• Fourth Quarter Sales: $660.8 million, a decrease of 1.9% compared to Q4 2023.
• Adjusted EBITDA (Q4 2024): $54.3 million, 8.2% of sales, an increase of 96.8% from Q4 2023.
• Net Income (Q4 2024): $40.2 million on a GAAP basis.
• Adjusted Net Loss (Q4 2024): $2.9 million or $0.16 per diluted share.
• Full Year Sales (2024): $2.7 billion, a decrease of 3% from 2023.
• Adjusted EBITDA (Full Year 2024): $180.7 million, up from $167.1 million in 2023.
• Net Loss (Full Year 2024): $78.7 million on a GAAP basis.
• Adjusted Net Loss (Full Year 2024): $56.7 million or $3.23 per diluted share.
• CapEx (2024): $50.5 million, 1.8% of sales.
• Free Cash Flow (Q4 2024): $63.2 million.
• Free Cash Flow (Full Year 2024): $25.9 million.
• Cash on Hand (End of 2024): $170 million.
• Total Liquidity (End of 2024): Nearly $340 million.

• Warning! GuruFocus has detected 4 Warning Signs with CPS.

Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cooper-Standard Holdings Inc (NYSE:CPS) achieved a 52% improvement in operating income for the year, despite challenges such as lower production volumes and unfavorable foreign exchange.
• The company reported significant cost savings of $76 million from efficiency improvements and $24 million from job reduction actions.
• Cooper-Standard Holdings Inc (NYSE:CPS) achieved a world-class safety incident rate of 0.3 per 200,000 hours worked, surpassing previous records.
• The company received numerous awards for product quality and customer service, reflecting its commitment to operational excellence.
• Cooper-Standard Holdings Inc (NYSE:CPS) ended the year with strong liquidity, having $340 million in total liquidity, and expects positive free cash flow in 2025.

Negative Points

• Sales for the fourth quarter of 2024 decreased by 1.9% compared to the same period in 2023, impacted by weaker production volumes and unfavorable foreign exchange.
• The company recorded an adjusted net loss of $2.9 million for the fourth quarter of 2024, despite improvements from the previous year.
• Full-year sales in 2024 decreased by 3% compared to 2023, driven by unfavorable volume and mix, divestitures, and foreign exchange.
• Cooper-Standard Holdings Inc (NYSE:CPS) faced $43 million in higher costs due to unfavorable foreign exchange and $34 million in higher wages and general inflation.
• The company anticipates continued weak production volumes in 2025, with global light vehicle production expected to decline further.

Q & A Highlights

Q: On Slide 16, you mentioned that the content per vehicle in fluid handling would be up 30% in the next five years. Is there any guidance as to what content for vehicle and sealing will be? A: The fluid business will continue to climb as hybrid and electric vehicles become more predominant. For sealing, it's consistent across powertrains, but there are opportunities for higher-tech sealing systems in electric vehicles, particularly for noise management. Overall, sealing content per vehicle remains consistent, but there's potential for growth due to our technology.

Q: How does the shift in mix affect the overall gross margin? Is it positive or negative? A: It's extremely positive. We continue to see enhanced margins as we build out programs and launch new ones. Our margins are going up because we're doing more for our customers, increasing our content, and helping them reduce costs.

Q: How should we think about tariffs? To what extent are you selling products into the US or Mexico? A: We are paying attention to tariffs and have products produced in regions being discussed. If tariffs happen, we'll work with customers to offset them. Our customers have been proactive in communication, and we hope any impact will be short-term.

Q: Are vehicle manufacturers willing to pay for innovation, and how does that affect price downs? A: Yes, manufacturers are willing to pay for innovation if there's a return for them. Our innovations reduce system complexity and costs for customers, increasing our content and margins. While the competitive environment remains, delivering high-quality products and innovation helps separate us from others.

Q: Can you provide insight into your leverage target and timeline? A: We have a target of a two times net leverage ratio by 2027, based on conservative volume assumptions and no refinancing activity. Our profitability and new business launches support this target.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.