# Cooper-Standard Holdings Inc.: Form 10-Q for the period ended Mar 31, 2022

- Company: [Cooper-Standard Holdings Inc.](/companies/cps.md) (CIK 1320461)
- Form: 10-Q
- Filed: 2022-05-06
- Accepted by EDGAR: May 6, 2022, 16:10 ET
- Period: 2022-03-31
- Accession: 0001320461-22-000060
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1320461/000132046122000060/cps-20220331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1320461/000132046122000060/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-01-01 to 2022-03-31 | $0 | us-gaap:Revenues |
| Cost of revenue | 3 months, 2022-01-01 to 2022-03-31 | $591.4m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2022-01-01 to 2022-03-31 | $21.5m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2022-01-01 to 2022-03-31 | $51.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2022-01-01 to 2022-03-31 | −$40.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-01-01 to 2022-03-31 | $652.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-01-01 to 2022-03-31 | −$61.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-01-01 to 2022-03-31 | −$3.58 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-01-01 to 2022-03-31 | −$3.58 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2022-01-01 to 2022-03-31 | 17,136,411 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2022-01-01 to 2022-03-31 | −$12.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2022-01-01 to 2022-03-31 | $32.3m | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2022-03-31 | $252.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-03-31 | $1.09bn | us-gaap:AssetsCurrent |
| Total assets | at 2022-03-31 | $2.28bn | us-gaap:Assets |
| Current liabilities | at 2022-03-31 | $725.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-03-31 | $2.01bn | us-gaap:Liabilities |
| Current portion of debt | at 2022-03-31 | $53.6m | us-gaap:DebtCurrent |
| Shareholders' equity | at 2022-03-31 | $275.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,868 characters.

*This management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Our historical results may not indicate, and should not be relied upon as an indication of, our future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. See “Forward-Looking Statements” below for a discussion of risks associated with reliance on forward-looking statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed below and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (“2021 Annual Report”), including Item 1A. “Risk Factors.” The following should be read in conjunction with our 2021 Annual Report and the other information included herein. Our discussion of trends and conditions supplements and updates such discussion included in our 2021 Annual Report. References in this quarterly report on Form 10-Q (the “Report”) to “we,” “our,” or the “Company” refer to Cooper-Standard Holdings Inc., together with its consolidated subsidiaries.*

### Executive Overview

### Our Business

We design, manufacture and sell sealing, fuel and brake delivery, and fluid transfer systems for use primarily in passenger vehicles and light trucks manufactured by global automotive original equipment manufacturers (“OEMs”). We are primarily a “Tier 1” supplier, with approximately 83% of our sales in 2021 made directly to major OEMs. We operate our business along the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other.

### Recent Trends and Conditions

#### General Economic Conditions and Outlook

The global automotive industry is susceptible to uncertain economic conditions that could adversely impact new vehicle demand and production. Business conditions may vary significantly from period to period or region to region. In 2020, the COVID-19 pandemic created an unusually high degree of economic disruption and uncertainty globally which adversely impacted automotive production. In 2021, global automotive production was again impaired by lingering impacts of the COVID-19 pandemic and broad supply chain challenges stemming, in part, from a sharp rebound in overall industrial demand. In early 2022, global economic uncertainty remains and is increasing as pandemic related restrictions are again being imposed in certain large population centers, and evolving military actions in Eastern Europe are creating a regional humanitarian and economic crisis with broad global implications.

In North America, U.S. consumer confidence has trended downward since the second quarter of 2021. Key drivers of the decline are significant inflation, continuing supply chain disruptions and enacted and prospective interest rate hikes. Geopolitical tensions and persistent concerns over new variants of COVID-19 are also important factors. However, U.S. households have benefited from past economic stimulus actions, and personal savings rates remain high. In addition, the unemployment rate in the U.S. is near an all-time low. Finally, the U.S. government has begun to take actions to control inflation. The Federal Reserve Bank announced a 25 basis point increase in the Federal Funds interest rate in March and set expectations for six additional interest rate hikes during the remainder of the year. However, future government spending authorized by recently passed infrastructure legislation and private spending related to pent-up consumer demand are expected to support continued economic growth. Economists at the International Monetary Fund (IMF) are expecting the economies of the United States, Canada and Mexico to grow by 3.7 percent, 3.9 percent and 2.0 percent, respectively, in 2022.

In Europe, the war in Ukraine and related sanctions imposed on Russia are having a dramatic impact on energy prices and energy security. This is translating into lower output and higher inflation for most Eurozone countries. Supply chain disruptions have also hurt certain industries – including the automobile sector, with the war and sanctions hindering the production of key input materials. The easing of COVID-19 restrictions, tighter labor markets, pent-up spending and EU fund disbursements should sustain activity and support some growth in 2022. Economists at the IMF are currently expecting the economy in the Eurozone region to grow by approximately 2.8 percent for the year.

In the Asia Pacific region, the combination of more transmissible variants and the strict zero-COVID strategy in China has led to repeated mobility restrictions and localized lockdowns that have weighed on economic activity and private consumption. Recent lockdowns in key Chinese manufacturing and trading hubs such as Shenzhen and Shanghai will likely compound supply disruptions elsewhere in the region and beyond. Moreover, real estate investment growth in China has slowed significantly, and demand for Chinese exports is expected to be weaker as a result of the war in Ukraine. Still, the Chinese government recently set a GDP growth target of 5.5 percent for 2022, implying that further stimulus measures may be implemented to sustain economic growth. Economists at the IMF are expecting the Chinese economy to grow just 4.4 percent for the year.

In South America, the Brazilian government has attempted to rein in inflation by implementing a 975 basis point increase in interest rates. This is expected to weigh on consumer demand as well as industrial production and growth. However, with the October presidential election looming, the government has also implemented a significant social spending program and a reduction in fuel tax rates targeted at aiding the lower and middle-income segments of the population. Even with the increased social spending, economists at the IMF are now estimating the Brazilian economy will grow just 0.8 percent in 2022. We remain cautious for the economic outlook in this market given the long history of political instability and economic volatility in the region.

#### Raw Materials

Our business is susceptible to inflationary pressures with respect to raw materials which may place operational and profitability burdens on the entire supply chain. Costs related to raw materials, such as steel, aluminum, and oil and oil-derived commodities, continue to be volatile, which led to significant increases in these costs in 2021. Current global events add another layer of uncertainty to raw material costs for 2022, and we continue to see significant inflationary pressure. As such, on an ongoing basis, we work with our customers and suppliers to mitigate both inflationary pressures and our material-related cost exposures.

#### Production Levels

Our business is directly affected by the automotive vehicle production rates in North America, Europe, Asia Pacific and South America which have been adversely affected by a series of events in recent years. Beginning in the first quarter of 2020, we experienced production shutdowns related to COVID-19. Beginning in the first quarter of 2021, OEM production volumes were disrupted by the global shortage of semiconductors. In 2022 disruptions stemming from the Russia-Ukraine crisis have further exacerbated supply chain disruptions and vehicle production levels. We continue to collaborate closely with our customers to minimize production inefficiencies while supporting their needs.

Light vehicle production in certain regions for the three months ended March 31, 2022 and 2021 was as follows:

*(In millions of units)*

|  | Three Months Ended March 31, 2022(1) | 2021(1) | % Change |
| --- | ---: | ---: | ---: |
| North America | 3.6 | 3.6 | (1.8)% |
| Europe | 3.9 | 4.7 | (18.3)% |
| Asia Pacific | 11.1 | 11.1 | 0.2% |
| Greater China | 6.2 | 5.9 | 5.9% |
| South America | 0.6 | 0.7 | (12.7)% |

(1) Production data based on S&P Global (formerly IHS Markit), April 2022.

In all regions, production volumes were impacted by the global shortage of semiconductors which began in the first quarter of 2021 and deteriorated thereafter. Additionally in Europe, vehicle production in the three months ended March 31, 2022 was negatively impacted by additional supply chain issues related to the Russia-Ukraine crisis.

### Results of Operations

*(dollar amounts in thousands)*

|  | Three Months Ended March 31, 2022 | 2021 | Change |
| --- | ---: | ---: | ---: |
| Sales | $612,984 | $668,967 | $(55,983) |
| Cost of products sold | 591,442 | 600,675 | (9,233) |
| Gross profit | 21,542 | 68,292 | (46,750) |
| Selling, administration & engineering expenses | 51,904 | 58,054 | (6,150) |
| Gain on sale of business, net | — | (891) | 891 |
| Amortization of intangibles | 1,746 | 1,772 | (26) |
| Restructuring charges | 7,831 | 21,047 | (13,216) |
| Impairment charges | 455 | — | 455 |
| Operating loss | (40,394) | (11,690) | (28,704) |
| Interest expense, net of interest income | (18,177) | (17,784) | (393) |
| Equity in (losses) earnings of affiliates | (1,356) | 786 | (2,142) |
| Other expense, net | (1,211) | (5,089) | 3,878 |
| Loss before income taxes | (61,138) | (33,777) | (27,361) |
| Income tax expense | 652 | 936 | (284) |
| Net loss | (61,790) | (34,713) | (27,077) |
| Net loss attributable to noncontrolling interests | 430 | 849 | (419) |
| Net loss attributable to Cooper-Standard Holdings Inc. | $(61,360) | $(33,864) | $(27,496) |

### Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021

#### Sales

Sales for the three months ended March 31, 2022 decreased 8.4%, compared to the three months ended March 31, 2021. The decrease in sales was driven by lower vehicle production volume due to the impact of semiconductor supply issues in the current year, foreign exchange, and the deconsolidation of a joint venture in the Asia Pacific region. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

*(dollar amounts in thousands)*

|  | Three Months Ended March 31, 2022 | 2021 | Change | Variance Due To: Volume / Mix\* | Foreign Exchange | Deconsolidation |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Total sales | $612,984 | $668,967 | $(55,983) | $(37,454) | $(10,059) | $(8,470) |

\* Net of customer price adjustments

#### Gross Profit

*(dollar amounts in thousands)*

|  | Three Months Ended March 31, 2022 | 2021 | Change | Variance Due To: Volume / Mix\* | Foreign Exchange | Cost Increases/(Decreases) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Cost of products sold | $591,442 | $600,675 | $(9,233) | $(33,332) | $(7,416) | $31,515 |
| Gross profit | 21,542 | 68,292 | (46,750) | (4,122) | (2,643) | (39,985) |
| Gross profit percentage of sales | 3.5% | 10.2% |  |  |  |  |

\* Net of customer price adjustments

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation, warranty costs and other direct operating expenses. The Company’s material cost of products sold was approximately 50% and 48% of total cost of products sold for the three months ended March 31, 2022 and 2021, respectively. The change in the cost of products sold was impacted by commodity and wage inflation, higher labor and overhead costs due to inconsistent volume production schedules, and higher energy and transportation costs. These costs were partially offset by volume and mix, foreign exchange, purchasing lean, manufacturing efficiencies, and the deconsolidation of a joint venture in the Asia Pacific region.

Gross profit for the three months ended March 31, 2022 decreased $46.8 million compared to the three months ended March 31, 2021. The change was driven by commodity and wage inflation, volume and mix, and foreign exchange. These items were partially offset by customer recovery of cost increases, manufacturing efficiencies, purchasing lean and restructuring savings.

*Selling, Administration and Engineering Expense.* Selling, administration and engineering expense includes administrative expenses as well as product engineering and design and development costs. Selling, administration and engineering expense for the three months ended March 31, 2022 was 8.5% of sales compared to 8.7% for the three months ended March 31, 2021. The decrease was primarily due to lower compensation costs due to salaried headcount initiative savings, customer recovery of engineering expense, and foreign exchange, partially offset by wage inflation.

*Gain on Sale of Business, Net.* The gain on sale of business of $0.9 million for the three months ended March 31, 2021 related to the net effect of our 2020 divestitures.

*Amortization of Intangibles.* Intangible amortization for the three months ended March 31, 2022 was comparable to the three months ended March 31, 2021.

*Restructuring.* Restructuring charges for the three months ended March 31, 2022 decreased $13.2 million compared to the three months ended March 31, 2021. The decrease was driven by lower restructuring charges primarily in Europe.

*Impairment Charges.* Non-cash impairment charges for the three months ended March 31, 2022 of $0.5 million related to idle assets, primarily in a certain European location.

*Interest Expense, Net.* Net interest expense for the three months ended March 31, 2022 increased $0.4 million compared to the three months ended March 31, 2021, due to higher debt balances.

*Other Expense, Net.* Other expense for the three months ended March 31, 2022 decreased $3.9 million compared to the three months ended March 31, 2021, primarily due to lower foreign currency losses, partially offset by the loss on deconsolidation of joint venture.

*Income Tax Expense.* Income tax expense for the three months ended March 31, 2022 was $0.7 million on losses before income taxes of $61.1 million compared to an income tax expense of $0.9 million on losses before income taxes of $33.8 million for the three months ended March 31, 2021. The effective tax rate for the three months ended March 31, 2022 differed primarily from the effective tax rate for the three months ended March 31, 2021 due to the geographic mix of pre-tax losses and the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions.

### Segment Results of Operations

Our business is organized into the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other. The Company uses Segment adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. We have defined adjusted EBITDA as net income before interest, taxes, depreciation, amortization, restructuring expense, and special items.

The following tables present sales and segment adjusted EBITDA for each of the reportable segments.

### Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021

#### Sales

*(dollar amounts in thousands)*

| Sales to external customers | Three Months Ended March 31, 2022 | 2021 | Change | Variance Due To: Volume/ Mix\* | Foreign Exchange | Deconsolidation |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $321,894 | $339,036 | $(17,142) | $(16,824) | $(318) | $— |
| Europe | 131,414 | 165,776 | (34,362) | (24,620) | (9,742) | — |
| Asia Pacific | 103,753 | 114,225 | (10,472) | (1,794) | (208) | (8,470) |
| South America | 21,519 | 15,486 | 6,033 | 4,909 | 1,124 | — |
| Total Automotive | 578,580 | 634,523 | (55,943) | (38,329) | (9,144) | (8,470) |
| Corporate, eliminations and other | 34,404 | 34,444 | (40) | 875 | (915) | — |
| Consolidated | $612,984 | $668,967 | $(55,983) | $(37,454) | $(10,059) | $(8,470) |

\* Net of customer price adjustments

- Volume and mix, net of customer price adjustments, was driven by vehicle production volume decreases due to semiconductor-related customer schedule reductions.
- The impact of foreign currency exchange primarily related to the Euro and Brazilian Real.

#### Segment adjusted EBITDA

*(dollar amounts in thousands)*

| Segment adjusted EBITDA | Three Months Ended March 31, 2022 | 2021 | Change | Variance Due To: Volume/ Mix\* | Foreign Exchange | Cost (Increases)/ Decreases |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $17,496 | $41,233 | $(23,737) | $(7,010) | $221 | $(16,948) |
| Europe | (14,657) | (1,489) | (13,168) | (3,068) | 244 | (10,344) |
| Asia Pacific | (742) | 3,552 | (4,294) | 157 | 99 | (4,550) |
| South America | (409) | (2,608) | 2,199 | 1,562 | 3,418 | (2,781) |
| Total Automotive | 1,688 | 40,688 | (39,000) | (8,359) | 3,982 | (34,623) |
| Corporate, eliminations and other | (1,543) | (2,148) | 605 | 4,237 | 471 | (4,103) |
| Consolidated adjusted EBITDA | $145 | $38,540 | $(38,395) | $(4,122) | $4,453 | $(38,726) |

\* Net of customer price adjustments

- Volume and mix, net of customer price adjustments, was driven by vehicle production volume decreases due to semi-conductor-related customer schedule reductions.
- The impact of foreign currency exchange was driven by the Brazilian Real.
- The Cost (Increases) / Decreases category above includes:
- Commodity cost and inflationary economics;
- Manufacturing lean efficiencies and purchasing savings through lean initiatives;
- Reduction in compensation-related expenses due to salaried headcount initiatives and restructuring savings.

### Liquidity and Capital Resources

### Short and Long-Term Liquidity Considerations and Risks

We intend to fund our ongoing working capital, capital expenditures, debt service and other funding requirements through a combination of cash flows from operations, cash on hand, borrowings under our senior asset-based revolving credit facility (“ABL Facility”) and receivables factoring. The Company utilizes intercompany loans and equity contributions to fund its worldwide operations. There may be country-specific regulations which may restrict or result in increased costs in the repatriation of these funds. See Note 9. “Debt” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

We continue to actively preserve cash and enhance liquidity, including decreasing our capital expenditures. Based on those actions and current projections of OEM customer production, we believe that our cash flows from operations, cash on hand, borrowings under our ABL Facility and receivables factoring will enable us to meet our ongoing working capital, capital expenditures, debt service and other funding requirements for the next twelve months, despite the challenges presented by the COVID-19 pandemic and supply chain issues facing the industry. We continuously monitor and forecast our liquidity situation, take the necessary actions to preserve our liquidity and evaluate other financial alternatives that may be available to us should the need arise. Our ability to fund our working capital needs, debt payments and other obligations, and to comply with the financial covenants, including borrowing base limitations, under our ABL Facility, depend on our future operating performance and cash flows and many factors outside of our control, including the costs of raw materials, the state of the overall automotive industry and financial and economic conditions, including the continued impact of COVID-19, and other factors.

### Cash Flows

*Operating Activities.* Net cash used in operations was $12.2 million for the three months ended March 31, 2022, compared to net cash used in operations of $7.1 million for the three months ended March 31, 2021. The net change was primarily due to reduced cash earnings, partially offset by improvement in working capital.

In April 2022, subsequent to the end of the first quarter, we received $28.5 million in cash payments from the United States Internal Revenue Service for tax refunds related to net operating loss carrybacks. We expect to receive additional refunds of approximately $23.0 million during the remainder of the second quarter of 2022.

*Investing Activities.* Net cash provided by investing activities was $20.1 million for the three months ended March 31, 2022, compared to net cash used in investing activities of $36.3 million for the three months ended March 31, 2021. Cash proceeds of $50.0 million related to the sale-leaseback agreement were received in the three months ended March 31, 2022. We expect to continue initiatives to reduce overall capital spending and anticipate that we will spend approximately $90 - $100 million on capital expenditures in 2022.

*Financing Activities.* Net cash used in financing activities totaled $3.0 million for the three months ended March 31, 2022, compared to net cash provided by financing activities of $1.3 million for the three months ended March 31, 2021. The outflow in 2022 primarily related to principal payments on debt, while the inflow in 2021 was primarily due to an increase in short-term debt.

### Share Repurchase Program

In June 2018, our Board of Directors approved a common stock repurchase program (the “2018 Program”) authorizing us to repurchase, in the aggregate, up to $150.0 million of our outstanding common stock. Under the 2018 Program, repurchases may be made on the open market, through private transactions, accelerated share repurchases, round lot or block transactions on the New York Stock Exchange or otherwise, as determined by us and in accordance with prevailing market conditions and federal securities laws and regulations. We expect to fund any future repurchases from cash on hand and future cash flows from operations. The specific timing and amount of any future repurchase will vary based on market and business conditions and other factors. We are not obligated to acquire a particular amount of securities, and the 2018 Program may be discontinued at any time at our discretion. As of March 31, 2022, we had approximately $98.7 million of repurchase authorization remaining under the 2018 Program. We did not make any repurchases under the 2018 Program during the three months ended March 31, 2022 or 2021.

### Non-GAAP Financial Measures

In evaluating our business, management considers EBITDA and Adjusted EBITDA to be key indicators of our operating performance. Our management also uses EBITDA and Adjusted EBITDA:

- because similar measures are utilized in the calculation of the financial covenants and ratios contained in our financing arrangements;
- in developing our internal budgets and forecasts;
- as a significant factor in evaluating our management for compensation purposes;
- in evaluating potential acquisitions;
- in comparing our current operating results with corresponding historical periods and with the operational performance of other companies in our industry; and
- in presentations to the members of our board of directors to enable our board of directors to have the same measurement basis of operating performance as is used by management in their assessments of performance and in forecasting and budgeting for our company.

In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts and other interested parties in evaluating our performance. We define Adjusted EBITDA as net income (loss) plus income tax expense (benefit), interest expense, net of interest income, depreciation and amortization or EBITDA, as adjusted for items that management does not consider to be reflective of our core operating performance. These adjustments include, but are not limited to, restructuring costs, impairment charges, non-cash fair value adjustments and acquisition-related costs.

EBITDA and Adjusted EBITDA are not financial measurements recognized under U.S. GAAP, and when analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA as a supplement to, and not as alternatives for, net income (loss), operating income, or any other performance measure derived in accordance with U.S. GAAP, nor as an alternative to cash flow from operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and they should not be considered in isolation or as substitutes for analysis of our results of operations as reported under U.S. GAAP. These limitations include:

- they do not reflect our cash expenditures or future requirements for capital expenditure or contractual commitments;
- they do not reflect changes in, or cash requirements for, our working capital needs;
- they do not reflect interest expense or cash requirements necessary to service interest or principal payments under our ABL Facility, Term Loan Facility, Senior Notes and Senior Secured Notes;
- they do not reflect certain tax payments that may represent a reduction in cash available to us;
- although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and
- other companies, including companies in our industry, may calculate these measures differently and, as the number of differences in the way companies calculate these measures increases, the degree of their usefulness as a comparative measure correspondingly decreases.

In addition, in evaluating Adjusted EBITDA, it should be noted that in the future, we may incur expenses similar to the adjustments in the below presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by special items.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA from net loss, which is the most comparable financial measure in accordance with U.S. GAAP:

*(dollar amounts in thousands)*

|  | Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Net loss attributable to Cooper-Standard Holdings Inc. | $(61,360) | $(33,864) |
| Income tax expense | 652 | 936 |
| Interest expense, net of interest income | 18,177 | 17,784 |
| Depreciation and amortization | 32,133 | 33,528 |
| EBITDA | $(10,398) | $18,384 |
| Restructuring charges | 7,831 | 21,047 |
| Deconsolidation of joint venture (1) | 2,257 | — |
| Impairment charges (2) | 455 | — |
| Gain on sale of business, net (3) | — | (891) |
| Adjusted EBITDA | $145 | $38,540 |

(1) Loss attributable to deconsolidation of joint venture investment in Asia Pacific, which required adjustment to fair value.

(2) Non-cash impairment charges in 2022 related to idle assets in Europe.

(3) During 2021, we recorded subsequent adjustments to the net gain on sale of business, which related to the 2020 divestiture of our European rubber fluid transfer and specialty sealing businesses.

### Contingencies and Environmental Matters

The information concerning contingencies, including environmental contingencies and the amount currently held in reserve for environmental matters, contained in Note 19. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report, is incorporated herein by reference.

### Critical Accounting Estimates

There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2022.

### Forward-Looking Statements

This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. Our use of words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “outlook”, “guidance”, “forecast,” or future or conditional verbs, such as “will,” “should,” “could,” “would,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. Among other items, such factors may include: Impacts, including commodity cost increases and disruptions related to the war in Ukraine and the current COVID-related lockdowns in China; our ability to offset the adverse impact of higher commodity and other costs through negotiations with our customers; the impact, and expected continued impact, of the COVID-19 outbreak on our financial condition and results of operations; significant risks to our liquidity presented by the COVID-19 pandemic risk; prolonged or material contractions in automotive sales and production volumes; our inability to realize sales represented by awarded business; escalating pricing pressures; loss of large customers or significant platforms; our ability to successfully compete in the automotive parts industry; availability and increasing volatility in costs of manufactured components and raw materials; disruption in our supply base; competitive threats and commercial risks associated with our diversification strategy through our Advanced Technology Group; possible variability of our working capital requirements; risks associated with our international operations, including changes in laws, regulations, and policies governing the terms of foreign trade such as increased trade restrictions and tariffs; foreign currency exchange rate fluctuations; our ability to control the operations of our joint ventures for our sole benefit; our substantial amount of indebtedness and variable rates of interest; our ability to obtain adequate financing sources in the future; operating and financial restrictions imposed on us under our debt instruments; the underfunding of our pension plans; significant changes in discount rates and the actual return on pension assets; effectiveness of continuous improvement programs and other cost savings plans; manufacturing facility closings or consolidation; our ability to execute new program launches; our ability to meet customers’ needs for new and improved products; the possibility that our acquisitions and divestitures may not be successful; product liability, warranty and recall claims brought against us; laws and regulations, including environmental, health and safety laws and regulations; legal and regulatory proceedings, claims or investigations against us; work stoppages or other labor disruptions; the ability of our intellectual property to withstand legal challenges; cyber-attacks, data privacy concerns, other disruptions in, or the inability to implement upgrades to, our information technology systems; the possible volatility of our annual effective tax rate; the possibility of a failure to maintain effective controls and procedures; the possibility of future impairment charges to our goodwill and long-lived assets; our ability to identify, attract, develop and retain a skilled, engaged and diverse workforce; our ability to procure insurance at reasonable rates; and our dependence on our subsidiaries for cash to satisfy our obligations.

You should not place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date of this quarterly report on Form 10-Q, and we undertake no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where we are expressly required to do so by law.

This quarterly report on Form 10-Q also contains estimates and other information that is based on industry publications, surveys, and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.

## Market risk

As filed, 184 characters.

There have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously disclosed in the Company’s 2021 Annual Report.

## Controls and procedures

As filed, 1,245 characters.

### Evaluation of Disclosure Controls and Procedures

The Company has evaluated, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Based on that evaluation, the Company’s Chief Executive Officer along with the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this Report.

### Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

Filed May 6, 2022.
Source: SEC EDGAR, the filing index for accession 0001320461-22-000060. Last ingested by Listed: Nov 5, 2026, 16:52 ET. No prices; not investment advice.