Cooper Standard(US:CPS)2026-02-13 21:20Sales and Customers - In 2025, approximately 86% of Cooper Standard's sales were to OEMs, with major customers including Ford, GM, and Volkswagen[21]. - Sales to the three largest customers, Ford, GM, and Stellantis, represented approximately 56% of total sales for the year ended December 31, 2025[102]. - In 2025, approximately 86% of Cooper Standard's sales were original equipment sold directly to OEMs, while 14% were to Tier I and Tier II suppliers and non-automotive manufacturers[166]. - In 2025, about 59% of sales were generated in North America, highlighting the company's significant international operations[170]. - Approximately 78% of the company's sales in 2025 were attributable to products manufactured outside the United States, indicating significant international operations[97]. Financial Performance - Sales for the year ended December 31, 2025, increased by 0.4% to $2,740.9 million compared to $2,730.9 million in 2024, driven by favorable foreign exchange[202][204]. - Gross profit for 2025 was $327.5 million, an increase of 8.1% from $302.9 million in 2024, with a gross profit margin of 11.9% compared to 11.1% in 2024[202][208]. - Operating income for 2025 was $86.6 million, up from $69.8 million in 2024, reflecting a year-over-year increase of $16.8 million[202]. - The net loss attributable to Cooper-Standard Holdings Inc. for 2025 was $4.2 million, a significant improvement from a net loss of $78.7 million in 2024[202]. - Restructuring charges decreased by $3.6 million in 2025 compared to 2024, reflecting the impact of a cost optimization restructuring plan implemented in 2024[212]. Operations and Facilities - The company operates 108 facilities across 20 countries, employing around 22,000 people, including 4,000 contingent workers[20]. - Cooper Standard operates 108 facilities across 20 countries, with 65 predominantly manufacturing facilities and 43 designated for design, engineering, administrative, or logistics purposes[152]. - The company has joint ventures in multiple countries, including a 51% ownership in Cooper Standard Sealing (Guangzhou) Co. Ltd. in China, focusing on sealing and fluid transfer systems[50]. - The company utilizes joint ventures to enter new geographic markets, reducing capital investment and leveraging local knowledge[48]. Innovation and Product Development - Cooper Standard aims to achieve and sustain double-digit EBITDA margins and strong free cash flow generation as part of its financial strategy[26]. - The company has successfully utilized its Cooper Standard Operating System (CSOS) to achieve average annual savings of approximately $40 million over the past five years[27]. - The company has developed several innovative products, including the FlexiCore thermoplastic body seal and eCoFlow switch pump, which enhance performance and sustainability[32]. - Cooper Standard's innovations have received multiple industry awards, including the SAA Innovations in Lightweighting Award for FlexiCore in 2024[35]. - The company is focused on expanding its Industrial and Specialty Group (ISG) business to leverage its core product expertise in diverse markets[30]. - The company finalized the divestiture of its European technical rubber products business in 2023, indicating a strategic shift in its operations[25]. Sustainability and Corporate Responsibility - The company aims to achieve carbon neutrality in Europe by 2040 and globally by 2050, reflecting its commitment to sustainability[68]. - The company has been recognized on Newsweek's list of America's Most Responsible Companies for seven consecutive years, highlighting its commitment to corporate responsibility[67]. - The principal raw materials include rubber, carbon black, process oils, and plastic resins, with procurement strategies in place to manage costs and supply continuity[57]. Workforce and Diversity - Approximately 40% of the company's workforce were women in 2025, with women holding about 23% of leadership positions[63]. - The company has a workforce of approximately 22,000 employees, including 4,000 contingent workers, and maintains good relations with its employees[61]. Risks and Challenges - The company may experience difficulties managing product quality, timeliness, and associated costs related to new program launches[89]. - Significant disruptions in the automotive industry due to parts shortages and global supply chain constraints could adversely affect the company's operations and financial performance[83]. - The company faces aggressive pricing pressures from customers, which could negatively impact sales and profit margins[101]. - The company is highly dependent on the automotive industry, and a prolonged contraction in automotive sales could adversely affect its business[96]. - The company has significant exposure to risks associated with public health events, which could materially impact financial condition and operations[94]. - Work stoppages or labor disputes could negatively affect the company's operations and financial performance[84]. - The company relies on information technology systems, and disruptions could adversely affect its business and financial performance[86]. - The company may incur material losses and costs due to product liability and warranty claims, which could harm its reputation and customer trust[91]. - The company had total indebtedness of $1,104.6 million as of December 31, 2025, which could adversely affect its financial condition and ability to obtain future financing[115]. - The ability to borrow against the senior asset-based revolving credit facility is limited to the borrowing base, which could be affected by production shutdowns[111]. - The company may incur significant costs related to manufacturing facility closings or consolidations, negatively impacting cash flows and financial condition[105]. - The company may incur substantial additional indebtedness in the future, increasing risks associated with servicing existing debt[117]. - Variable rate indebtedness exposes the company to interest rate risk, potentially increasing debt service obligations if interest rates rise[118]. - Significant operating and financial restrictions imposed by debt instruments may limit the company's ability to raise additional financing or engage in strategic opportunities[121]. - The company faces potential adverse effects from changes in benchmark interest rates, which could impact future debt servicing[120]. - Working capital requirements may negatively affect liquidity, especially if cash provided by operating activities is insufficient[127]. - Foreign currency exchange rate fluctuations could materially impact operating results, particularly during periods of a strengthening U.S. Dollar[128]. - Impairment charges related to goodwill and long-lived assets could adversely affect financial results if indicators of impairment are identified[130]. - Underfunded pension plans may require cash contributions, reducing available cash for business operations; as of December 31, 2025, the U.S. SERP was underfunded by $9.8 million[131]. - Legal and regulatory proceedings may have an adverse impact on financial condition and results of operations, with potential for significant claims[137]. Market Trends and Economic Outlook - The global light vehicle production returned to moderate growth in 2025, driven primarily by strong production volume in China, despite declines in North America and Europe[172]. - In 2026, industry forecasts anticipate a 0.4% decline in global vehicle production compared to 2025, reflecting ongoing economic uncertainties[172]. - In North America, consumer confidence remains subdued, with certain indices near their lowest levels in over a decade, impacting overall economic activity[173]. - Economists at the IMF project that the U.S. economy will grow by 2.4% in 2026, while Canada and Mexico are expected to grow by 1.6% and 1.5%, respectively[173]. - The Eurozone economy is projected to grow by 1.3% in 2026, driven by rising real wages and increased household consumption[174]. - Brazil's economic growth rate is expected to slow to 1.6% in 2026, following two years of growth averaging 3.0%[176]. - The automotive supplier industry is experiencing increased competition, leading to a preference for stronger relationships with fewer suppliers[179]. - Suppliers are under pressure for price reductions, which is reducing overall profitability in the supply industry[181]. - Advancements in electric vehicle technologies and regulatory pressures are reshaping industry expectations, with continued growth in EV sales projected[182].