Cooper Standard(US:CPS)2021-08-04 16:00Financial Performance - Sales for the three months ended June 30, 2021, increased by 56.6% compared to the same period in 2020, driven by vehicle production volume increases due to the non-recurrence of lengthy shutdowns from COVID-19 [94]. - The gross loss for the three months ended June 30, 2021, was $(933) thousand, an improvement of $59.4 million compared to a gross loss of $(60,371) thousand in the same period of 2020 [93]. - Operating loss for the three months ended June 30, 2021, was $(65,618) thousand, an improvement of $88.9 million compared to $(154,483) thousand in the same period of 2020 [93]. - The net loss attributable to Cooper-Standard Holdings Inc. for the three months ended June 30, 2021, was $(63,611) thousand, a decrease of $70.6 million from $(134,219) thousand in the same period of 2020 [93]. - Total sales for the three months ended June 30, 2021, were $533,185, an increase of $192,718 compared to $340,467 for the same period in 2020 [104]. - North America sales for the three months ended June 30, 2021, were $247,525, up from $126,337 in the same period in 2020, reflecting a change of $121,188 [104]. - Adjusted EBITDA for the three months ended June 30, 2021, was $(14,726,000), an improvement from $(93,752,000) in the prior year [118]. - The company reported a net loss of $63,611,000 for the three months ended June 30, 2021, compared to a net loss of $134,219,000 for the same period in 2020 [116]. Production and Sales Growth - Light vehicle production in North America for the three months ended June 30, 2021, was 3.2 million units, a 132.2% increase from 1.4 million units in the same period of 2020 [91]. - Sales for the six months ended June 30, 2021, increased by 20.8% to $1,202,152, compared to $995,357 for the same period in 2020, driven by vehicle production volume increases and foreign exchange [100]. - Total automotive sales for the six months ended June 30, 2021, reached $1.13 billion, up from $934.6 million in 2020, representing an increase of $198.1 million [107]. - The company reported a total automotive sales increase of $220.6 million due to volume and mix improvements, despite challenges from semiconductor supply issues [107]. Cost and Expense Management - Gross profit for the six months ended June 30, 2021, was $67,359, a significant improvement of 491.0% compared to a gross loss of $17,228 in the same period in 2020 [101]. - Gross profit margin for the six months ended June 30, 2021, was 5.6%, compared to a gross loss margin of (1.7)% for the same period in 2020 [101]. - Selling, administration, and engineering expenses for the six months ended June 30, 2021, were 9.0% of sales, down from 14.0% in the same period in 2020, due to lower variable employee compensation and divestitures [101]. - Net interest expense for the six months ended June 30, 2021, increased by $12.9 million compared to the same period in 2020, mainly due to a full six months of interest expense for Senior Secured Notes issued in May 2020 [103]. - The company incurred restructuring charges of $11,631,000 during the three months ended June 30, 2021 [118]. Economic Outlook - In North America, the economic growth is projected at approximately 6.0% for 2021, supported by historic levels of fiscal stimulus and rapid vaccine distribution [87]. - The global economy is expected to grow by approximately 5.6% in 2021, according to World Bank economists [87]. - In South America, the Brazilian economy is estimated to grow by approximately 4.5% in 2021 despite facing significant challenges from high COVID-19 infection rates [89]. Operational Challenges - The semiconductor supply issues in 2021 resulted in slowdowns and occasional stoppages in vehicle production, but improvements are expected in the second half of 2021 [91]. - The company highlighted the ongoing impact of the COVID-19 pandemic on its financial condition and operations, indicating significant risks to liquidity [122]. - The company noted potential variability in working capital requirements and risks associated with international operations, including changes in trade laws and currency fluctuations [122]. - The company emphasized the importance of maintaining effective controls and procedures to mitigate risks related to operational disruptions and legal challenges [122]. Cash Flow and Capital Expenditures - Net cash used in operations decreased to $60.7 million for the six months ended June 30, 2021, from $126.2 million in 2020, primarily due to working capital improvements [114]. - The company expects to spend approximately $100 million to $115 million on capital expenditures in 2021, reflecting a continued reduction in overall capital spending [114]. - The corporate segment reported an adjusted EBITDA loss of $0.2 million for the six months ended June 30, 2021, compared to a loss of $5.4 million in 2020, showing a change of $5.2 million [111]. - The company continues to actively preserve cash and enhance liquidity, including decreasing capital expenditures and monitoring liquidity situations closely [112]. - As of June 30, 2021, the company had approximately $98.7 million of repurchase authorization remaining under its stock repurchase program, with no repurchases made during the first half of 2021 [115]. Accounting and Risk Management - The company has not experienced significant changes in critical accounting estimates during the six months ended June 30, 2021 [121]. - There have been no material changes to the company's market risk disclosures from those previously reported in the 2020 Annual Report [123].