Cooper Standard Third Quarter Results Increase Sharply

Third Quarter 2015 Highlights

• Adjusted EBITDA increased 40.1 percent to $93.3 million or 11.3 percent of sales
• Net income totaled $32.7 million or $1.78 per diluted share
• Sales increased 15.4 percent excluding the impact of foreign currency exchange rates
• Free cash flow improved $28.6 million

Cooper-Standard Holdings Inc. (NYSE: CPS) today reported net income of $32.7 million, or $1.78 per diluted share, and adjusted EBITDA of $93.3 million on sales of $827.5 million for the third quarter of 2015. These results compare to net income of $22.7 million or $1.23 per diluted share and adjusted EBITDA of $66.6 million on sales of $781.0 million in the third quarter of 2014.

“During the third quarter we were able to combine operating improvements with strong sales growth on key platforms to once again drive margins significantly higher year-over-year,” stated Jeffrey Edwards, chairman and CEO of Cooper Standard. “We are very pleased with our results through the first nine months of the year and we look forward to finishing the year strong with continued focus on margin improvement and cash generation.”

Net income of $32.7 million for the third quarter of 2015 included after tax restructuring expense of $8.0 million. Net income of $22.7 million in the third quarter of 2014 included after tax amounts of $15.3 million for a gain on the divestiture of the Company’s thermal and emissions business, and $4.9 million in restructuring expense. Excluding these items, adjusted net income for the third quarter of 2015 was $40.8 million or $2.21 per diluted share, up 233 percent when compared to adjusted net income of $12.2 million or $0.66 per diluted share in the third quarter of 2014.

For the first nine months of 2015, the Company reported net income of $90.2 million, or $4.92 per diluted share, and adjusted EBITDA of $271.1 million on sales of $2.5 billion. By comparison, the Company reported net income of $55.6 million, or $3.07 per diluted share, and adjusted EBITDA of $239.4 million on sales of $2.5 billion in the first nine months of 2014. The Company’s adjusted EBITDA margin for the first nine months of 2015 was 10.9 percent compared to 9.7 percent in the first nine months of 2014. Excluding the impact of foreign currency exchange rates, adjusted EBITDA in the first nine months of 2015 was $301.0 million or 11.0 percent of sales.

Operational Overview

Consolidated

Third quarter 2015 sales increased by $46.6 million or 6.0 percent compared to the third quarter of 2014. The year-over-year variance is largely attributable to favorable volume and mix and additional revenue from the acquisition of Huayu-Cooper Standard Sealing Systems Co. (“Shenya”), partially offset by a $74.1 million impact from unfavorable foreign currency exchange rates. Excluding the impact from foreign currency exchange rates, sales in the third quarter of 2015 were $901.6 million, an increase of 15.4 percent over the third quarter of 2014.

Third quarter adjusted EBITDA increased by $26.7 million or 40.1 percent compared to the third quarter of 2014. The year-over-year variance is primarily attributable to improvements in operating efficiency, favorable volume and mix, and improved supply chain economics. These favorable items were partially offset by wage increases, price adjustments and an $8.4 million impact from unfavorable foreign currency exchange rates. Excluding the impact from foreign currency exchange rates, adjusted EBITDA for the third quarter of 2015 was $101.7 million.

North America

Cooper Standard’s North America segment reported sales of $456.4 million in the third quarter of 2015, an increase of 10.4 percent when compared to $413.5 million in sales recorded in the third quarter of 2014. The increase was attributable to improved volume and mix, partially offset by the unfavorable impact of foreign currency exchange rates and price adjustments. Excluding the impact of exchange rates, North America segment sales were $470.3 million, an increase of $56.8 million or 13.7 percent higher than the third quarter of 2014.

North America segment profit was $58.3 million, or 12.8 percent of sales, in the third quarter of 2015. This compared to segment profit of $45.5 million, or 11.0 percent of sales in the third quarter of 2014. The 180 basis point improvement was driven primarily by improved volume and mix, gains in operating efficiencies and lower material costs, partially offset by the impact of price adjustments, wage increases and unfavorable foreign currency exchange rates.

Europe

Cooper Standard’s Europe segment reported sales of $247.3 million in the third quarter of 2015 compared to $265.2 million in the third 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 $294.4 million for the quarter, up 11.0 percent versus the prior year period.

The Europe segment reported a loss of $4.8 million in the third quarter of 2015, compared to segment profit of $5.5 million in the third quarter of 2014. The segment results for the third quarter 2015 included restructuring expense of $7.1 million. Segment profit in the third quarter of 2014 included $4.9 million of restructuring expense and a gain of $10.1 million related to the sale of the Company’s thermal and emissions business. Excluding these items, Europe segment profit was $2.3 million in the third quarter of 2015 compared to $0.3 million in the third quarter of 2014. The improvement was attributable to 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 $102.1 million in the third quarter of 2015, an increase of 63.8 percent compared to $62.3 million in the third quarter of 2014. The year-over-year variance is largely attributable to the consolidation of the revenue from the Shenya acquisition and improved volume and mix. Excluding growth from acquisitions and the impact of unfavorable foreign currency exchange rates, sales in the Asia Pacific segment increased $5.1 million in the quarter, representing an 8.2 percent organic growth rate, despite lower than expected light vehicle production in China.

The Asia Pacific segment reported a loss of $0.7 million in the third quarter of 2015, compared to segment profit of $1.2 million in the third quarter 2014. The year-over-year change was primarily the result of higher SGA&E expenses as the Company establishes its footprint and infrastructure for planned growth based on its expanded booked business pipeline, as well as higher depreciation and amortization expense and the negative impact of foreign currency exchange rates. These were partially offset by incremental income from the Shenya acquisition and lower material costs.

South America

Cooper Standard’s South America segment reported sales of $21.8 million in the third quarter of 2015 compared to $40.0 million in the third quarter of 2014. The decrease was attributable to unfavorable foreign currency exchange rates and lower overall vehicle production in Brazil.

The South America segment incurred a loss of $7.5 million in the third quarter of 2015 compared to a loss of $11.1 million in the third quarter of 2014. The segment loss decreased year-over-year as the Company scaled back operations in Brazil to align with lower light vehicle production levels.

Liquidity and Capital Resources

At September 30, 2015, Cooper Standard had cash and cash equivalents totaling $232.0 million, compared to $204.8 million at the end of the second quarter 2015 and $267.3 million at December 31, 2014. The sequential quarterly increase was driven by improved cash from operations and a continued focus on reducing capital spending and working capital. Free cash flow (defined as operating cash flow less capital expenditures) improved to $19.6 million in the third quarter of 2015 compared to a usage of $9.0 million in the third quarter of 2014. The cash balance decline in the first nine months of the year is due primarily to seasonal changes in working capital cash and payments made in connection with the acquisition of Shenya. In addition to cash and cash equivalents, the Company had $136.9 million available under its senior amended asset-based revolving credit facility (“ABL”) for total liquidity of $368.9 million at September 30, 2015.

Total debt at September 30, 2015 was $798.7 million compared to $785.9 million at December 31, 2014. Cooper Standard’s net debt-to-book capitalization ratio was 40.4 percent at September 30, 2015.

Outlook

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

Conference Call Details

Cooper Standard management will host a conference call and webcast on November 4 at 9 a.m. ET to discuss its third quarter 2015 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 800-949-4315 (international callers dial 678-825-8315) and provide the conference ID 62992796 or ask to be connected to the Cooper Standard teleconference. Callers should dial in at least five minutes prior to the start of the call. Financial and automotive analysts 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.

Click here to view the full release including financia tables.