Cooper Standard(CPS) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section outlines the unaudited financial statements, management's analysis, market risk, and internal controls for Q1 2025 Financial Statements (Unaudited) Q1 2025 net income of $1.6 million reverses a $31.3 million loss in Q1 2024, due to improved gross profit Financial Performance | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales | $667.1M | $676.4M | | Gross Profit | $77.2M | $61.6M | | Operating Income | $22.3M | $3.5M | | Net Income (Loss) | $1.6M | ($31.3M) | | Diluted EPS | $0.09 | ($1.81) | Balance Sheet Overview | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $140.4M | $170.0M | | Total Assets | $1,800.1M | $1,733.1M | | Total Debt | $1,101.0M | $1,100.3M | | Total Liabilities | $1,922.4M | $1,866.4M | | Total Equity | ($122.3M) | ($133.4M) | Cash Flow Summary | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($14.9M) | ($14.2M) | | Net Cash Used in Investing Activities | ($15.2M) | ($16.7M) | | Net Cash Used in Financing Activities | ($2.5M) | ($1.2M) | Notes to Condensed Consolidated Financial Statements Notes detail revenue, restructuring, debt compliance, and significant royalty settlement income Revenue Breakdown (Q1 2025) | Revenue Breakdown (Q1 2025) | Amount (in thousands) | | :--- | :--- | | By Segment | | | Sealing Systems | $344,311 | | Fluid Handling Systems | $303,998 | | By Region | | | North America | $375,098 | | Europe | $148,400 | | Asia Pacific | $96,673 | - A May 2024 restructuring plan eliminated approximately 400 positions and is anticipated to generate annualized savings of $40,000 to $45,000[39][40] - Restructuring charges for Q1 2025 were $2.1 million[42] - Total debt as of March 31, 2025, was approximately $1.1 billion, consisting mainly of First Lien Notes ($611.6 million) and Third Lien Notes ($388.5 million)[46] - The company was in compliance with all debt covenants[57] - Other income for Q1 2025 was $8.9 million, which included $10.0 million related to royalty settlements from intellectual property licensed to a buyer of a previously divested business[76][115] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A highlights challenging economic outlook, improved gross profit, doubled Adjusted EBITDA, and sufficient liquidity - The company expects global light vehicle production in 2025 to be approximately 2% lower than in 2024, citing economic risks, high interest rates, and uncertainty around U.S. trade policy[95][102] - Gross profit margin improved to 11.6% in Q1 2025 from 9.1% in Q1 2024[108] - This improvement was driven by manufacturing and purchasing savings from lean initiatives and restructuring, which more than offset inflationary pressures[112] Segment Adjusted EBITDA | Segment Adjusted EBITDA | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Sealing systems | $32.3M | $21.4M | +$10.9M | | Fluid handling systems | $21.0M | $11.0M | +$10.0M | | Total Consolidated Adjusted EBITDA | $58.7M | $29.3M | +$29.4M | - As of March 31, 2025, the company had $159.7 million available for borrowing under its ABL Facility[55] - The company believes its liquidity is sufficient to meet its requirements for the foreseeable future[128] Quantitative and Qualitative Disclosures About Market Risk No material changes were reported in the company's market risk disclosures since the 2024 Annual Report - There have been no material changes to the company's market risk disclosures since the 2024 Annual Report[145] Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025[146] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to affect, the company's internal control[147] PART II. OTHER INFORMATION This section addresses new risk factors related to trade policies and details share repurchase activities Risk Factors A new risk factor highlights the adverse impact of changes in U.S. or foreign trade policies, including tariffs - A new risk factor was added regarding changes in U.S. or foreign trade policies, including tariffs and trade restrictions[150] - Tariffs imposed by the U.S. and retaliatory tariffs from other countries, like China, could increase product costs, decrease demand, and disrupt the supply chain[152] - The company warns that it may not be able to fully mitigate the adverse effects of prolonged tariffs or trade disputes[152][153] Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased under the public program in Q1 2025; 116,037 shares were repurchased for employee tax withholding - No shares were repurchased under the common stock repurchase program during Q1 2025[154][155] - As of March 31, 2025, approximately $98.7 million of repurchase authorization remained under the program[154] - A total of 116,037 shares were repurchased during the quarter to satisfy employee tax withholding requirements upon the vesting of restricted stock awards, separate from the public repurchase program[155]