Cooper Standard reports Q3 declines, facility closures

Novi, Michigan – Cooper-Standard Holdings Inc. has reported a 15.4% year-on-year fall in third quarter sales to $790.0 million (€713 million) and earnings (adjusted EBIDTA) 37.5% lower at $43.5 million.

In terms of net income, the company posted a loss of $13.9 million, compared to a gain of $32.2 million a year ago, its third quarter results statement issued 5 Nov also shows.

The net loss included restructuring charges related to job cuts, asset impairment charges in Asia and project costs related to acquisitions and divestitures, Cooper Standard noted.  

The company linked the third-quarter sales decline to the divestment of its AVS business, unfavourable volume and mix, customer price adjustments and foreign exchange factors.

Cooper Standard also noted issues around unfavourable volume and mix, inflation, price adjustments and higher material costs, only partly offset by operating efficiencies and cost-savings.

Production levels on key vehicle platforms in North America and Asia were “well below expectations,” according to Jeffrey Edwards, chairman and CEO, Cooper Standard. 

"Unfavourable outcomes of customer negotiations in China and the unanticipated UAW [strike] in the US further reduced sales and profits during the third quarter,” he added.

Edwards pointed to the company’s “aggressive implementation” of initiatives to cut costs, optimise working capital and “align our operations with lower light vehicle production in all regions."

In addition to previously introduced cost-reduction measures, the company is implementing further structural measures, including the closure of 10 facilities – its statement did not identify locations.

Costs of $20-25 million have been earmarked for facility closures, including $11 million in restructuring expense already incurred. Payback is expected within two years.

Looking ahead, Cooper Standard cut its full-year forecasts for earnings (adjusted EBITDA) to $190-210 million, from a $270-300 million projection issued in August.

Sales are now expected to come in at $3.0-3.1 billion, compared to the previously predicted $3.0 - $3.2 billion.