Cooper Standard reports first quarter 2015 operating results and improves margins in key markets

First Quarter Highlights

• Net income totaled $21.0 million or $1.15 per diluted share
• Adjusted EBITDA totaled $80.8 million or 10.1 percent of sales, up 50 basis points
• Excluding the impact of foreign currency exchange rates, adjusted EBITDA totaled $91.2 million or 10.4 percent of sales, up 80 basis points
• Excluding the impact of foreign currency exchange rates, sales increased by 4.7 percent
• North America operating profit increased 140 basis points to 10.3 percent

Cooper-Standard Holdings Inc. (NYSE: CPS), the parent company of Cooper Standard Automotive, today reported net income of $21.0 million, or $1.15 per diluted share, and adjusted EBITDA of $80.8 million for the first quarter of 2015.  These results compare to net income of $19.7 million or $1.10 per diluted share and adjusted EBITDA of $80.6 million in the first quarter of 2014.

“We are very pleased with the improvement in our adjusted EBITDA margins for the quarter,” stated Jeffrey Edwards, chairman and CEO of Cooper Standard. “Our operating teams have worked very hard to meet the double-digit target that we established for the year and we are on track through the first three months.  We believe the results are indicative of the traction we are gaining in the execution phase of our turnaround plan, which is accelerating our drive for profitable growth.”

Net income of $21.0 million for the first quarter of 2015 included a gain of $11.6 million related to the acquisition of majority ownership in Huayu-Cooper Standard Sealing Systems Co., Ltd. (Shenya) (see Note 1) and $18.8 million in restructuring expense. Excluding these items, income for the quarter was$28.2 million or $1.55 per diluted share, up 24 percent and 22 percent, respectively, over the first quarter of 2014.

Operational Overview

Consolidated

First quarter 2015 sales were $800.1 million compared to sales of $837.6 million in the first quarter of 2014.  The year-over-year variance is largely attributable to a $77.0 million impact from unfavorable foreign currency exchange rates in addition to price adjustments, partially offset by improved product volume and mix, and additional revenue from the Shenya acquisition.  Excluding the impact from foreign currency exchange rates, total sales in the first quarter 2015 were $877.1 million, an increase of 4.7 percent over the first quarter of 2014.

Adjusted EBITDA for the first quarter of 2015 was $80.8 million, or 10.1 percent of sales, compared to $80.6 million, or 9.6 percent of sales, in the same period a year ago.  Improvements in operating efficiency, volume and product mix were offset by $6.6 million in price adjustments, and a negative impact of$10.4 million from unfavorable foreign currency exchange rates.  Excluding the impact from foreign currency exchange rates, adjusted EBITDA was $91.2 million or 10.4 percent of sales.

North America

Cooper Standard’s North America segment reported sales of $417.4 million in the first quarter of 2015 compared to $432.6 million in the first quarter of 2014.  The decrease was driven by unfavorable foreign currency exchange rates, lower production volumes on a key high-volume platform during production ramp-up and unfavorable price adjustments.

North America segment profit was $43.0 million, or 10.3 percent of sales, in the first quarter of 2015.  This compared to segment profit of $38.5 million, or 8.9 percent of sales, in the first quarter of 2014.  The 140 basis point improvement was driven by gains in operating efficiencies and lower material costs and was achieved in spite of significantly lower production volumes on a key high-volume platform during ramp-up and the impact of unfavorable foreign currency exchange rates.

Europe

Cooper Standard’s Europe segment reported sales of $266.8 million in the first quarter of 2015 compared to $308.2 million in the first quarter of 2014.  The decrease was attributable to unfavorable foreign currency exchange rates, partially offset by improvements in volume and product mix.  Excluding the impact of foreign currency exchange rates, Europe segment sales were $325.7 million for the quarter, up 5.7 percent versus the prior year period.

The Europe segment reported a loss of $4.4 million in the first quarter of 2015, compared to a loss of $3.2 million in the first quarter 2014.  Excluding restructuring costs of $18.4 million and the non-operating gain of $11.6 million (see Note 1), segment profit was $2.4 million in the first quarter of 2015 compared to a loss of $0.3 million in the same period a year ago.  The improvement in segment profit was attributable to gains in operating efficiencies, lower material costs, higher sales volume and favorable product mix.  These positive factors were partially offset by unfavorable foreign currency exchange rates and price adjustments.

Asia Pacific

Cooper Standard’s Asia Pacific segment reported sales of $85.7 million in the first quarter of 2015, an increase of 50 percent compared to $57.1 million in the first quarter of 2014.  The consolidation of the revenue from Shenya following Cooper Standard’s acquisition of majority ownership on February 27, 2015accounted for $16.0 million of the top line growth.  Organic growth represented $14.1 million of the increase.

Asia Pacific segment profit was $2.4 million in the first quarter of 2015, an increase of 273 percent compared to the first quarter 2014.  The increase was attributable to improved product volume and mix, lower material costs and the consolidation of Shenya.

South America

Cooper Standard’s South America segment reported sales of $30.2 million in the first quarter of 2015 compared to $39.8 million in the first quarter of 2014.  The decrease was attributable to unfavorable foreign currency exchange rates and lower overall vehicle production in Brazil, as the country continues to struggle with a stagnant economy and lagging consumer demand.

Primarily as a result of lower sales, the South America segment incurred a segment loss of $5.1 million in the first quarter of 2015 compared to a loss of $2.5 million in the first quarter 2014.

Liquidity and Capital Resources

At March 31, 2015, Cooper Standard had cash and cash equivalents totaling $194.4 million, compared to $267.3 million at December 31, 2014.  The decline was due primarily to seasonal changes in working capital and a $24.4 million payment made in connection with the acquisition of Shenya. In addition to its cash and cash equivalents, the Company also had $144.4 million available under its senior amended asset-based revolving credit facility (“ABL”) for total liquidity of $338.8 million at March 31, 2015.

Total debt at March 31, 2015 was $800.4 million compared to $785.9 million at December 31, 2014.    Cooper Standard’s total debt-to-book capitalization ratio was 58.8 percent at March 31, 2015 compared to 57.7 percent at December 31, 2014.  Cooper Standard’s net debt-to-book capitalization ratio was 44.5 percent at March 31, 2015.

Outlook

The Company has reaffirmed or revised its 2015 full year outlook as follows: