeswithheld and paid on employees' share-based paymentawards | (777) |
|
| (533) |
|
Other | 884 |
|
| (925) |
|
Net cash (used in) provided by financing activities | (4,717) |
|
| 225,131 |
|
Effects ofexchange rate changes on cash, cash equivalents and restrictedcash | 7,853 |
|
| (5,718) |
|
Changes in cash,cash equivalents and restricted cash | (181,187) |
|
| 103,431 |
|
Cash, cashequivalents and restricted cash at beginning of period | 443,578 |
|
| 361,742 |
|
Cash, cash equivalents andrestricted cash at end of period | $ 262,391 |
|
| $ 465,173 |
|
|
|
|
| ||
Reconciliation of cash, cash equivalents andrestricted cash to the condensed consolidated balancesheet: | |||||
| Balance asof | ||||
| September30, 2021 |
| December31, 2020 | ||
Cash and cashequivalents | $ 253,281 |
|
| $ 438,438 |
|
Restricted cash included inother current assets | 6,467 |
|
| 4,089 |
|
Restricted cash included inother assets | 2,643 |
|
| 1,051 |
|
Total cash, cash equivalents andrestricted cash | $ 262,391 |
|
| $ 443,578 |
|
Non-GAAPMeasures
EBITDA, adjusted EBITDA, adjusted net income(loss), adjusted earnings (loss) per share and free cash flow aremeasures not recognized under U.S. GAAP and which exclude certainnon-cash and special items that may obscure trends and operatingperformance not indicative of the Company’s core financialactivities. Net new business is a measure not recognized under U.S.GAAP which is a representation of potential incremental future revenuebut which may not fully reflect all external impacts to futurerevenue. Management considers EBITDA, adjusted EBITDA, adjusted netincome (loss), adjusted earnings (loss) per share, free cash flow andnet new business to be key indicators of the Company’s operatingperformance and believes that these and similar measures are widelyused by investors, securities analysts and other interested parties inevaluating the Company’s performance. In addition, similar measuresare utilized in the calculation of the financial covenants and ratioscontained in the Company’s financing arrangements and managementuses these measures for developing internal budgets and forecastingpurposes. EBITDA is defined as net income (loss) adjusted to reflectincome tax expense (benefit), interest expense net of interest income,depreciation and amortization, and adjusted EBITDA is defined asEBITDA further adjusted to reflect certain items that management doesnot consider to be reflective of the Company’s core operatingperformance. Adjusted net income (loss) is defined as net income(loss) adjusted to reflect certain items that management does notconsider to be reflective of the Company’s core operatingperformance. Adjusted basic and diluted earnings (loss) per share isdefined as adjusted net income (loss) divided by the weighted averagenumber of basic and diluted shares, respectively, outstanding duringthe period. Free cash flow is defined as net cash provided byoperating activities minus capital expenditures and is useful to bothmanagement and investors in evaluating the Company’s ability toservice and repay its debt. Net new business reflects anticipatedsales from formally awarded programs, less lost business, discontinuedprograms and replacement programs and is based on IHS Markit forecastproduction volumes. The calculation of “net new business” does notreflect customer price reductions on existing programs and may beimpacted by various assumptions embedded in the respectivecalculation, including actual vehicle production levels on newprograms, foreign exchange rates and the timing of major programlaunches.
Whenanalyzing the Company’s operating performance, investors should useEBITDA, adjusted EBITDA, adjusted net income (loss), adjusted earnings(loss) per share, free cash flow and net new business as supplementsto, 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 ameasure of the Company’s liquidity. EBITDA, adjusted EBITDA,adjusted net income (loss), adjusted earnings (loss) per share, netdebt, free cash flow and net new business have limitations asanalytical tools and should not be considered in isolation or assubstitutes for analysis of the Company’s results of operations asreported under U.S. GAAP. Other companies may report EBITDA, adjustedEBITDA, adjusted net income (loss), adjusted earnings (loss) pershare, free cash flow and net new business differently and thereforethe Company’s results may not be comparable to other similarlytitled measures of other companies. In addition, in evaluatingadjusted EBITDA and adjusted net income (loss), it should be notedthat in the future the Company may incur expenses similar to or inexcess of the adjustments in the below presentation. This presentationof adjusted EBITDA and adjusted net income (loss) should not beconstrued as an inference that the Company’s future results will beunaffected by special items. Reconciliations of EBITDA, adjustedEBITDA, adjusted net income (loss) and free cash flow follow.
Reconciliation ofNon-GAAP Measures
EBITDA and Adjusted EBITDA
(Unaudited)
(Dollar amounts in thousands)
The following tableprovides a reconciliation of EBITDA and adjusted EBITDA from net(loss) income:
| ThreeMonths Ended September 30, |
| Nine MonthsEnded September 30, | ||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Net (loss)income attributable to Cooper-Standard Holdings Inc. | $ (123,173) |
|
| $ 4,381 |
|
| $ (220,648) |
|
| $ (240,426) |
|
Income taxexpense (benefit) | 32,121 |
|
| (2,386) |
|
| 15,598 |
|
| (55,485) |
|
Interest expense, net ofinterest income | 18,243 |
|
| 17,985 |
|
| 54,152 |
|
| 40,993 |
|
Depreciation andamortization | 36,049 |
|
| 36,504 |
|
| 105,021 |
|
| 116,727 |
|
EBITDA | $ (36,760) |
|
| $ 56,484 |
|
| $ (45,877) |
|
| $ (138,191) |
|
Restructuring charges | 1,573 |
|
| 6,186 |
|
| 34,251 |
|
| 23,236 |
|
Impairment charges (1) | 1,006 |
|
| 100 |
|
| 1,847 |
|
| 87,417 |
|
Gain on sale of business, net (2) | — |
|
| (2,314) |
|
| (696) |
|
| (2,314) |
|
Lease termination costs (3) | 322 |
|
| 83 |
|
| 430 |
|
| 684 |
|
Project costs (4) | — |
|
| — |
|
| — |
|
| 4,234 |
|
Divested noncontrolling interestdebt extinguishment | — |
|
| 3,595 |
|
| — |
|
| 3,595 |
|
AdjustedEBITDA | $ (33,859) |
|
| $ 64,134 |
|
| $ (10,045) |
|
| $ (21,339) |
|
|
|
|
|
|
|
|
| ||||
Sales | $ 526,690 |
|
| $ 683,200 |
|
| $ 1,728,842 |
|
| $ 1,678,557 |
|
Net (loss)income margin | % (23.4) |
| % 0.6 |
| % (12.8) |
| % (14.3) | ||||
Adjusted EBITDA margin | % (6.4) |
| % 9.4 |
| % (0.6) |
| % (1.3) |
1 Non-cashimpairment charges in 2021 related to fixed assets. Non-cashimpairment charges in 2020 included impairment of assets held for saleand other impairment charges, net of portion attributable to ournoncontrolling interests.
2 During 2021, we recorded subsequentadjustments to the net gain on sale of business, which related to the2020 divestiture of our European rubber fluid transfer and specialtysealing businesses.
3 Lease termination costs no longer recordedas restructuring charges in accordance with ASC 842.
4 Project costsrecorded in selling, administration and engineering expense related todivestitures in 2020.
Adjusted Net (Loss) Income and Adjusted (Loss)Income Per Share
(Unaudited)
(Dollar amounts in thousands except per share and shareamounts)
Thefollowing table provides a reconciliation of net (loss) income toadjusted net (loss) income and the respective (loss) earnings pershare amounts:
| ThreeMonths Ended September 30, |
| Nine MonthsEnded September 30, | ||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Net (loss)income attributable to Cooper-Standard Holdings Inc. | $ (123,173) |
|
| $ 4,381 |
|
| $ (220,648) |
|
| $ (240,426) |
|
Restructuring charges | 1,573 |
|
| 6,186 |
|
| 34,251 |
|
| 23,236 |
|
Impairmentcharges (1) | 1,006 |
|
| 100 |
|
| 1,847 |
|
| 87,417 |
|
Gain on sale of business, net (2) | — |
|
| (2,314) |
|
| (696) |
|
| (2,314) |
|
Lease termination costs (3) | 322 |
|
| 83 |
|
| 430 |
|
| 684 |
|
Project costs (4) | — |
|
| — |
|
| — |
|
| 4,234 |
|
Divested noncontrolling interestdebt extinguishment | — |
|
| 3,595 |
|
| — |
|
| 3,595 |
|
Deferred tax valuation allowance (5) | 13,278 |
|
| — |
|
| 13,278 |
|
| — |
|
Tax impact of adjustingitems (6) | 560 |
|
| (8,433) |
|
| (484) |
|
| (21,102) |
|
Adjusted net (loss) income | $ (106,434) |
|
| $ 3,598 |
|
| $ (172,022) |
|
| $ (144,676) |
|
|
|
|
|
|
|
|
| ||||
Weightedaverage shares outstanding: |
|
|
|
|
|
|
| ||||
Basic | 17,097,766 |
|
| 16,927,924 |
|
| 17,027,226 |
|
| 16,908,940 |
|
Diluted | 17,097,766 |
|
| 17,014,955 |
|
| 17,027,226 |
|
| 16,908,940 |
|
|
|
|
|
|
|
|
| ||||
(Loss)earnings per share: |
|
|
|
|
|
|
| ||||
Basic | $ (7.20) |
|
| $ 0.26 |
|
| $ (12.96) |
|
| $ (14.22) |
|
Diluted | $ (7.20) |
|
| $ 0.26 |
|
| $ (12.96) |
|
| $ (14.22) |
|
|
|
|
|
|
|
|
| ||||
Adjusted(loss) earnings per share: |
|
|
|
|
|
|
| ||||
Basic | $ (6.23) |
|
| $ 0.21 |
|
| $ (10.10) |
|
| $ (8.56) |
|
Diluted | $ (6.23) |
|
| $ 0.21 |
|
| $ (10.10) |
|
| $ (8.56) |
|
1 Non-cash impairment charges in 2021related to fixed assets. Non-cash impairment charges in 2020 includedimpairment of assets held for sale and other impairment charges, netof portion attributable to our noncontrolling interests.
2 During 2021, we recorded subsequent adjustments to thenet gain on sale of business, which related to the 2020 divestiture ofour European rubber fluid transfer and specialty sealing businesses.
3 Lease termination costs no longer recordedas restructuring charges in accordance with ASC 842.
4 Project costs recorded in selling, administration andengineering expense related to divestitures in 2020.
5 Relates to the initial recognition of our valuationallowance on net deferred tax assets in the U.S.
6 Represents the elimination of the income tax impact ofthe above adjustments by calculating the income tax impact of theseadjusting items using the appropriate tax rate for the jurisdictionwhere the charges were incurred.
Free Cash Flow
(Unaudited)
(Dollar amounts in thousands)
The following table defines free cashflow:
| ThreeMonths Ended September 30, |
| Nine MonthsEnded September 30, | ||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Net cash (used in) provided by operating activities | $ (50,754) |
|
| $ 99,702 |
|
| $ (111,488) |
|
| $ (26,532) |
|
Capital expenditures | (20,366) |
|
| (10,533) |
|
| (75,965) |
|
| (73,407) |
|
Free cash flow | $ (71,120) |
|
| $ 89,169 |
|
| $ (187,453) |
|
| $ (99,939) |
|
ContactDetails
Contact for Analysts
RogerHendriksen
+1 248-596-6465
roger.hendriksen@cooperstandard.com
Contactfor Media
Chris Andrews
+1 248-596-6217
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