Shares of Cooper-Standard Holdings Inc. CPS have lost 9.3% since the company reported earnings for the fourth quarter of 2024. This compares to the S&P 500 index’s 0.01% gain over the same time frame. Over the past month, the stock has lost 13.7% against the S&P 500’s 1.9% growth.
Revenue & Earnings Performance
Cooper Standard reported a fourth-quarter 2024 adjusted loss per diluted share of 16 cents, narrower than the loss of $1.79 in the year-ago quarter.
The company’s fourth-quarter 2024 revenues were $660.8 million, a 1.9% decline from the prior-year period. The decrease was primarily led by unfavorable foreign exchange movements, customer price adjustments and lower production volumes. Despite the drop in revenues, the company posted a significant turnaround in profitability.
Cooper-Standard Holdings Inc. Price, Consensus and EPS Surprise
Cooper-Standard Holdings Inc. Price, Consensus and EPS Surprise
Cooper-Standard Holdings Inc. price-consensus-eps-surprise-chart | Cooper-Standard Holdings Inc. Quote
Key Business Metrics
In terms of segmental performance, revenues in the Sealing Systems division were $350.4 million, a slight decrease from $351.6 million in the prior year. The segment faced adverse foreign exchange impacts, which offset modest volume gains. Meanwhile, revenues in the Fluid Handling Systems segment fell 3.5% year over year to $294.8 million from $305.4 million as lower production volumes and price adjustments weighed on the results.
Despite revenue challenges, profitability in both segments improved. Sealing Systems’ adjusted EBITDA increased 47.1% to $40.2 million from $27.3 million a year earlier, driven by cost efficiencies and restructuring savings. Fluid Handling Systems posted a 74.7% surge in adjusted EBITDA to $27.3 million from $15.6 million in fourth-quarter 2023, benefiting from cost optimization, operational efficiencies and business wins.
Adjusted EBITDA more than doubled to $54.3 million, or 8.2% of sales, from $27.6 million in the prior-year quarter. The improvement was fueled by manufacturing and purchasing efficiencies, restructuring savings, and lower raw material costs. These gains were partially offset by higher wages, general inflation and unfavorable foreign exchange rates.
Cash Position
As of Dec. 31, 2024, Cooper Standard held $170 million in cash and cash equivalents. The company’s total liquidity, including its revolving credit facility, stood at $339.2 million.
Cash provided by operating activities in the fourth quarter was $74.7 million, whereas the free cash flow totaled $63.2 million, slightly above $62.1 million in fourth-quarter 2023. For the year, the cash flow from operations declined to $76.4 million from $117.3 million in 2023, whereas the free cash flow was $25.9 million compared with $36.5 million in the prior year.
Despite lower cash generation in 2024, management stated that Cooper Standard has sufficient financial resources to support ongoing operations, execute strategic initiatives and meet its debt obligations.
Operational Efficiency & Cost Savings
CPS credited its margin enhancement to operational efficiencies and cost-cutting initiatives. The company achieved $76 million in savings from manufacturing and purchasing improvements in addition to $24 million in restructuring-related cost reductions.
While raw material costs declined, these gains were partially offset by inflationary pressures, including higher wages and energy costs, along with unfavorable foreign exchange impacts totaling $43 million. The company’s restructuring initiatives, particularly in the second quarter of 2024, played a crucial role in improving cost efficiency and sustaining positive cash flow.
Management Commentary
CEO Jeffrey Edwards emphasized that the company’s new organizational structure, implemented at the start of 2024, has been instrumental in driving efficiencies and cost reductions. He also highlighted Cooper Standard’s success in winning $181.4 million in net new business awards, including $105.8 million on electric vehicle platforms.
Management remains optimistic about sustaining this momentum. Edwards reiterated that continued improvements in manufacturing efficiency, lean operations and disciplined cost control should contribute to further margin expansion in 2025.
Guidance & Industry Outlook
For 2025, Cooper Standard expects revenues between $2.7 billion and $2.8 billion, suggesting slight growth from the $2.73 billion reported in 2024. Adjusted EBITDA is projected to be $200-$235 million, indicating an increase from the $180.7 million recorded in the previous year. Capital expenditure is anticipated between $45 million and $55 million, whereas it spent $50.5 million in 2024. Meanwhile, net cash interest is forecast to rise to $105-$115 million, implying growth from the $97.3 million registered in 2024, whereas net cash taxes are expected to increase to $30-$35 million, whereas it reported $19.1 million last year.
Management expects global light vehicle production to decline slightly in 2025, particularly in North America and Europe. To counteract these headwinds, the company plans to focus on lean initiatives, raw material cost optimization and higher-margin business launches. Cooper Standard also expects margin expansion to continue, with double-digit EBITDA margins by the fourth quarter of 2025.
Other Developments
In the quarter, CPS recorded gains from asset sales, including the sale of a facility in Canada and divestitures of non-core businesses. These transactions contributed positively to the company’s bottom line and liquidity.
As of Dec. 31, 2024, Cooper Standard held $170 million in cash and cash equivalents, with a total liquidity of $339.2 million, including its revolving credit facility. Management stated that the company has sufficient financial resources to support ongoing operations, execute strategic initiatives and meet debt obligations.
Conclusion
CPS delivered a strong fourth-quarter performance, highlighted by a return to profitability, margin expansion and cost-saving execution. While revenue declines and industry headwinds persist, management remains focused on operational efficiency, cost control and strategic business wins to drive improvements in 2025.
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