Cooper Standard(US:CPS)2025-10-31 14:00Financial Data and Key Metrics Changes - Third quarter 2025 sales were $695.5 million, an increase of 1.5% compared to the third quarter of 2024, driven by positive foreign exchange and favorable volume and mix [8][9] - Adjusted EBITDA for the quarter was $53.3 million, an increase of more than 15.6% compared to $46 million in the third quarter of 2024 [9][10] - Gross margin improved by 140 basis points to 12.5% of sales compared to the prior year [8][9] - The net loss for the third quarter was $7.6 million, an improvement from a net loss of $11.1 million in the same period last year [9][10] Business Line Data and Key Metrics Changes - The company achieved $18 million in savings through lean initiatives and other cost-saving programs during the quarter [5][6] - Net new business awards totaled $96 million in the third quarter, bringing the total for the first nine months to nearly $229 million [6][8] Market Data and Key Metrics Changes - The company experienced favorable foreign exchange impacts of approximately $8 million in the third quarter [11] - Despite flat revenue over the first three quarters, gross profit margin increased by 170 basis points [10][13] Company Strategy and Development Direction - The company is focused on four key strategic imperatives aimed at driving profitable growth and improving returns on invested capital [17][18] - The strategy includes expanding relationships with fast-growing Chinese OEMs, which presents significant growth opportunities [20] Management's Comments on Operating Environment and Future Outlook - Management expects a significant impact in the fourth quarter due to aluminum supply chain disruptions affecting the largest customer, but remains optimistic about underlying demand for new light vehicles [22][23] - The company is maintaining a focus on operational excellence and delivering world-class quality and service [22][23] Other Important Information - The company ended the third quarter with a cash balance of approximately $148 million and total liquidity of approximately $314 million [15][16] - Capital expenditures in the third quarter totaled $11.2 million, consistent with the prior year [10] Q&A Session Summary Question: Impact of fourth-quarter disruptions on production - Management believes the disruptions are short-term and expects improved results in the first half of 2026 as production ramps up [28] Question: Cash flow considerations for the fourth quarter - The company anticipates strong working capital improvements and expects to generate over $30 million in free cash flow in Q4 despite a $55 million interest payment due [30][33] Question: Net new business wins and growth trajectory towards 2030 targets - Management indicated a linear growth path towards 2030, with faster ramp-up expected from Chinese OEM contracts [46] Question: Balance sheet leverage targets - Management remains on target to reduce leverage closer to 2 times by the end of 2027, supported by expected increases in overall volumes [49]