Cooper-Standard Holdings Inc. has reported results for the fourth quarter and full year 2021.
Fourth Quarter Highlights
- Sales of $601.3 million increased sequentially by 14% compared to third quarter 2021
- Net loss of $102.2 million or $(5.98) per fully diluted share, improved sequentially by 17% compared to third quarter 2021
- Adjusted net loss of $50.3 million, or $(2.94) per fully diluted share, improved sequentially by 53% compared to third quarter 2021
- Adjusted EBITDA of $2.0 million increased sequentially by $35.9 million as compared to third quarter 2021
- Year-end cash balance of $248 million; continuing strong total liquidity of $396 million
“We were pleased to see OEM production schedules begin to stabilize and volumes improve during the fourth quarter, compared to what we saw in the second and third quarters of 2021,” said Jeffrey Edwards, chairman and CEO, Cooper Standard. “Headwinds from increased material and labor costs remain and we have made progress in our negotiations to recover some of those increases in 2022. Our outlook anticipates further improvement in production volumes throughout the year, especially in the second half, which we expect will enable us to drive improved margins and cash flow going forward.”
Consolidated Results
| Quarter Ended December 31, | Year Ended December 31, | ||||||
| 2021 | 2020 | 2021 | 2020 | ||||
| (Dollar amounts in millions except per share amounts) | |||||||
| Unaudited | Unaudited | Unaudited | |||||
| Sales | $ 601.3 | $ 696.9 | $ 2,330.2 | $ 2,375.4 | |||
| Net loss | $ (102.2) | $ (27.2) | $ (322.8) | $ (267.6) | |||
| Adjusted net (loss) income | $ (50.3) | $ 3.3 | $ (222.3) | $ (141.4) | |||
| Loss per diluted share | $ (5.98) | $ (1.61) | $ (18.94) | $ (15.82) | |||
| Adjusted (loss) earnings per diluted share | $ (2.94) | $ 0.19 | $ (13.04) | $ (8.36) | |||
| Adjusted EBITDA | $ 2.0 | $ 57.0 | $ (8.0) | $ 35.7 |
The year-over-year decline in fourth quarter sales was primarily attributable to unfavorable volume and mix associated with continuing supply chain constraints, partially offset by favorable price adjustments. The year-over-year change in fourth quarter net loss was driven primarily by unfavorable volume and mix, higher material costs, higher wages and general inflation, and higher income tax expense, partially offset by favorable price adjustments and lower selling, administrative and engineering (SGA&E) expense. The year-over-year change in fourth quarter adjusted EBITDA was driven primarily by unfavorable volume and mix, higher material costs, and higher wages and general inflation, partially offset by favorable price adjustments and lower SGA&E expense.
For the full year 2021, sales declined primarily due to the divestiture of certain business operations in Europe and India in 2020 and unfavorable volume and mix, partially offset by favorable foreign exchange. The year-over-year change in full year net loss was primarily driven by higher material costs, higher wages and general inflation, unfavorable volume and mix, higher interest expense and higher income tax expense. These negative impacts were partially offset by lower SGA&E expense, improvements in operating efficiency, and other cost reduction initiatives. Full year adjusted EBITDA declined due primarily to higher material costs, higher wages and general inflation, and unfavorable volume and mix, partially offset by lower SGA&E expense, improvements in operating efficiency, and other cost reduction initiatives.
New Business Awards
Electric vehicle trends continue to create opportunity for Cooper Standard. During the fourth quarter of 2021, the company received net new business awards representing approximately $26 million in incremental anticipated future annualized sales. Approximately $18 million of these net new business awards were on electric vehicle platforms. For the full year 2021, the company’s net new business awards totaled approximately $186 million, including $106 million in new awards on electric vehicle platforms. The company believes its world-class engineering and manufacturing capabilities, its innovation programs and its reputation for quality and service are competitive advantages that continue to drive the new business awards.
Continuing Execution of Cost Reduction and Strategic Initiatives
The company says it remains focused on reducing ongoing costs through improved operating efficiency and further rightsizing of its operating footprint, overhead expenses and staffing levels. In 2021, these initiatives resulted in a combined cost savings of approximately $81 million. Further restructuring actions and other cost savings initiatives are anticipated in 2022.
Full Year Segment Results
Sales
| Year Ended December 31, | Variance Due To: | |||||||||||
| 2021 | 2020 | Change | Volume / Mix* | Foreign Exchange | Divestitures / Other | |||||||
| (Dollar amounts in thousands) | ||||||||||||
| Sales to external customers | Unaudited | |||||||||||
| North America | $ 1,148,257 | $ 1,141,368 | $ 6,889 | $ 2,118 | $ 4,771 | $ — | ||||||
| Europe | 518,245 | 586,739 | (68,494) | (40,454) | 21,177 | (49,217) | ||||||
| Asia Pacific | 458,306 | 468,042 | (9,736) | (20,362) | 25,917 | (15,291) | ||||||
| South America | 61,713 | 60,754 | 959 | 4,425 | (3,466) | — | ||||||
| Total Automotive | 2,186,521 | 2,256,903 | (70,382) | (54,273) | 48,399 | (64,508) | ||||||
| Corporate, eliminations and other | 143,670 | 118,536 | 25,134 | 23,351 | 1,783 | — | ||||||
| Consolidated | $ 2,330,191 | $ 2,375,439 | $ (45,248) | $ (30,922) | $ 50,182 | $ (64,508) |
Cash and Liquidity
As of Dec. 31, 2021, Cooper Standard had cash and cash equivalents totaling $248 million and total liquidity, including availability under its amended senior asset-based revolving credit facility, of $395.5 million. Based on our current expectations for light vehicle production and customer demand for our products, we expect our current solid 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 2022 full year guidance as follows:
| Initial 2022 Guidance1 | |
| Sales | $2.6 – $2.8 billion |
| Adjusted EBITDA2 | $50 – $60 million |
| Capital Expenditures | $90 – $100 million |
| Cash Restructuring | $20 – $30 million |
| Net Cash Taxes / (Refund) | $(30) – $(40) million |
| Key Light Vehicle Productions Assumptions | |
| North America | 15.2 million |
| Europe | 18.5 million |
| Greater China | 24.7 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 2022 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.
