- Full year sales increased 5 percent, outpacing market
- Year-over-year improvement in operating profit
- Key agreements to expand business in Asia Pacific
Cooper-Standard Holdings Inc. (NYSE: CPS), the parent company of Cooper Standard Automotive, a leading global supplier of systems and components for the automotive industry, today announced financial results for the fourth quarter and full year endedDecember 31, 2014. The Company also provided guidance for full year 2015.
“Our sales increased by five percent for the year, with improved operating profit. We also continued to execute our profitable growth strategy with two significant transactions in China. In addition, we introduced four breakthrough innovations and continued to upgrade our global infrastructure,” said Jeffrey Edwards, chairman and CEO, Cooper Standard. “Macroeconomic headwinds in Europe and Brazil, combined with foreign exchange volatility and soft sales on certain key platforms in North America, impacted results in the fourth quarter and full year. As we enter 2015, we remain committed to strengthening our operations and expanding our margins to enhance shareholder value.”
Fourth Quarter and Full Year 2014 Results
Cooper Standard reported revenue of $767.9 million for the fourth quarter of 2014, as compared to $794.2 million in the same quarter of the previous year. The decline was primarily driven by unfavorable foreign exchange of $31.5 million. Full year revenue was $3.2 billion, up from $3.1 billion in 2013, driven by an increase in production volume in North America, Europe and Asia Pacific. In addition, the Jyco acquisition, which was completed on July 31, 2013, provided $45.2 million of incremental sales. Full year sales were partially offset by unfavorable foreign exchange and customer price concessions.
Gross profit for the fourth quarter of 2014 was $117.8 million, as compared to $105.1 million for the fourth quarter of 2013. For the full year 2014, the Company generated a gross profit of $509.4 million, representing 15.7 percent of sales, compared to $472.7 million in 2013, or 15.3 percent of sales. The increase was driven by the favorable impact of continuous improvement, material cost savings and increased production volumes in North America, Europeand Asia Pacific.
Operating profit for the fourth quarter of 2014 was $7.1 million, as compared to $14.6 million in the same quarter in 2013. Favorable gross profit and lower restructuring charges of $8.2 million were more than offset by noncash impairment charges of $26.3 million and pension settlement charges of $3.6 million. Despite fourth quarter charges, full year operating profit was $164.5 million or 5.1 percent of sales, up from $142.1 million or 4.6 percent of sales driven by revenue growth, gross profit expansion, lower restructuring costs, and the gain on the sale of the Company’s thermal and emissions product line.
The Company reported a net loss of $12.8 million in the fourth quarter of 2014, compared to a net loss of $20.8 million in the same quarter of 2013. For the full year 2014, the Company reported a net income of $42.8 million or $2.39 per share on a fully diluted basis. This compares with net income of $47.9 millionor $2.24 per share in 2013. Net income for the year also included $18.9 million (after tax) of debt extinguishment costs related to the Company’s debt repurchase transactions that were completed in Q2 2014.
For the fourth quarter of 2014, Cooper Standard reported adjusted EBITDA of $72.1 million or 9.4 percent of sales, up from $58.7 million or 7.4 percent of sales in the same quarter in 2013. Adjusted EBITDA for the full year 2014 was $311.5 million, or 9.6 percent of sales, compared to $287.4 million, or 9.3 percent of sales in 2013.
2015 Guidance
For 2015, assuming North American vehicle production volume of 17.4 million units, European production volume of 20.3 million units and an average full year exchange rate of 1 Euro = $1.19 and 1 Canadian dollar = $0.84, the Company expects:
- Consolidated Sales: $3.3 – $3.4 billion
- Capital Expenditures: $185 – $210 million
- Cash Restructuring Expenses: $35 – $45 million
- Cash Taxes: $45 – $55 million
- Adj. EBITDA Percent of Sales: 50 – 75 bps improvement over 2014
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:
|
Year Ended December 31, |
Quarter Ended December 31, |
||||||||||
|
2013 |
2014 |
2013 |
2014 |
||||||||
|
(dollar amounts in millions) |
(dollar amounts in millions) |
||||||||||
|
Net income (loss) attributable to Cooper-Standard Holdings Inc. |
$ 47.9 |
$ 42.8 |
$ (20.8) |
$ (12.8) |
|||||||
|
Income tax expense (benefit) |
45.6 |
42.8 |
21.0 |
7.4 |
|||||||
|
Interest expense, net of interest income |
54.9 |
45.6 |
14.9 |
10.3 |
|||||||
|
Depreciation and amortization |
111.1 |
112.6 |
27.9 |
27.9 |
|||||||
|
EBITDA |
$ 259.5 |
$ 243.8 |
$ 43.0 |
$ 32.8 |
|||||||
|
Loss on extinguishment of debt (1) |
– |
30.5 |
– |
– |
|||||||
|
Impairment charges (2) |
– |
26.3 |
– |
26.3 |
|||||||
|
Restructuring (3) |
21.2 |
17.2 |
14.3 |
5.7 |
|||||||
|
Gain on divestiture (4) |
– |
(14.6) |
– |
3.3 |
|||||||
|
Settlement charges(5) |
– |
3.6 |
– |
3.6 |
|||||||
|
Stock-based compensation (6) |
5.2 |
2.8 |
0.9 |
– |
|||||||
|
Acquisition costs |
0.9 |
0.7 |
0.2 |
0.3 |
|||||||
|
Other |
0.6 |
1.2 |
0.3 |
0.1 |
|||||||
|
Adjusted EBITDA |
$ 287.4 |
$ 311.5 |
$ 58.7 |
$ 72.1 |
|||||||
(1) Loss on extinguishment of debt relating to the repurchase of our Senior Notes and Senior PIK Toggle Notes.
(2) Impairment charges in 2014 related to fixed assets of $24.6 million and intangible assets of $1.7 million.
(3) Includes non-cash restructuring and is net of non-controlling interest.
(4) Gain on sale of thermal and emissions product line.
(5) Settlement charges relating to the US pension plans that were amended to offer a one-time voluntary lump sum window to certain terminated vested participants.
(6) Non-cash stock amortization expense and non-cash stock option expense for grants issued at the time of 2010 reorganization.
