Cooper-Standard Holdings Inc. Q1 FY2025 earnings call

• Operational excellence: 99% product quality scorecards green, 97% new program launch customer scorecards green; world-class safety performance with 0.30 incident rate, 47 plants with perfect safety records (82% of facilities). - Cost optimization: $20 million in manufacturing/purchasing savings, $8 million from restructuring, $2 million from SG&A/engineering. - New business: $55 million in net new business awards. - Customer recognition: Named GM Supplier of the Year for 8th consecutive year, Toyota excellent achievement award. - Sustainability: Recognized as America's climate leader, EcoVadis recognition, employee environmental initiatives like tree planting and community projects.

First-quarter 2025 sales were $667.1 million, a slight decrease of 1.4% compared to the first quarter of 2024, driven primarily by unfavorable foreign exchange but partially offset by favorable volume and mix. Adjusted EBITDA in the quarter was $58.7 million, doubling from $29.3 million in the first quarter of 2024, due to manufacturing/purchasing lean initiatives, restructuring savings, and royalty payments, partially offset by ongoing inflation, customs duties, and tariffs. On US GAAP basis, net income was $1.6 million in Q1 2025 vs. a net loss of $31.7 million in Q1 2024. Adjusted net income was $3.5 million or $0.19 per diluted share. Capital expenditures were $17.5 million, 2.6% of sales.

• Expect to return to double-digit adjusted EBITDA margins and returns on invested capital. - Confident in mitigating tariff impacts, but indirect impacts on vehicle demand are challenging to forecast. - Aim to lower net leverage ratio to less than two times by end of 2027 assuming normalized vehicle production. - Fiscal 2025 adjusted EBITDA guidance remains between $200 million and $235 million.

• Uncertainty around trade policies and tariffs affecting costs and vehicle demand. - Indirect impacts on vehicle production volumes due to tariffs and consumer preferences.

Q: Is the $2 million in duties and tariffs a timing issue and recoverable?

A: It was a minor timing impact, expected to be recovered, with robust systems to manage and recover costs.

Q: Why is the trajectory of hybrids increasing?

A: Consumers prefer hybrid approach, driving increased content per vehicle for Cooper-Standard, with significant average content opportunity.

Q: What's the production outlook from manufacturers?

A: Continued releases suggest plans are on track, with favorable mix and incentive plans positively impacting production.

Q: How to achieve net leverage ratio to 2 times by 2027?

A: Assumes normalized volume, continued execution, and profitable growth.

Q: What's the guidance for fiscal 2025 adjusted EBITDA?

A: Guidance remains between $200 million and $235 million.