Cooper Standard(CPS) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Consolidated Financial Highlights Cooper Standard reported strong second quarter 2025 results, exceeding expectations with significant year-over-year improvements in profitability metrics, including gross profit, operating income, and adjusted EBITDA, while substantially reducing net loss | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------- | :------------------ | :------------------ | :---------------- | :--------- | | Sales | $706.0 | $708.4 | $(2.4) | -0.3% | | Net (loss) income | $(1.4) | $(76.2) | $74.8 | 98.2% | | Adjusted net income (loss) | $1.0 | $(11.3) | $12.3 | 108.8% | | (Loss) income per diluted share | $(0.08) | $(4.34) | $4.26 | 98.2% | | Adjusted income (loss) per diluted share | $0.06 | $(0.64) | $0.70 | 109.4% | | Adjusted EBITDA | $62.8 | $50.9 | $11.9 | 23.4% | - Gross profit increased by 12.2% to $93.1 million compared to Q2 2024[6] - Operating income surged by 234.5% to $37.3 million compared to Q2 2024[6] - Adjusted EBITDA reached $62.8 million, representing 8.9% of sales, an increase of $11.9 million year-over-year[6] Management Commentary Jeffrey Edwards, Chairman and CEO, highlighted the global team's efforts in exceeding first and second-quarter plans and expressed confidence in the second half's execution to offset lower light vehicle production and inflation, leading to raised full-year adjusted EBITDA guidance - Operating performance and financial results in Q1 and Q2 2025 exceeded the company's plan[4] - Full year adjusted EBITDA guidance has been raised due to strong execution and expected offsets to lower light vehicle production and inflationary headwinds[4] Financial Performance Analysis Consolidated Results Consolidated results for Q2 and H1 2025 showed a slight decline in sales but significant improvements in net income (loss) and adjusted profitability, driven by efficiency gains and reduced special items Sales and Net Income (Loss) Sales for Q2 2025 slightly decreased by 0.3% due to unfavorable volume and mix, while net loss significantly improved from $76.2 million in Q2 2024 to $1.4 million in Q2 2025, primarily due to lower restructuring charges | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Sales | $706.0 | $708.4 | $1,373.0 | $1,384.8 | | Net (loss) income | $(1.4) | $(76.2) | $0.2 | $(107.9) | | (Loss) income per diluted share | $(0.08) | $(4.34) | $0.01 | $(6.16) | - Sales declined by 0.3% in Q2 2025, primarily due to unfavorable volume and mix, including net customer price adjustments, partially offset by foreign exchange[4] - Net loss for Q2 2025 was $1.4 million, a significant improvement from $76.2 million in Q2 2024, largely due to reduced restructuring charges ($2.9 million vs. $17.8 million) and other special items[5] Profitability Metrics (Gross Profit, Operating Income, Adjusted EBITDA) Adjusted net income improved significantly to $1.0 million in Q2 2025 from a loss of $11.3 million in Q2 2024, driven by increased manufacturing and purchasing efficiency and savings from headcount initiatives, despite inflationary pressures | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Adjusted net income (loss) | $1.0 | $(11.3) | $4.5 | $(41.9) | | Adjusted income (loss) per diluted share | $0.06 | $(0.64) | $0.25 | $(2.39) | | Adjusted EBITDA | $62.8 | $50.9 | $121.5 | $80.3 | - The year-over-year improvement in adjusted net income and adjusted EBITDA was primarily driven by increased manufacturing and purchasing efficiency and savings realized from past headcount initiatives[5][7] - These positive drivers were partially offset by unfavorable volume, mix and price, and ongoing general inflation[5][7] Segment Results of Operations Both Sealing Systems and Fluid Handling Systems segments experienced slight sales declines in Q2 2025 but demonstrated strong Adjusted EBITDA growth, primarily due to cost reductions and efficiency gains Sales by Segment Sales for Sealing Systems and Fluid Handling Systems segments saw minor declines in Q2 2025, mainly attributable to unfavorable volume/mix, with some offset from foreign exchange | Segment | Q2 2025 Sales (Thousands) | Q2 2024 Sales (Thousands) | Change (Thousands) | Variance Due To: Volume/Mix* (Thousands) | Variance Due To: Foreign Exchange (Thousands) | | :-------------------- | :------------------------ | :------------------------ | :----------------- | :--------------------------------------- | :------------------------------------------ | | Sealing systems | $364,368 | $364,946 | $(578) | $(4,243) | $3,665 | | Fluid handling systems | $322,430 | $322,742 | $(312) | $(887) | $575 | * Net of customer price adjustments, including recoveries Adjusted EBITDA by Segment Adjusted EBITDA for Sealing Systems increased by $5.3 million and for Fluid Handling Systems by $10.7 million in Q2 2025, largely driven by cost decreases and savings from 2024 restructuring initiatives | Segment | Q2 2025 Adjusted EBITDA (Thousands) | Q2 2024 Adjusted EBITDA (Thousands) | Change (Thousands) | Variance Due To: Volume/Mix* (Thousands) | Variance Due To: Foreign Exchange (Thousands) | Variance Due To: Cost Decreases/(Increases)** (Thousands) | | :-------------------- | :---------------------------------- | :---------------------------------- | :----------------- | :--------------------------------------- | :------------------------------------------ | :------------------------------------------------------- | | Sealing systems | $40,345 | $35,035 | $5,310 | $(7,777) | $(61) | $13,148 | | Fluid handling systems | $26,997 | $16,282 | $10,715 | $(7,689) | $7,300 | $11,104 | * Net of customer price adjustments, including recoveries ** Net of savings from 2024 restructuring initiatives Business Developments New Business Awards Cooper Standard secured significant new business awards in Q2 2025, totaling $77.1 million in anticipated future annualized sales, with a year-to-date total of $132.0 million, primarily focused on battery-electric and hybrid vehicle platforms - Net new business awards in Q2 2025 totaled $77.1 million in anticipated future annualized sales[9] - Through the first six months of 2025, the Company received $132.0 million in net new business awards, primarily related to battery-electric and hybrid vehicle platforms[9] Financial Position & Outlook Cash and Liquidity As of June 30, 2025, Cooper Standard maintained a healthy liquidity position with $121.6 million in cash and cash equivalents and $272.8 million in total liquidity, which is considered sufficient to support ongoing operations and strategic initiatives | Metric | As of June 30, 2025 (Millions) | | :-------------------------- | :----------------------------- | | Cash and cash equivalents | $121.6 | | Total liquidity | $272.8 | - The Company believes it has sufficient financial resources, including current cash, flexible credit facilities, and expected future positive cash generation, to support operations and strategic initiatives for the foreseeable future[14] Full Year 2025 Outlook and Guidance Cooper Standard has raised its full-year 2025 adjusted EBITDA guidance to $220-$250 million, while maintaining sales guidance, reflecting confidence in operational excellence despite anticipated lower light vehicle production volumes in North America | Metric | Initial 2025 Guidance | Current 2025 Guidance | | :-------------------- | :-------------------- | :-------------------- | | Sales | $2.7 - $2.8 billion | $2.7 - $2.8 billion | | Adjusted EBITDA | $200 - $235 million | $220 - $250 million | | Capital Expenditures | $45 - $55 million | $45 - $55 million | | Cash Restructuring | $20 - $25 million | $20 - $25 million | | Net Cash Interest | $105 - $115 million | $105 - $115 million | | Net Cash Taxes | $30 - $35 million | $25 - $30 million | | Region | Initial 2025 Light Vehicle Production Assumptions (Units) | Current 2025 Light Vehicle Production Assumptions (Units) | | :-------------- | :------------------------------------------------------ | :------------------------------------------------------ | | North America | 15.1 million | 14.9 million | | Europe | 16.6 million | 16.7 million | | Greater China | 30.2 million | 31.2 million | | South America | 3.1 million | 3.2 million | - The Company believes it is well-positioned to manage through potential tariffs and remains confident that successful execution of its plans will drive increasing profit margins over time as markets stabilize, despite trade-related uncertainty[15] Company Information & Disclosures About Cooper Standard Cooper Standard is a global leader in sealing and fluid handling systems and components, headquartered in Northville, Michigan, with operations in 20 countries and approximately 22,000 team members - Cooper Standard is a leading global supplier of sealing and fluid handling systems and components, operating in 20 countries[20] - The company utilizes materials science and manufacturing expertise to create innovative and sustainable engineered solutions for diverse transportation and industrial markets[20] Forward-Looking Statements This section clarifies that the press release contains forward-looking statements, which are based on current expectations and assumptions but are subject to significant risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based upon current expectations and various assumptions, but are not guarantees of future performance and are subject to significant risks and uncertainties[21] - Key risk factors include volatility of stock price, impacts of global conflicts, ability to offset higher costs, labor disruptions, contractions in automotive sales, pricing pressures, supply chain disruptions, and risks associated with international operations[21] Non-GAAP Financial Measures This section defines non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income (loss), adjusted EPS, free cash flow, and net new business, explaining their use by management and investors for evaluating operating performance, while emphasizing they are not substitutes for GAAP measures - Non-GAAP measures like EBITDA, adjusted EBITDA, adjusted net income (loss), adjusted EPS, free cash flow, and net new business are used by management and investors as key indicators of operating performance[30] - These measures exclude certain non-cash and special items to provide insight into core financial activities but should be used as supplements to, not alternatives for, U.S. GAAP measures[30][31] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations The unaudited condensed consolidated statements of operations present the company's revenues, costs, and profitability for the three and six months ended June 30, 2025 and 2024, showing a significant reduction in net loss year-over-year | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | H1 2025 (Thousands) | H1 2024 (Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | :------------------ | :------------------ | | Sales | $705,973 | $708,362 | $1,373,042 | $1,384,787 | | Gross profit | $93,051 | $82,940 | $170,229 | $144,583 | | Operating income | $37,279 | $11,146 | $59,543 | $14,629 | | Net (loss) income attributable to Cooper-Standard Holdings Inc. | $(1,401) | $(76,243) | $151 | $(107,903) | | Diluted (Loss) income per share | $(0.08) | $(4.34) | $0.01 | $(6.16) | Condensed Consolidated Balance Sheets The unaudited condensed consolidated balance sheets provide a snapshot of Cooper Standard's financial position as of June 30, 2025, compared to December 31, 2024, detailing assets, liabilities, and equity | Metric | June 30, 2025 (Thousands) | December 31, 2024 (Thousands) | | :-------------------------- | :-------------------------- | :---------------------------- | | Total current assets | $885,390 | $805,256 | | Total assets | $1,819,711 | $1,733,065 | | Total current liabilities | $633,894 | $576,783 | | Total liabilities | $1,925,093 | $1,866,435 | | Total equity | $(105,382) | $(133,370) | Condensed Consolidated Statements of Cash Flows The unaudited condensed consolidated statements of cash flows outline the cash generated or used in operating, investing, and financing activities for the six months ended June 30, 2025 and 2024, showing a decrease in cash and cash equivalents | Metric | H1 2025 (Thousands) | H1 2024 (Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | | Net cash used in operating activities | $(30,431) | $(26,212) | | Net cash used in investing activities | $(22,757) | $(27,835) | | Net cash used in financing activities | $(4,357) | $(3,493) | | Changes in cash, cash equivalents and restricted cash | $(51,126) | $(62,120) | | Cash, cash equivalents and restricted cash at end of period | $127,571 | $100,941 | Reconciliation of Non-GAAP Financial Measures EBITDA and Adjusted EBITDA Reconciliation This section provides a reconciliation of net (loss) income to EBITDA and Adjusted EBITDA for Q2 and H1 2025 and 2024, detailing adjustments for restructuring charges, gain on sale of businesses, and pension settlement charges | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | H1 2025 (Thousands) | H1 2024 (Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | :------------------ | :------------------ | | Net (loss) income attributable to Cooper Standard Holdings Inc. | $(1,401) | $(76,243) | $151 | $(107,903) | | EBITDA | $59,913 | $(13,655) | $116,615 | $14,560 | | Adjusted EBITDA | $62,765 | $50,913 | $121,480 | $80,261 | | Adjusted EBITDA margin | 8.9% | 7.2% | 8.8% | 5.8% | Adjusted Net Income (Loss) and Adjusted EPS Reconciliation This reconciliation details the adjustments made to net (loss) income to arrive at adjusted net income (loss) and adjusted earnings (loss) per share for Q2 and H1 2025 and 2024, including the tax impact of these adjustments | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | H1 2025 (Thousands) | H1 2024 (Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | :------------------ | :------------------ | | Net (loss) income attributable to Cooper-Standard Holdings Inc. | $(1,401) | $(76,243) | $151 | $(107,903) | | Adjusted net income (loss) | $1,023 | $(11,277) | $4,477 | $(41,879) | | Diluted (Loss) income per share | $(0.08) | $(4.34) | $0.01 | $(6.16) | | Adjusted income (loss) per share (Diluted) | $0.06 | $(0.64) | $0.25 | $(2.39) | Free Cash Flow Reconciliation This section defines and reconciles free cash flow, showing net cash used in operating activities minus capital expenditures for the three and six months ended June 30, 2025 and 2024 | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | H1 2025 (Thousands) | H1 2024 (Thousands) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Net cash used in operating activities | $(15,580) | $(12,013) | $(30,431) | $(26,212) | | Capital expenditures | $(7,772) | $(11,243) | $(25,315) | $(28,077) | | Free cash flow | $(23,352) | $(23,256) | $(55,746) | $(54,289) |