Cooper-Standard Holdings Inc. (OTCBB: COSH), the parent company of Cooper Standard Automotive, a leading global supplier of automotive sealing, fuel and brake, and fluid transfer systems, today announced financial results for the first quarter ended March 31, 2013.
“During the quarter, our global leadership team stabilized European performance and focused on improving operational processes around the world,” said Jeffrey Edwards, CEO, Cooper Standard. “We also continued to actively pursue profitable growth opportunities to meet our customers’ growing needs in emerging markets.”
First quarter 2013 results
The Company reported revenue of $747.6 million for the first quarter of 2013, compared to $765.3 million for the first quarter of 2012. Sales were predominantly impacted by vehicle production declines in Europe and unfavorable foreign exchange of $4.8 million.
Gross profit for the quarter was $120.3 million or 16.1 percent of sales, compared to $121.7 million or 15.9 percent of sales for the first quarter of 2012. Gross profit margin was positively affected by lean manufacturing and restructuring savings, partially offset by expenses associated with vehicle launches, higher staffing costs and customer price concessions.
The Company reported net income of $20.7 million or $0.86 per share on a fully diluted basis in the first quarter of 2013, compared to $23.8 million or $0.90 per share in the first quarter of 2012. Net income for the quarter was affected by pre-tax restructuring charges in North America and Europe of $4.8 million and equity earnings from non-consolidated joint ventures of $2.7 million.
Adjusted EBITDA for the first quarter was $76.7 million or 10.3 percent of sales compared to $83.2 million or 10.9 percent of sales in 2012.
Net income to adjusted EBITDA reconciliation
The following table provides a reconciliation of EBITDA and adjusted EBITDA to net income, which is the most comparable U.S. GAAP financial measure (dollars in millions):
| Three Months Ended March 31, | ||||
| 2012 | 2013 | |||
| (dollar amounts in millions) | ||||
| Net income attributable toCooper-Standard Holdings Inc. | $ 23.8 | $ 20.7 | ||
| Provision for income tax expense | 8.1 | 7.9 | ||
| Interest expense, net of interest income | 11.2 | 11.2 | ||
| Depreciation and amortization | 31.6 | 29.8 | ||
| EBITDA | $ 74.7 | $ 69.6 | ||
| Restructuring (1) | 6.1 | 4.8 | ||
| Noncontrolling interest restructuring (2) | (0.3) | (0.7) | ||
| Stock-based compensation (3) | 2.7 | 2.7 | ||
| Other | – | 0.3 | ||
| Adjusted EBITDA | $ 83.2 | $ 76.7 | ||
(1) Includes non-cash restructuring.
(2) Proportionate share of restructuring costs related to FMEA joint venture.
(3) Non-cash stock amortization expense and non-cash stock option expense for grants issued at emergence from bankruptcy.
Management considers EBITDA and adjusted EBITDA as 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. Adjusted EBITDA is defined as net income adjusted to reflect income tax expense, interest expense net of interest income, depreciation and amortization, and certain non-recurring items that management does not consider to be reflective of the Company’s core operating performance.
When analyzing the Company’s operating performance, investors should use EBITDA and adjusted EBITDA in addition to, and not as alternatives for, net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company’s performance. EBITDA and adjusted EBITDA 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 GAAP. Other companies may report EBITDA and adjusted EBITDA differently and therefore Cooper Standard’s results may not be comparable to other similarly titled measures of other companies. In addition, in evaluating adjusted EBITDA, it should be noted that in the future Cooper Standard may incur expenses similar to or in excess of the adjustments in the above presentation. This presentation of adjusted EBITDA should not be construed as an inference that Cooper Standard’s future results will be unaffected by unusual or non-recurring items.
