NOVI, Mich., Aug. 1, 2019
/PRNewswire/ -- Cooper-Standard Holdings Inc. (NYSE: CPS)
today reported results for the second quarter 2019.
Second Quarter 2019 Summary
- Sales totaled $764.8
million
- Net income of $145.3 million
or $8.36 per diluted share
- Adjusted EBITDA of $58.1
million or 7.6 percent of sales
- Adjusted net income of $5.4
million or $0.31 per diluted
share
- Contract awards related to innovation products for
annualized sales of $171
million
- Significant new Fortrex™ technology agreement
signed subsequent to quarter end
"Our results for the quarter were once again negatively impacted
by continuing weak production volume and mix in China and Europe, as well as the slower than expected
ramp up of an important new vehicle platform in North America," said Jeffrey Edwards, chairman and CEO, Cooper
Standard. "Looking ahead, we expect these challenging market
dynamics to continue at least through the end of the year, and we
have revised our full-year outlook accordingly.
"We are working to mitigate these headwinds as much as possible
by accelerating planned restructuring and further streamlining the
business under our global management structure," Edwards
added. "We expect these actions will help us to improve our
overall efficiency in the near-term and better position the Company
for long-term profitable growth. We remain on track with our
new program launches, cost reduction initiatives and the strategic
diversification of our business."
Consolidated Results
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(dollar amounts in
millions except per share amounts)
|
Sales
|
$
|
764.8
|
|
|
$
|
928.3
|
|
|
$
|
1,644.8
|
|
|
$
|
1,895.7
|
|
Net income
|
$
|
145.3
|
|
|
$
|
41.9
|
|
|
$
|
141.8
|
|
|
$
|
98.7
|
|
Adjusted net
income
|
$
|
5.4
|
|
|
$
|
50.3
|
|
|
$
|
17.2
|
|
|
$
|
114.1
|
|
Earnings per diluted
share
|
$
|
8.36
|
|
|
$
|
2.28
|
|
|
$
|
8.11
|
|
|
$
|
5.36
|
|
Adjusted earnings per
diluted share
|
$
|
0.31
|
|
|
$
|
2.74
|
|
|
$
|
0.99
|
|
|
$
|
6.19
|
|
Adjusted
EBITDA
|
$
|
58.1
|
|
|
$
|
107.9
|
|
|
$
|
124.5
|
|
|
$
|
230.5
|
|
The year-over-year change in second quarter sales was primarily
attributable to the sale of the Company's Anti-Vibration Systems
(AVS) business, unfavorable volume and mix, and foreign
exchange.
Net income for the second quarter 2019 included a $189.9 million gain on the sale of the AVS
business, certain project costs related to acquisitions and
divestitures, and restructuring charges related to headcount
reduction actions. Adjusted net income, which excludes these
items and their related tax impact, declined in the second quarter
2019 compared to the prior year due largely to unfavorable volume
and mix, general inflation, customer price adjustments and higher
material costs, partially offset by operating efficiencies and
other cost saving initiatives.
Adjusted net income, adjusted EBITDA and adjusted earnings 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.
Notable Developments
The Company continues at a record pace for new program launches
and contract awards related to recent product innovations.
During the second quarter, the Company successfully launched 84 new
customer programs, an increase of 75 percent compared to the second
quarter of 2018. Also during the quarter, the Company received new
contract awards related to product innovations, including both new
and replacement business, totaling $171
million in annualized sales. These awards included the
first production order for FlushSeal™ glass sealing technology on
an all-new electric vehicle platform. In the first six months of
the year, contract awards related to product innovations totaled
$252 million in annualized
sales. Net new business awards received during the second
quarter and in the first six months of the year totaled
$53 million and $129 million in annualized sales, respectively.
Cooper Standard's expanding portfolio of commercialized innovation
products includes: MagAlloy™; ArmorHose™; ArmorHose™ TPV;
LightHose; Gen III Posi-Lock; TP Microdense; Microdense EPDM;
FlushSeal™ glass sealing technology; and
Fortrex™.
Subsequent to the end of the second quarter, Cooper Standard
signed a new Fortrex™ technology agreement with a multinational
industrial products manufacturer based in Asia. Under the
agreement, the customer is expected to initially focus on
developing three to four new product applications using Fortrex™
technology. The new agreement, which is the third the Company has
signed this year, is further demonstration of the versatility of
the Fortrex™ chemistry platform and the diverse market
applications that it can address.
Segment Results of Operations
Sales
|
Three Months Ended
June 30,
|
|
|
Variance Due
To:
|
|
2019
|
|
2018
|
|
Change
|
|
|
Volume /
Mix*
|
|
Foreign
Exchange
|
|
Acquisitions/
Divestiture,
net
|
|
(dollar amounts in
thousands)
|
Sales to external
customers
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
404,863
|
|
|
$
|
477,608
|
|
|
$
|
(72,745)
|
|
|
|
$
|
(39,189)
|
|
|
$
|
(1,629)
|
|
|
$
|
(31,927)
|
|
Europe
|
216,217
|
|
|
279,124
|
|
|
(62,907)
|
|
|
|
(28,740)
|
|
|
(13,686)
|
|
|
(20,481)
|
|
Asia
Pacific
|
118,603
|
|
|
147,994
|
|
|
(29,391)
|
|
|
|
(36,146)
|
|
|
(8,061)
|
|
|
14,816
|
|
South
America
|
25,123
|
|
|
23,536
|
|
|
1,587
|
|
|
|
3,817
|
|
|
(2,230)
|
|
|
—
|
|
Consolidated
|
$
|
764,806
|
|
|
$
|
928,262
|
|
|
$
|
(163,456)
|
|
|
|
$
|
(100,258)
|
|
|
$
|
(25,606)
|
|
|
$
|
(37,592)
|
|
|
* Net
of customer price reductions
|
- The impact of foreign currency exchange primarily relates to
the Euro, Chinese Renminbi, Brazilian Real and the Canadian
Dollar.
Adjusted EBITDA
|
Three Months Ended
June 30,
|
|
|
Variance Due
To:
|
|
2019
|
|
2018
|
|
Change
|
|
|
Volume
/
Mix*
|
|
Foreign
Exchange
|
|
Cost (Increases) /
Decreases
|
|
Acquisitions/
Divestiture,
net
|
|
(dollar amounts in
thousands)
|
Segment adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
54,867
|
|
|
$
|
82,672
|
|
|
$
|
(27,805)
|
|
|
|
$
|
(25,927)
|
|
|
$
|
(583)
|
|
|
$
|
2,286
|
|
|
$
|
(3,581)
|
|
Europe
|
6,082
|
|
|
16,292
|
|
|
(10,210)
|
|
|
|
(11,611)
|
|
|
(1,185)
|
|
|
2,498
|
|
|
88
|
|
Asia
Pacific
|
(1,586)
|
|
|
11,304
|
|
|
(12,890)
|
|
|
|
(17,096)
|
|
|
(1,452)
|
|
|
5,821
|
|
|
(163)
|
|
South
America
|
(1,284)
|
|
|
(2,361)
|
|
|
1,077
|
|
|
|
1,298
|
|
|
206
|
|
|
(427)
|
|
|
—
|
|
Consolidated adjusted
EBITDA
|
$
|
58,079
|
|
|
$
|
107,907
|
|
|
$
|
(49,828)
|
|
|
|
$
|
(53,336)
|
|
|
$
|
(3,014)
|
|
|
$
|
10,178
|
|
|
$
|
(3,656)
|
|
|
* Net
of customer price reductions
|
- The impact of foreign currency exchange is primarily driven by
the Chinese Renminbi, Euro, Canadian Dollar, Mexican Peso, Polish
Zloty and Czech Koruna.
- The Cost (Increases) / Decreases category above includes:
-
- The increase in commodity cost pressure, general inflation and
tariffs;
- Launch related activity for engineering, prototypes and
tooling; and
- Net operational efficiencies of $26.5
million primarily driven by our North America, Europe and Asia
Pacific segments.
Liquidity and Cash Flow
At June 30, 2019, Cooper Standard
had cash and cash equivalents totaling $310.8 million. Net cash used in operating
activities in the second quarter 2019 was $7.1 million and free cash flow for the quarter
(defined as net cash used in/provided by operating activities minus
capital expenditures) was an outflow of $43.0 million.
In addition to cash and cash equivalents, the Company had
$158.8 million available under its
amended senior asset-based revolving credit facility ("ABL"),
inclusive of outstanding letters of credit, for total liquidity of
$469.6 million at June 30, 2019.
Total debt at June 30, 2019 was
$792.2 million. Net debt (defined as
total debt minus cash and cash equivalents) was $481.4 million. Cooper Standard's net
leverage ratio (defined as net debt divided by trailing 12 months
adjusted EBITDA) at June 30, 2019 was
1.8 times.
On April 1, 2019, the Company
completed the sale of its AVS business. The total sale price
of the transaction was $265.5 million and the Company received
$243.4 million in cash proceeds after
adjusting for certain liabilities assumed by the purchaser. The
estimated net cash proceeds after taxes and transaction-related
expenses and fees are expected to be approximately $215 to
$220 million.
In June 2018, the Company's board
of directors approved a common stock repurchase program authorizing
the Company to repurchase, in aggregate, up to $150.0 million of its outstanding common stock.
In May 2019, the Company entered into
an accelerated share repurchase ("ASR") agreement in the amount of
$30.0 million. The ASR is expected to
be completed no later than the third quarter of 2019. As of
June 30, 2019, approximately
$98.7 million remained available
under the 2018 board of directors repurchase authorization.
Outlook
Based on the results achieved in the first two quarters and the
industry and economic outlook for the rest of the year, the Company
has revised its guidance for the full year 2019 as summarized
below:
|
Previous
Guidance (5/1/2019)
|
Current
Guidance1
|
Sales
|
$3.2 - $3.4
billion
|
$3.0 - $3.2
billion
|
Adjusted
EBITDA2
|
$300 - $340
million
|
$270 - $300
million
|
Capital
Expenditures
|
$180 - $190
million
|
$175 - $185
million
|
Cash
Restructuring
|
$15 - $25
million
|
$25 - $35
million
|
Effective Tax
Rate
|
16% - 18%
|
21% - 25%
|
|
|
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 is reflective of June 2019 IHS production forecasts
for relevant light vehicle platforms and models, customer
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
because full-year net income 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 without unreasonable effort.
|
Conference Call Details
Cooper Standard management will host a conference call and
webcast on August 2, 2019 at 9 a.m.
ET to discuss its second quarter 2019 results, provide a
general business update and respond to investor questions. A
link to the live webcast of the call (listen only) and presentation
materials will be available on Cooper Standard'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. Provide the conference ID 8455478 or ask to be
connected to the Cooper Standard conference call. Representatives
of the investment community will have the opportunity to ask
questions after the presentation. Callers should dial in at least
five minutes prior to the start of the call.
Individuals unable 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 Novi, Mich., is a leading global supplier of
systems and components for the automotive industry. Products
include sealing, fuel and brake delivery, and fluid transfer
systems. Cooper Standard employs approximately 30,000 people
globally and operates in 21 countries around the world. For more
information, please visit www.cooperstandard.com.
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: 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 us
entering new markets; 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; 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 proceedings, claims or investigations
against us; work stoppages or other labor disruptions; the ability
of our intellectual property to withstand legal challenges;
cyber-attacks, other disruptions in or the inability to implement
upgrades to, our information technology systems; the possible
volatility of our annual effective tax rate; changes in our
assumptions as a result of IRS issuing guidance on the Tax Cuts and
Jobs Act; the possibility of future impairment charges to our
goodwill and long-lived assets; 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.
CPS_F
Contact for
Analysts:
|
Contact for
Media:
|
Roger
Hendriksen
|
Sharon
Wenzl
|
Cooper
Standard
|
Cooper
Standard
|
(248)
596-6465
|
(248)
596-6211
|
roger.hendriksen@cooperstandard.com
|
sswenzl@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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales
|
$
|
764,806
|
|
|
$
|
928,262
|
|
|
$
|
1,644,844
|
|
|
$
|
1,895,653
|
|
Cost of products
sold
|
666,828
|
|
|
776,897
|
|
|
1,429,318
|
|
|
1,573,408
|
|
Gross
profit
|
97,978
|
|
|
151,365
|
|
|
215,526
|
|
|
322,245
|
|
Selling,
administration & engineering expenses
|
74,170
|
|
|
76,339
|
|
|
161,144
|
|
|
156,779
|
|
Gain on sale of
business
|
(189,910)
|
|
|
—
|
|
|
(189,910)
|
|
|
—
|
|
Amortization of
intangibles
|
5,148
|
|
|
3,399
|
|
|
8,923
|
|
|
6,805
|
|
Restructuring
charges
|
5,927
|
|
|
10,013
|
|
|
23,642
|
|
|
17,138
|
|
Impairment
charges
|
2,188
|
|
|
—
|
|
|
2,188
|
|
|
—
|
|
Operating
profit
|
200,455
|
|
|
61,614
|
|
|
209,539
|
|
|
141,523
|
|
Interest expense, net
of interest income
|
(11,575)
|
|
|
(9,973)
|
|
|
(23,507)
|
|
|
(19,773)
|
|
Equity in earnings of
affiliates
|
1,891
|
|
|
1,248
|
|
|
4,249
|
|
|
2,935
|
|
Loss on refinancing
and extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(770)
|
|
Other expense,
net
|
(1,781)
|
|
|
(557)
|
|
|
(2,577)
|
|
|
(2,276)
|
|
Income before income
taxes
|
188,990
|
|
|
52,332
|
|
|
187,704
|
|
|
121,639
|
|
Income tax
expense
|
44,239
|
|
|
9,130
|
|
|
46,570
|
|
|
21,021
|
|
Net income
|
144,751
|
|
|
43,202
|
|
|
141,134
|
|
|
100,618
|
|
Net loss (income)
attributable to noncontrolling interests
|
545
|
|
|
(1,325)
|
|
|
702
|
|
|
(1,949)
|
|
Net income
attributable to Cooper-Standard Holdings Inc.
|
$
|
145,296
|
|
|
$
|
41,877
|
|
|
$
|
141,836
|
|
|
$
|
98,669
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
17,312,359
|
|
|
18,000,579
|
|
|
17,423,162
|
|
|
17,996,058
|
|
Diluted
|
17,376,458
|
|
|
18,371,775
|
|
|
17,490,968
|
|
|
18,419,952
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
8.39
|
|
|
$
|
2.33
|
|
|
$
|
8.14
|
|
|
$
|
5.48
|
|
Diluted
|
$
|
8.36
|
|
|
$
|
2.28
|
|
|
$
|
8.11
|
|
|
$
|
5.36
|
|
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollar amounts in
thousands)
|
|
|
June 30,
2019
|
|
December 31,
2018
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
310,779
|
|
|
$
|
264,980
|
|
Accounts receivable,
net
|
458,504
|
|
|
418,607
|
|
Tooling
receivable
|
177,191
|
|
|
141,106
|
|
Inventories
|
184,435
|
|
|
175,572
|
|
Prepaid
expenses
|
32,154
|
|
|
36,878
|
|
Other current
assets
|
80,072
|
|
|
108,683
|
|
Assets held for
sale
|
—
|
|
|
103,898
|
|
Total current
assets
|
1,243,135
|
|
|
1,249,724
|
|
Property, plant and
equipment, net
|
993,933
|
|
|
984,241
|
|
Operating lease
right-of-use assets, net
|
94,646
|
|
|
—
|
|
Goodwill
|
142,151
|
|
|
143,681
|
|
Intangible assets,
net
|
90,627
|
|
|
99,602
|
|
Other
assets
|
140,342
|
|
|
145,855
|
|
Total
assets
|
$
|
2,704,834
|
|
|
$
|
2,623,103
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Debt payable within
one year
|
$
|
54,447
|
|
|
$
|
101,323
|
|
Accounts
payable
|
415,301
|
|
|
452,320
|
|
Payroll
liabilities
|
120,396
|
|
|
92,604
|
|
Accrued
liabilities
|
92,843
|
|
|
98,907
|
|
Current operating
lease liabilities
|
25,730
|
|
|
—
|
|
Liabilities held for
sale
|
—
|
|
|
71,195
|
|
Total current
liabilities
|
708,717
|
|
|
816,349
|
|
Long-term
debt
|
737,757
|
|
|
729,805
|
|
Pension
benefits
|
134,644
|
|
|
138,771
|
|
Postretirement
benefits other than pensions
|
47,868
|
|
|
40,901
|
|
Long-term operating
lease liabilities
|
70,102
|
|
|
—
|
|
Other
liabilities
|
46,594
|
|
|
37,775
|
|
Total
liabilities
|
1,745,682
|
|
|
1,763,601
|
|
7% Cumulative
participating convertible preferred stock
|
—
|
|
|
—
|
|
Equity:
|
|
|
|
Common
stock
|
17
|
|
|
17
|
|
Additional paid-in
capital
|
483,792
|
|
|
501,511
|
|
Retained
earnings
|
701,647
|
|
|
576,025
|
|
Accumulated other
comprehensive loss
|
(249,211)
|
|
|
(246,088)
|
|
Total Cooper-Standard
Holdings Inc. equity
|
936,245
|
|
|
831,465
|
|
Noncontrolling
interests
|
22,907
|
|
|
28,037
|
|
Total
equity
|
959,152
|
|
|
859,502
|
|
Total liabilities and
equity
|
$
|
2,704,834
|
|
|
$
|
2,623,103
|
|
COOPER-STANDARD
HOLDINGS INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(Dollar amounts in
thousands)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
Operating
Activities:
|
|
|
|
Net income
|
$
|
141,134
|
|
|
$
|
100,618
|
|
Adjustments to
reconcile net income to net cash (used in) provided by operating
activities:
|
|
|
|
Depreciation
|
65,550
|
|
|
66,367
|
|
Amortization of
intangibles
|
8,923
|
|
|
6,805
|
|
Gain on sale of
business
|
(189,910)
|
|
|
—
|
|
Impairment
charges
|
2,188
|
|
|
—
|
|
Share-based
compensation expense
|
6,482
|
|
|
10,342
|
|
Equity in earnings of
affiliates, net of dividends related to earnings
|
668
|
|
|
1,573
|
|
Loss on refinancing
and extinguishment of debt
|
—
|
|
|
770
|
|
Deferred income
taxes
|
19,117
|
|
|
1,420
|
|
Other
|
2,030
|
|
|
1,029
|
|
Changes in operating
assets and liabilities
|
(65,148)
|
|
|
(90,613)
|
|
Net cash (used in)
provided by operating activities
|
(8,966)
|
|
|
98,311
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
(95,496)
|
|
|
(106,699)
|
|
Acquisition of
businesses, net of cash acquired
|
(452)
|
|
|
(6,195)
|
|
Proceeds from sale of
business
|
243,362
|
|
|
—
|
|
Proceeds from sale of
fixed assets and other
|
2,099
|
|
|
(139)
|
|
Net cash provided by
(used in) investing activities
|
149,513
|
|
|
(113,033)
|
|
Financing
activities:
|
|
|
|
Principal payments on
long-term debt
|
(2,067)
|
|
|
(2,062)
|
|
(Decrease) increase
in short-term debt, net
|
(47,351)
|
|
|
224
|
|
Purchase of
noncontrolling interests
|
(4,797)
|
|
|
(2,450)
|
|
Repurchase of common
stock
|
(36,550)
|
|
|
(43,525)
|
|
Taxes withheld and
paid on employees' share-based payment awards
|
(2,733)
|
|
|
(11,279)
|
|
Contribution from
noncontrolling interest and other
|
2,277
|
|
|
(327)
|
|
Net cash used in
financing activities
|
(91,221)
|
|
|
(59,419)
|
|
Effects of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(2,882)
|
|
|
(865)
|
|
Changes in cash, cash
equivalents and restricted cash
|
46,444
|
|
|
(75,006)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
267,399
|
|
|
518,461
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
313,843
|
|
|
$
|
443,455
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash to the condensed
consolidated balance sheet:
|
|
|
|
Balance as
of
|
|
June 30,
2019
|
|
December 31,
2018
|
Cash and cash
equivalents
|
$
|
310,779
|
|
|
$
|
264,980
|
|
Restricted cash
included in other current assets
|
55
|
|
|
18
|
|
Restricted cash
included in other assets
|
3,009
|
|
|
2,401
|
|
Total cash, cash
equivalents and restricted cash shown in the statement of cash
flows
|
$
|
313,843
|
|
|
$
|
267,399
|
|
Non-GAAP Measures
EBITDA, adjusted EBITDA, adjusted net income, adjusted earnings
per share, net debt 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. Management
considers EBITDA, adjusted EBITDA, adjusted net income, adjusted
earnings per share, net debt and free cash flow 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 adjusted to reflect income tax expense,
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 is defined as net income adjusted to reflect
certain items that management does not consider to be reflective of
the Company's core operating performance. Adjusted basic and
diluted earnings per share is defined as adjusted net income
divided by the weighted average number of basic and diluted shares,
respectively, outstanding during the period. Net debt is
defined as total debt minus cash and cash equivalents. 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.
When analyzing the Company's operating performance, investors
should use EBITDA, adjusted EBITDA, adjusted net income, adjusted
earnings per share, net debt and free cash flow as supplements to,
and not as alternatives for, net income, 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, adjusted earnings per share, net debt and free
cash flow 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 net income,
adjusted earnings per share, net debt and free cash flow
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,
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 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 net income and
free cash flow follow.
Reconciliation of
Non-GAAP Measures
|
EBITDA
and Adjusted EBITDA (Unaudited)
(Dollar amounts in thousands)
|
|
The following table
provides a reconciliation of EBITDA and adjusted EBITDA from net
income:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
attributable to Cooper-Standard Holdings Inc.
|
$
|
145,296
|
|
|
$
|
41,877
|
|
|
$
|
141,836
|
|
|
$
|
98,669
|
|
Income tax
expense
|
44,239
|
|
|
9,130
|
|
|
46,570
|
|
|
21,021
|
|
Interest expense, net
of interest income
|
11,575
|
|
|
9,973
|
|
|
23,507
|
|
|
19,773
|
|
Depreciation and
amortization
|
37,868
|
|
|
36,914
|
|
|
74,473
|
|
|
73,173
|
|
EBITDA
|
$
|
238,978
|
|
|
$
|
97,894
|
|
|
$
|
286,386
|
|
|
$
|
212,636
|
|
Gain on sale of
business (1)
|
(189,910)
|
|
|
—
|
|
|
(189,910)
|
|
|
—
|
|
Restructuring
charges
|
5,927
|
|
|
10,013
|
|
|
23,642
|
|
|
17,138
|
|
Impairment charges
(2)
|
2,188
|
|
|
—
|
|
|
2,188
|
|
|
—
|
|
Project costs
(3)
|
405
|
|
|
—
|
|
|
1,668
|
|
|
—
|
|
Lease termination
costs (4)
|
491
|
|
|
—
|
|
|
491
|
|
|
—
|
|
Loss on refinancing
and extinguishment of debt (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
770
|
|
Adjusted
EBITDA
|
$
|
58,079
|
|
|
$
|
107,907
|
|
|
$
|
124,465
|
|
|
$
|
230,544
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
764,806
|
|
|
$
|
928,262
|
|
|
$
|
1,644,844
|
|
|
$
|
1,895,653
|
|
Net income
margin
|
19.0
|
%
|
|
4.5
|
%
|
|
8.6
|
%
|
|
5.2
|
%
|
Adjusted EBITDA
margin
|
7.6
|
%
|
|
11.6
|
%
|
|
7.6
|
%
|
|
12.2
|
%
|
|
|
(1)
|
Gain on sale of AVS
product line.
|
(2)
|
Non-cash impairment
charges related to fixed assets.
|
(3)
|
Project costs
recorded in selling, administration and engineering expense related
to acquisitions and divestiture.
|
(4)
|
Lease termination
costs no longer recorded as restructuring charges in accordance
with ASC 842.
|
(5)
|
Loss on refinancing
and extinguishment of debt related to the applicable amendment of
the Term Loan Facility entered into during such period.
|
Adjusted Net
Income and Adjusted Earnings Per Share (Unaudited)
(Dollar amounts in thousands except per share and share
amounts)
|
|
The following table
provides a reconciliation of net income to adjusted net income and
the respective earnings per share amounts:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
attributable to Cooper-Standard Holdings Inc.
|
$
|
145,296
|
|
|
$
|
41,877
|
|
|
$
|
141,836
|
|
|
$
|
98,669
|
|
Gain on sale of
business (1)
|
(189,910)
|
|
|
—
|
|
|
(189,910)
|
|
|
—
|
|
Restructuring
charges
|
5,927
|
|
|
10,013
|
|
|
23,642
|
|
|
17,138
|
|
Impairment charges
(2)
|
2,188
|
|
|
—
|
|
|
2,188
|
|
|
—
|
|
Project costs
(3)
|
405
|
|
|
—
|
|
|
1,668
|
|
|
—
|
|
Lease termination
costs (4)
|
491
|
|
|
—
|
|
|
491
|
|
|
—
|
|
Loss on refinancing
and extinguishment of debt (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
770
|
|
Tax impact of
adjusting items (6)
|
41,006
|
|
|
(1,595)
|
|
|
37,325
|
|
|
(2,496)
|
|
Adjusted net
income
|
$
|
5,403
|
|
|
$
|
50,295
|
|
|
$
|
17,240
|
|
|
$
|
114,081
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
17,312,359
|
|
|
18,000,579
|
|
|
17,423,162
|
|
|
17,996,058
|
|
Diluted
|
17,376,458
|
|
|
18,371,775
|
|
|
17,490,968
|
|
|
18,419,952
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
8.39
|
|
|
$
|
2.33
|
|
|
$
|
8.14
|
|
|
$
|
5.48
|
|
Diluted
|
$
|
8.36
|
|
|
$
|
2.28
|
|
|
$
|
8.11
|
|
|
$
|
5.36
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.31
|
|
|
$
|
2.79
|
|
|
$
|
0.99
|
|
|
$
|
6.34
|
|
Diluted
|
$
|
0.31
|
|
|
$
|
2.74
|
|
|
$
|
0.99
|
|
|
$
|
6.19
|
|
|
|
(1)
|
Gain on sale of AVS
product line.
|
(2)
|
Non-cash impairment
charges related to fixed assets.
|
(3)
|
Project costs
recorded in selling, administration and engineering expense related
to acquisitions and divestiture.
|
(4)
|
Lease termination
costs no longer recorded as restructuring charges in accordance
with ASC 842.
|
(5)
|
Loss on refinancing
and extinguishment of debt related to the applicable amendment of
the Term Loan Facility entered into during such period.
|
(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.
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net cash (used in)
provided by operating activities
|
$
|
(7,118)
|
|
|
$
|
108,867
|
|
|
$
|
(8,966)
|
|
|
$
|
98,311
|
|
Capital
expenditures
|
(35,863)
|
|
|
(38,841)
|
|
|
(95,496)
|
|
|
(106,699)
|
|
Free cash
flow
|
$
|
(42,981)
|
|
|
$
|
70,026
|
|
|
$
|
(104,462)
|
|
|
$
|
(8,388)
|
|
View original
content:http://www.prnewswire.com/news-releases/cooper-standard-reports-second-quarter-results-and-announces-significant-new-fortrex-technology-agreement-300895342.html
SOURCE Cooper-Standard Holdings Inc.