Cooper Standard(CPS)2025-02-14 21:10Sales and Market Position - In 2024, approximately 86% of Cooper Standard's sales were to OEMs, with major customers including Ford, GM, and Volkswagen[20]. - Automotive sales to the three largest customers (Ford, GM, and Stellantis) represented approximately 56% of total sales for the year ended December 31, 2024[97]. - Sales in North America accounted for about 59% of total sales in 2024[165]. - Approximately 78% of sales in 2024 were attributable to products manufactured outside the United States, exposing the company to various international operational risks[101]. - Total sales for the year ended December 31, 2024 decreased by 3.0% to 2,815,879 in 2023, driven by unfavorable volume and mix, divestitures, and negative foreign exchange impact[196][198]. Company Structure and Operations - The company operates 124 facilities in 20 countries, employing around 22,000 people, making it a leading global producer in its sector[19]. - Cooper Standard's new management structure, effective January 1, 2024, established two reportable segments: Sealing Systems and Fluid Handling Systems, with no impact on consolidated financials[21]. - Cooper Standard operates 124 facilities across 20 countries, with 75 primarily for manufacturing and 49 for design, engineering, and logistics[146]. Financial Performance - Gross profit increased by 4.2% to 78,746 in 2024, a significant improvement from a net loss of 23.3 million on losses before taxes of 8.9 million on losses before taxes of 150 million, with approximately 50 million over the past five years through its Cooper Standard Operating System (CSOS) initiatives[27]. - Continuous improvement programs and cost savings initiatives may not achieve anticipated savings, potentially affecting operating results and financial condition[99]. - Restructuring savings contributed to operational cost decreases of 10.6 million in Fluid Handling Systems[216][217]. Innovation and Technology - The company has developed several innovative technologies, including the Fortrex™ chemistry platform and FlexiCore™, aimed at reducing weight and enhancing performance[31][32]. - The company is strategically integrating AI solutions to enhance product development and operational efficiency, including tools for virtual validation and automated process control[33][34]. - Cooper Standard's innovations have received multiple industry awards, including the Environment + Energy Leader Award in 2022 for the Fortrex™ platform[36][37]. Sustainability and Governance - Cooper Standard's sustainability initiatives are overseen by a Global Sustainability Council, aligning environmental, social, and governance goals with business objectives[28]. - The company achieved Ecovadis Silver Status for sustainability efforts and was recognized as one of America's Most Responsible Companies for six consecutive years[67]. - The company aims to reduce environmental impact through sustainable sourcing and innovative materials[56]. Workforce and Employment - Approximately 22,000 employees were reported as of December 31, 2024, with a voluntary turnover rate of about 13%[62]. - Women comprised approximately 40% of the workforce and held about 21% of leadership positions in 2024[64]. - The ability to attract and retain a skilled workforce is critical for driving innovation and achieving strategic goals[90]. Risks and Challenges - The company faces significant risks from supply chain disruptions, which could adversely impact operations and financial performance[78]. - Inflationary pressures may increase overall cost structures, affecting profit margins and cash flows if pricing adjustments with customers are unsuccessful[75][76]. - There is a risk of material losses from product liability and warranty claims, which could harm reputation and financial condition[87][89]. - Public health events, such as pandemics, could materially impact financial condition and operational results due to shutdowns and increased costs[91][92]. - The company faces competition from numerous competitors, including those in lower-cost regions, which could exert downward pressure on pricing and margins[98]. Debt and Financial Obligations - As of December 31, 2024, total indebtedness was 1,420,034 in 2024 from 1,264,953 from 204,210 in 2024, a rise from 15,183 increase[216]. - Sealing Systems segment adjusted EBITDA for 2024 was 114,245 in 2023, reflecting a change of 77,686, up from 2,904[217].