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Cooper Standard Reports Fourth Quarter and Full Year 2020 Results

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NORTHVILLE, MI / ACCESSWIRE / February 17, 2021 / Cooper-Standard Holdings Inc. (NYSE:CPS) today reported results for the fourth quarter and full year 2020.Fourth Quarter HighlightsNet loss improved by 60% to $27.2 million or $(1.61) per fully ... Cooper-Standard Holdings Inc

NORTHVILLE, MI / ACCESSWIRE / February 17, 2021 / Cooper-Standard Holdings Inc. (NYSE:CPS) today reported results for the fourth quarter and full year 2020.

Fourth Quarter Highlights

  • Net loss improved by 60% to $27.2 million or $(1.61) per fully diluted share

  • Adjusted net income improved to $3.3 million or $0.19 per fully diluted share

  • Adjusted EBITDA totaled $57.0 million, an increase of 122% over fourth quarter 2019

  • Year-end cash balance of $438 million; total liquidity of $589 million

"Successful execution of our operating plans and longer-term strategic initiatives continue to drive the expected improvement in our results," said Jeffrey Edwards, chairman and CEO, Cooper Standard. "Our teams did an excellent job managing through the difficult business conditions in 2020 and positioned us for further improvement in 2021 and beyond. With a leaner, more efficient organizational structure and a three-year revenue growth trajectory that is expected to outpace the market, we believe we are on track to achieve and sustain double digit ROIC within the next two to three years."


Consolidated Results*

Quarter Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(dollar amounts in millions except per share amounts)

Sales

$

696.9

$

726.2

$

2,375.4

$

3,108.4

Net (loss) income

$

(27.2

)

$

(67.4

)

$

(267.6

)

$

67.5

Adjusted net income (loss)

$

3.3

$

(22.3

)

$

(141.4

)

$

(3.3

)

(Loss) earnings per diluted share

$

(1.61

)

$

(4.00

)

$

(15.82

)

$

3.92

Adjusted earnings (loss) per diluted share

$

0.19

$

(1.32

)

$

(8.36

)

$

(0.19

)

Adjusted EBITDA

$

57.0

$

25.7

$

35.7

$

201.6


*The financial results discussed throughout this release are presented on a preliminary basis. The Company's annual report on Form 10-K for the year ended December 31, 2020 will include audited financial results.

The year-over-year decline in fourth quarter sales was primarily attributable to the divestiture of certain businesses in India and Europe during the third quarter of 2020, partially offset by favorable volume, mix and foreign exchange. The year-over-year improvement in fourth quarter net loss was driven primarily by the Company's ongoing cost reduction and margin enhancement initiatives, including improvements in manufacturing efficiency, reduced selling, administrative and engineering (SGA&E) expense and lower material costs, partially offset by higher interest expense, higher wages and general inflation, the accelerated conclusion of certain customer price agreements and higher incentive compensation accruals. The year-over-year improvement in fourth quarter adjusted EBITDA was also driven primarily by the Company's ongoing cost reduction and margin enhancement initiatives, partially offset by higher wages and inflation, the accelerated conclusion of certain price agreements and higher incentive compensation accruals.

For the full year 2020, the decline in sales was primarily attributable to the extended shutdowns of our customers' operations during the first half of the year as a result of the COVID-19 pandemic and the divestiture of certain businesses in India and Europe during the third quarter of the year. Full year net (loss) income and adjusted EBITDA also declined as a result of the extended shutdowns, as well as unfavorable volume and mix, higher wages and inflation, and higher incentive compensation accruals. These negative impacts were partially offset by improvements in operating efficiency, lower SGA&E expense and other cost reduction initiatives.

Adjusted net income (loss), adjusted EBITDA, adjusted earnings (loss) per diluted share and free cash flow are non-GAAP measures. Reconciliations to the most directly comparable financial measures, calculated and presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), are provided in the attached supplemental schedules.

New Business Awards
During the fourth quarter of 2020, the Company received net new business awards representing an incremental $61 million in anticipated future annualized sales. For the full year, net new business awards totaled $190 million in anticipated future annualized sales.

Further, positive momentum for the Company's innovation products continues. Fourth quarter new contract awards related to innovation products, including both new and converted replacement business, totaled approximately $44 million in anticipated future annualized sales. For the full year, contract awards related to innovation products totaled $278 million. These awards are related to the Company's commercialized innovation products such as MagAlloy™, Gen III Posi-Lock™, Easy-Lock™, EPDM Microdense and TP Microdense. Additionally, the Company has introduced new technologies through our i3 innovation process that are supporting future pursuits with Fortrex™, FlushSeal, TUROS™, PC2000™ and next generation connection technologies.

Net new business reflects anticipated sales from formally awarded programs, less lost business, discontinued programs and replacement programs and is based on IHS Markit forecast production volumes. Contract awards related to innovation products reflect anticipated sales from formally awarded new and replacement programs and are based on IHS Markit forecast production volumes. The calculation of "net new business" and "new contract awards related to innovation products" does not reflect customer price reductions on existing programs and may be impacted by various assumptions embedded in the respective calculation, including actual vehicle production levels on new programs, foreign exchange rates and the timing of major program launches.

Continuing Execution of Cost Reduction and Strategic Initiatives
The Company remains focused on reducing ongoing costs through improved operating efficiency and the further rightsizing of its operating footprint and overhead expenses. As previously announced, two manufacturing facilities and two technical facilities were scheduled to be closed in 2020. The closures of the two manufacturing facilities and one of the technical centers have been completed and the closure of the remaining technical center is in process, with completion now anticipated in the first half of 2021. In total, cost reduction actions and strategic initiatives completed in 2019 and 2020 combined to reduce fixed costs in COGS and SGA&E expense by more than $80 million year-over-year.

Additional actions are anticipated in 2021 to further align the Company's operating footprint, fixed overhead and staffing levels with planned revenue and customer requirements. Most significant among the planned actions will be the rightsizing of staffing levels at certain facilities in Europe. In addition, the Company is reviewing its operating footprint in Brazil following Ford's announcement of plans to exit that market. These planned actions are consistent with the previously stated objective of achieving and sustaining double digit returns on invested capital (ROIC) within the next two to three years.


Quarterly Segment Results
Sales

Three Months Ended December 31,

Variance Due To:

2020

2019

Change

Volume / Mix*

Foreign Exchange

Divestitures

(Dollar amounts in thousands)

Sales to external customers

North America

$

321,223

$

344,902

$

(23,679

)

$

(23,606

)

$

(73

)

$

-

Europe

176,663

191,468

(14,805

)

11,336

12,362

(38,503

)

Asia Pacific

151,909

136,867

15,042

20,033

8,833

(13,824

)

South America

18,822

20,954

(2,132

)

3,787

(5,919

)

-

Total Automotive

668,617

694,191

(25,574

)

11,550

15,203

(52,327

)

Corporate, eliminations and other

28,265

31,998

(3,733

)

(4,326

)

593

-

Consolidated

$

696,882

$

726,189

$

(29,307

)

$

7,224

$

15,796

$

(52,327

)

* Net of customer price reductions

  • The impact of foreign currency exchange was primarily related to the Euro, the Chinese Renminbi and the Brazilian Real.


Adjusted EBITDA

Three Months Ended December 31,

Variance Due To:

2020

2019

Change

Volume / Mix*

Foreign Exchange

Cost Decreases / (Increases)

Divest.

(Dollar amounts in thousands)

Segment adjusted EBITDA

North America

38,378

40,397

(2,019

)

(15,319

)

726

12,006

568

Europe

8,488

1,382

7,106

1,301

1,194

5,355

(744

)

Asia Pacific

19,455

(13,184

)

32,639

5,633

3,495

22,715

796

South America

(2,233

)

1,371

(3,604

)

3,135

(1,012

)

(5,727

)

-

Total Automotive

64,088

29,966

34,122

(5,250

)

4,403

34,349

620

Corporate, eliminations and other

(7,072

)

(4,284

)

(2,788

)

(1,596

)

4

(1,564

)

368

Consolidated adjusted EBITDA

57,016

25,682

31,334

(6,846

)

4,407

32,785

988


* Net of customer price reductions

  • The Cost Decreases / (Increases) category above includes:

    • The increase in wages, incentive compensation and general inflation

    • Supply chain savings, savings from past restructuring and lower SGA&E expense

    • Net operational efficiencies of $17.7 million primarily driven by our North America and Europe segment

    • The non-recurrence of the prior year one-time impact of commercial settlements in Asia Pacific and tax settlements in Brazil


Full Year Segment Results
Sales

Year Ended December 31,

Variance Due To:

2020

2019

Change

Volume / Mix*

Foreign Exchange

Divestitures

(Dollar amounts in thousands)

Sales to external customers

North America

$

1,141,368

$

1,543,845

$

(402,477

)

$

(345,398

)

$

(2,248

)

$

(54,831

)

Europe

586,739

826,335

(239,596

)

(156,374

)

13,047

(96,269

)

Asia Pacific

468,042

503,953

(35,911

)

(9,814

)

3,454

(29,551

)

South America

60,754

94,535

(33,781

)

(16,785

)

(16,996

)

-

Total Automotive

2,256,903

2,968,668

(711,765

)

(528,371

)

(2,743

)

(180,651

)

Corporate, eliminations and other

118,536

139,732

(21,196

)

(21,732

)

536

-

Consolidated

$

2,375,439

$

3,108,400

$

(732,961

)

$

(550,103

)

$

(2,207

)

$

(180,651

)


* Net of customer price reductions

  • Volume and mix, net of customer price reductions, was mainly driven by the impact of the decline in vehicle production volume caused by government imposed global shutdowns related to the COVID-19 pandemic.

  • The impact of foreign currency exchange was primarily related to the Brazilian Real and the Euro.



Adjusted EBITDA

Year Ended December 31,

Variance Due To:

2020

2019

Change

Volume / Mix*

Foreign Exchange

Cost Decreases / (Increases)

Divest.

(Dollar amounts in thousands)

Segment adjusted EBITDA

North America

90,638

213,250

(122,612

)

(156,091

)

900

36,548

(3,969

)

Europe

(39,004

)

22,922

(61,926

)

(72,877

)

1,829

12,333

(3,211

)

Asia Pacific

12,472

(27,497

)

39,969

(12,102

)

4,634

45,432

2,005

South America

(13,841

)

(3,446

)

(10,395

)

(1,148

)

(7,477

)

(1,770

)

-

Total Automotive

50,265

205,229

(154,964

)

(242,218

)

(114

)

92,543

(5,175

)

Corporate, eliminations and other

(14,588

)

(3,621

)

(10,967

)

(10,918

)

(1,488

)

(759

)

2,198

Consolidated adjusted EBITDA

35,677

201,608

(165,931

)

(253,136

)

(1,602

)

91,784

(2,977

)


* Net of customer price reductions

  • Volume and mix, net of customer price reductions, was mainly driven by the impact of the decline in vehicle production volume caused by government imposed global shutdowns related to the COVID-19 pandemic.

  • The unfavorable impact of foreign currency exchange was impacted by the Brazilian Real, the Chinese Renminbi, Canadian Dollar, the Euro, the Polish Zloty, and the Czech Koruna.

  • The Cost Decreases / (Increases) category above includes:

    • Reduction in compensation-related expenses, due to salaried headcount initiatives, purchasing savings through lean initiatives, and restructuring savings;

    • Commodity cost fluctuations, wage increases and variable employee compensation increases;

    • The non-recurrence of the prior year one-time impact of commercial settlements in Asia Pacific and tax settlements in Brazil;

    • Net manufacturing efficiencies of $63 million, weakened by the impact of COVID-19, primarily driven by our European, North America and Asia Pacific segments.

Cash and Liquidity
As of December 31, 2020, Cooper Standard had cash and cash equivalents totaling $438.4 million, compared to $359.5 million as of December 31, 2019. In addition to cash and cash equivalents, the Company had $150.9 million available under its senior amended asset-based revolving credit facility ("ABL facility"), inclusive of outstanding letters of credit, for total liquidity of $589.3 million at December 31, 2020. Based on our current expectations for light vehicle production and customer demand for our products, we believe our current strong cash balance and access to flexible credit facilities will provide sufficient resources to support ongoing operations and the execution of planned strategic initiatives.

Outlook
Based on our outlook for the global automotive industry, macroeconomic conditions, current customer production schedules and our own operating plans, the Company has issued 2021 full year guidance as follows:

Current 2021 Guidance1

Sales

$2.5 - $2.7 billion

Adjusted EBITDA2

$180 - $200 million

Capital Expenditures

$100 - $125 million

Cash Restructuring

$50 - $55 million

Cash Taxes

$10 - $15 million


1 Guidance is representative of management's estimates and expectations as of the date it is published. Current guidance as presented in this press release considers January 2021 IHS Markit production forecasts for relevant light vehicle platforms and models, customers' planned production schedules and other internal assumptions.

2 Adjusted EBITDA is a non-GAAP financial measure. The Company has not provided a reconciliation of projected adjusted EBITDA to projected net income because full-year net income will include special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end. Due to this uncertainty, the Company cannot reconcile projected adjusted EBITDA to U.S. GAAP net income without unreasonable effort.

Conference Call Details
Cooper Standard management will host a conference call and webcast on February 18, 2021 at 9 a.m. ET to discuss its fourth quarter and full year 2020 results, provide a general business update and respond to investor questions.

To participate in the live question-and-answer session, callers in the United States and Canada should dial toll-free 877-374-4041 (international callers dial 253-237-1156) and provide the conference ID 5017629 or ask to be connected to the Cooper Standard conference call. Callers should dial in at least five minutes prior to the start of the call. Analysts and investors are invited to ask questions after the presentations are made.

The interactive webcast and slide presentation can be accessed live or in replay on the investor relations page of the Cooper Standard website at www.ir.cooperstandard.com/events.cfm.

About Cooper Standard
Cooper Standard, headquartered in Northville, Mich., is a leading global supplier of systems and components in diverse transportation and industrial markets. Products include sealing, fuel and brake delivery and fluid transfer systems. Cooper Standard employs approximately 25,000 people globally and operates in 21 countries around the world. For more information, please visit www.cooperstandard.com.

Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. Our use of words "estimate," "expect," "anticipate," "project," "plan," "intend," "believe," "outlook," "guidance," "forecast," or future or conditional verbs, such as "will," "should," "could," "would," or "may," and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. Among other items, such factors may include: the impact, and expected continued impact, of the COVID-19 outbreak on our financial condition and results of operations; significant risks to our liquidity presented by the COVID-19 pandemic risk; prolonged or material contractions in automotive sales and production volumes; our inability to realize sales represented by awarded business; escalating pricing pressures; loss of large customers or significant platforms; our ability to successfully compete in the automotive parts industry; availability and increasing volatility in costs of manufactured components and raw materials; disruption in our supply base; competitive threats and commercial risks associated with our diversification strategy through Advanced Technology Group; possible variability of our working capital requirements; risks associated with our international operations, including changes in laws, regulations, and policies governing the terms of foreign trade such as increased trade restrictions and tariffs; foreign currency exchange rate fluctuations; our ability to control the operations of our joint ventures for our sole benefit; our substantial amount of indebtedness and variable rates of interest; our ability to obtain adequate financing sources in the future; operating and financial restrictions imposed on us under our debt instruments; the underfunding of our pension plans; significant changes in discount rates and the actual return on pension assets; effectiveness of continuous improvement programs and other cost savings plans; manufacturing facility closings or consolidation; our ability to execute new program launches; our ability to meet customers' needs for new and improved products; the possibility that our acquisitions and divestitures may not be successful; product liability, warranty and recall claims brought against us; laws and regulations, including environmental, health and safety laws and regulations; legal and regulatory proceedings, claims or investigations against us; work stoppages or other labor disruptions; the ability of our intellectual property to withstand legal challenges; cyber-attacks, data privacy concerns, other disruptions in, or the inability to implement upgrades to, our information technology systems; the possible volatility of our annual effective tax rate; changes in our assumptions as a result of IRS issuing guidance on the Tax Cuts and Jobs Act; the possibility of a failure to maintain effective controls and procedures; the possibility of future impairment charges to our goodwill and long-lived assets; our ability to identify, attract, develop and retain a skilled, engaged and diverse workforce; our ability to procure insurance at reasonable rates; and our dependence on our subsidiaries for cash to satisfy our obligations; and other risks and uncertainties, including those detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

You should not place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date of this press release and we undertake no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where we are expressly required to do so by law.

This press release also contains estimates and other information that is based on industry publications, surveys and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.

CPS_F

Contact for Analysts:
Roger Hendriksen
Cooper Standard
(248) 596-6465
roger.hendriksen@cooperstandard.com

Contact for Media:
Chris Andrews
Cooper Standard
(248) 596-6217
candrews@cooperstandard.com

Financial statements and related notes follow:

COOPER-STANDARD HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollar amounts in thousands except share and per share amounts)

Quarter Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(Unaudited)

(Unaudited)

(Unaudited)

Sales

$

696,882

$

726,189

$

2,375,439

$

3,108,400

Cost of products sold

616,593

660,647

2,227,892

2,749,278

Gross profit

80,289

65,542

147,547

359,122

Selling, administration & engineering expenses

64,610

78,332

263,611

302,496

Gain on sale of business, net

(520)

(3,391)

(2,834)

(191,571)

Amortization of intangibles

1,979

4,793

11,611

17,966

Impairment of assets held for sale

-

-

86,470

-

Other impairment charges

16,653

18,993

17,893

23,139

Restructuring charges

16,246

21,888

39,482

51,102

Operating (loss) profit

(18,679)

(55,073)

(268,686)

155,990

Interest expense, net of interest income

(18,174)

(10,255)

(59,167)

(44,113)

Equity in earnings of affiliates

1,238

740

396

6,504

Pension settlement charges

(184)

(15,819)

(184)

(15,819)

Other income (expense), net

2,777

(1,169)

(2,580)

(4,260)

(Loss) income before income taxes

(33,022)

(81,576)

(330,221)

98,302

Income tax (benefit) expense

(5,362)

(10,912)

(60,847)

36,089

Net (loss) income

(27,660)

(70,664)

(269,374)

62,213

Net loss attributable to noncontrolling interests

481

3,280

1,769

5,316

Net (loss) income attributable to Cooper-Standard Holdings Inc.

$

(27,179)

$

(67,384)

$

(267,605)

$

67,529

Weighted average shares outstanding

Basic

16,928,472

16,859,946

16,913,850

17,146,124

Diluted

16,928,472

16,859,946

16,913,850

17,208,768

Earnings (loss) per share:

Basic

$

(1.61)

$

(4.00)

$

(15.82)

$

3.94

Diluted

$

(1.61)

$

(4.00)

$

(15.82)

$

3.92



COOPER-STANDARD HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

December 31,

2020

2019

Assets

(Unaudited)

Current assets:

Cash and cash equivalents

$

438,438

$

359,536

Accounts receivable, net

379,564

423,155

Tooling receivable, net

82,150

148,175

Inventories

143,742

143,439

Prepaid expenses

29,748

34,452

Income tax receivable and refundable credits

85,977

32,763

Other current assets

100,110

60,750

Total current assets

1,259,729

1,202,270

Property, plant and equipment, net

892,309

988,277

Operating lease right-of-use assets, net

109,795

83,376

Goodwill

142,250

142,187

Intangible assets, net

67,679

84,369

Deferred tax assets

66,111

56,662

Other assets

74,071

78,441

Total assets

$

2,611,944

$

2,635,582

Liabilities and Equity

Current liabilities:

Debt payable within one year

$

40,731

$

61,449

Accounts payable

385,284

426,055

Payroll liabilities

112,727

88,486

Accrued liabilities

110,827

119,841

Current operating lease liabilities

21,711

24,094

Total current liabilities

671,280

719,925

Long-term debt

982,760

746,179

Pension benefits

152,230

140,010

Postretirement benefits other than pensions

49,613

48,313

Long-term operating lease liabilities

90,517

60,234

Deferred tax liabilities

8,638

10,785

Other liabilities

32,795

34,154

Total liabilities

1,987,833

1,759,600

7% Cumulative participating convertible preferred stock

-

-

Equity:

Common stock

17

17

Additional paid-in capital

498,719

490,451

Retained earnings

350,270

619,448

Accumulated other comprehensive loss

(241,896)

(253,741)

Total Cooper-Standard Holdings Inc. equity

607,110

856,175

Noncontrolling interests

17,001

19,807

Total equity

624,111

875,982

Total liabilities and equity

$

2,611,944

$

2,635,582



COOPER-STANDARD HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

Year Ended December 31,

2020

2019

2018

(Unaudited)

Operating Activities:

Net (loss) income

$

(269,374)

$

62,213

$

99,055

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation

142,618

133,987

131,854

Amortization of intangibles

11,611

17,966

14,844

Gain on sale of business, net

(2,834)

(191,571)

-

Gain on sale of land

-

-

(10,377)

Impairment of assets held for sale

86,470

-

-

Goodwill and other impairment charges

17,893

23,139

88,987

Pension settlement charges

184

15,819

775

Share-based compensation expense

10,435

11,865

8,520

Equity in earnings, net of dividends related to earnings

6,847

(1,587)

(1,856)

Loss on refinancing and extinguishment of debt

-

-

770

Deferred income taxes

(8,722)

15,874

(38,931)

Other

5,232

5,230

2,652

Changes in operating assets and liabilities:

Accounts and tooling receivable

94,125

(26,534)

17,916

Inventories

(15,236)

29,430

1,410

Prepaid expenses

2,099

(150)

(4,647)

Income tax receivable and refundable credits

(52,374)

(3,620)

8,469

Accounts payable

(18,370)

(14,643)

(32,502)

Payroll and accrued liabilities

40,413

(1,258)

(61,800)

Other

(66,951)

21,537

(75,751)

Net cash (used in) provided by operating activities

(15,934)

97,697

149,388

Investing activities:

Capital expenditures

(91,794)

(164,466)

(218,071)

Proceeds from sale of business, net of cash divested

(17,006)

243,362

-

Acquisition of businesses, net of cash acquired

-

(452)

(171,653)

Proceeds from sale of fixed assets and other

1,920

5,586

6,733

Net cash (used in) provided by investing activities

(106,880)

84,030

(382,991)

Financing activities:

Proceeds from issuance of long-term debt, net of discount

245,000

-

-

Principal payments on long-term debt

(6,192)

(4,494)

(3,437)

(Decrease) increase in short term debt, net

(22,372)

(40,406)

65,198

Debt issuance costs

(7,249)

-

(667)

Purchase of noncontrolling interest

-

(4,797)

(2,450)

Repurchase of common stock

-

(36,550)

(59,955)

Taxes withheld and paid on employees' share-based payment awards

(544)

(2,787)

(11,618)

Contribution from noncontrolling interests and other

(928)

5,042

(1,511)

Net cash provided by (used in) financing activities

207,715

(83,992)

(14,440)

Effects of exchange rate changes on cash, cash equivalents and restricted cash

(3,065)

(3,392)

(3,019)

Changes in cash, cash equivalents and restricted cash

81,836

94,343

(251,062)

Cash, cash equivalents and restricted cash at beginning of period

361,742

267,399

518,461

Cash, cash equivalents and restricted cash at end of period

$

443,578

$

361,742

$

267,399

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet:

Cash and cash equivalents

$

438,438

$

359,536

$

264,980

Restricted cash included in other current assets

4,089

12

18

Restricted cash included in other assets

1,051

2,194

2,401

Total cash, cash equivalents and restricted cash shown in the statement of cash flows

$

443,578

$

361,742

$

267,399


Non-GAAP Measures
EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted earnings (loss) per share and free cash flow are measures not recognized under U.S. GAAP and which exclude certain non-cash and special items that may obscure trends and operating performance not indicative of the Company's core financial activities. Management considers EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted earnings (loss) per share and free cash flow to be key indicators of the Company's operating performance and believes that these and similar measures are widely used by investors, securities analysts and other interested parties in evaluating the Company's performance. In addition, similar measures are utilized in the calculation of the financial covenants and ratios contained in the Company's financing arrangements and management uses these measures for developing internal budgets and forecasting purposes. EBITDA is defined as net income (loss) adjusted to reflect income tax expense (benefit), interest expense net of interest income, depreciation and amortization, and adjusted EBITDA is defined as EBITDA further adjusted to reflect certain items that management does not consider to be reflective of the Company's core operating performance. Adjusted EBITDA margin is adjusted EBITDA presented as a percentage of sales. Adjusted net income (loss) is defined as net income (loss) adjusted to reflect certain items that management does not consider to be reflective of the Company's core operating performance. Adjusted basic and diluted earnings (loss) per share is defined as adjusted net income (loss) divided by the weighted average number of basic and diluted shares, respectively, outstanding during the period. Free cash flow is defined as net cash provided by operating activities minus capital expenditures and is useful to both management and investors in evaluating the Company's ability to service and repay its debt.

When analyzing the Company's operating performance, investors should use EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted earnings (loss) per share and free cash flow as supplements to, and not as alternatives for, net income (loss), operating income, or any other performance measure derived in accordance with U.S. GAAP, and not as an alternative to cash flow from operating activities as a measure of the Company's liquidity. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted earnings (loss) per share and free cash flow have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of the Company's results of operations as reported under U.S. GAAP. Other companies may report EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted earnings (loss) per share and free cash flow differently and therefore the Company's results may not be comparable to other similarly titled measures of other companies. In addition, in evaluating adjusted EBITDA and adjusted net income (loss), it should be noted that in the future the Company may incur expenses similar to or in excess of the adjustments in the below presentation. This presentation of adjusted EBITDA and adjusted net income (loss) should not be construed as an inference that the Company's future results will be unaffected by special items. Reconciliations of EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and free cash flow follow.

Reconciliation of Non-GAAP Measures

EBITDA and Adjusted EBITDA
The following table provides reconciliation of EBITDA and adjusted EBITDA from net (loss) income (unaudited):

Quarter Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(dollar amounts in thousands)

Net (loss) income attributable to Cooper-Standard Holdings Inc.

$

(27,179)

$

(67,384)

$

(267,605)

$

67,529

Income tax (benefit) expense

(5,362)

(10,912)

(60,847)

36,089

Interest expense, net of interest income

18,174

10,255

59,167

44,113

Depreciation and amortization

37,502

39,985

154,229

151,953

EBITDA

$

23,135

$

(28,056)

$

(115,056)

$

299,684

Impairment of assets held for sale

-

-

86,470

-

Gain on sale of business, net (1)

(520)

(3,391)

(2,834)

(191,571)

Restructuring charges (2)

16,246

21,888

39,482

51,102

Other impairment charges (3)

16,470

18,993

17,417

23,139

Pension settlement charges (4)

184

15,997

184

15,997

Project costs (5)

1,414

87

5,648

2,090

Lease termination costs (6)

87

164

771

1,167

Divested noncontrolling interest debt extinguishment

-

-

3,595

-

Adjusted EBITDA

$

57,016

$

25,682

$

35,677

$

201,608

Sales

$

696,882

$

726,189

$

2,375,439

$

3,108,400

Net (loss) income margin

(3.9)

%

(9.3)

%

(11.3)

%

2.2

%

Adjusted EBITDA margin

8.2

%

3.5

%

1.5

%

6.5

%

  1. Gain on sale of business primarily related to divestitures in 2020 and divestiture of AVS product line in 2019.

  2. Includes non-cash impairment charges related to restructuring.

  3. Other non-cash impairment charges in 2020 of $17,417 related to fixed assets and right-of-use operating lease assets, net of approximately $476 attributable to our noncontrolling interest. Impairment charges in 2019 related to fixed assets of $23,139.

  4. Non-cash pension settlement charges and administrative fees incurred related to certain of our U.S. and non-U.S. pension plans.

  5. Project costs recorded in selling, administration and engineering expense related to acquisitions and divestitures.

  6. Lease termination costs no longer recorded as restructuring charges in accordance with ASC 842.

Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share
The following table provides reconciliation of net (loss) income to adjusted net (loss) income and the respective earnings (loss) per share amounts (unaudited):

Quarter Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(dollar amounts in thousands, except per share amounts)

Net (loss) income attributable to Cooper-Standard Holdings Inc.

$

(27,179)

$

(67,384)

$

(267,605)

$

67,529

Impairment of assets held for sale

-

-

86,470

-

Gain on sale of business, net (1)

(520)

(3,391)

(2,834)

(191,571)

Restructuring charges (2)

16,246

21,888

39,482

51,102

Other impairment charges (3)

16,470

18,993

17,417

23,139

Pension settlement charges (4)

184

15,997

184

15,997

Project costs (5)

1,414

87

5,648

2,090

Lease termination costs (6)

87

164

771

1,167

Divested noncontrolling interest debt extinguishment

-

-

3,595

-

Tax impact of adjusting items (7)

(3,390)

(8,620)

(24,492)

27,271

Adjusted net income (loss)

$

3,312

$

(22,266)

$

(141,364)

$

(3,276)

Weighted average shares outstanding

Basic

16,928,472

16,859,946

16,913,850

17,146,124

Diluted (8)

16,928,472

16,859,946

16,913,850

17,208,768

(Loss) earnings per share:

Basic

$

(1.61)

$

(4.00)

$

(15.82)

$

3.94

Diluted

$

(1.61)

$

(4.00)

$

(15.82)

$

3.92

Adjusted earnings (loss) per share:

Basic

$

0.20

$

(1.32)

$

(8.36)

$

(0.19)

Diluted

$

0.19

$

(1.32)

$

(8.36)

$

(0.19)

  1. Gain on sale of business primarily related to divestitures in 2020 and divestiture of AVS product line in 2019.

  2. Includes non-cash impairment charges related to restructuring.

  3. Other non-cash impairment charges in 2020 of $17,417 related to fixed assets and right-of-use operating lease assets, net of approximately $476 attributable to our noncontrolling interest. Impairment charges in 2019 related to fixed assets of $23,139.

  4. Non-cash pension settlement charges and administrative fees incurred related to certain of our U.S. and non-U.S. pension plans.

  5. Project costs recorded in selling, administration and engineering expense related to acquisitions and divestitures.

  6. Lease termination costs no longer recorded as restructuring charges in accordance with ASC 842.

  7. Represents the elimination of the income tax impact of the above adjustments, by calculating the income tax impact of these adjusting items using the appropriate tax rate for the jurisdiction where the charges were incurred.

  8. For the purpose of calculating adjusted diluted earnings (loss) per share for the quarter ended December 31, 2020 and the year ended December 31, 2019, the weighted average shares outstanding were 17,097,743 and 17,146,124, respectively.

Free Cash Flow
The following table provides a reconciliation of net cash provided by (used in) operating activities to free cash flow (unaudited):

Quarter Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(dollar amounts in thousands)

Net cash provided by (used in) operating activities

$

10,598

$

67,790

$

(15,934

)

$

97,697

Capital expenditures

(18,387

)

(33,381

)

(91,794

)

(164,466

)

Free cash flow

$

(7,789

)

$

34,409

$

(107,728

)

$

(66,769

)


SOURCE: Cooper-Standard Holdings Inc



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