 Cooper Standard
First Quarter Earnings Call
May 10, 2013
May 8, 2013 2:40 pm
Exhibit 99.1 |
 May 8,
2013 2:40 pm 2
Passion for Performance
Safe Harbor
This presentation 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. We make forward-looking statements in this presentation and may make such statements in future filings with the SEC.
We may also make forward-looking statements in our press releases or other public or stockholder
communications. These forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or
intentions relating to acquisitions, business trends, and other information that is not historical
information. When used in this presentation, the words “estimates,”
“expects,” “anticipates,” “projects,” “plans,”
“intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations
of such words or similar expressions are intended to identify forward-looking statements. All
forward-looking statements, including, without limitation, management’s examination of
historical operating trends and data 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, no assurances can be made 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.
There are a number of risks and uncertainties that could cause our actual results to differ materially
from the forward-looking statements contained in this presentation. Important factors
that could cause our actual results to differ materially from the forward-looking statements we make herein include, but are not
limited to: cyclicality of the automotive industry with the possibility of further material
contractions in automotive sales and production effecting the viability of our customers and
financial condition of our customers; global economic uncertainty, particularly in Europe; loss of large customers or significant platforms; supply
shortages; escalating pricing pressures and decline of volume requirements from our customers; our
ability to meet significant increases in demand; availability and increasing volatility in cost
of raw materials or manufactured components; our ability to continue to compete successfully in the highly competitive automotive
parts industry; risks associated with our non-U.S. operations; foreign currency exchange rate
fluctuations; our ability to control the operations of joint ventures for our benefit; the
effectiveness of our lean manufacturing and other cost savings plans; product liability and warranty and recall claims that may be brought against
us; work stoppages or other labor conditions; natural disasters; our ability attract and retain key
personnel; our ability to meet our customers’ needs for new and improved products in a
timely manner or cost-effective basis; the possibility that our acquisition strategy may not be successful; our legal rights to our intellectual
property portfolio; environmental and other regulations; legal proceedings or commercial and
contractual disputes that we may be involved in; the possible volatility of our annual effective
tax rate; our ability to generate sufficient cash to service our indebtedness, obtain future financing, and meet dividend obligations on our 7%
preferred stock; our underfunded pension plans; significant changes in discount rates and the actual
return on pension assets; the possibility of future impairment charges to our goodwill and
long-lived assets; the ability of certain stockholders to nominate certain members of the board of directors; and operating and financial
restrictions imposed on us by our bond indenture and credit agreement.
There may be other factors that may cause our actual results to differ materially from the
forward-looking statements. All forward-looking statements attributable to us or
persons acting on our behalf apply only as of the date of this presentation and are expressly qualified in their entirety by the cautionary statements included
herein. We undertake no obligation to update or revise forward-looking statements to reflect
events or circumstances that arise after the date made or to reflect the occurrence of
unanticipated events. |
 Jeff Edwards
Chairman and Chief Executive Officer
Executive Overview
First Quarter 2013
May 8, 2013 2:40 pm |
 May 8,
2013 2:40 pm 4
Passion for Performance
Executive Overview
•
Q1 Highlights
–
Completed 120 day plan
–
Launched profitable growth strategy
–
Formed Global Leadership Team
–
Strengthening centers of excellences
–
Stabilize European performance
–
Confirm European restructuring / timing |
 Execute/Measure!
Define plans for accelerating
functional agenda.
Company Orientation
Day
0-45
Listen & Learn
Define the Vision
/ Path Forward
Unwavering
Execution
•
Global tour to listen and learn
•
Celebrate success and discover
opportunities
•
Get to know the team
•
Learn technologies,
manufacturing processes and
what customers value
•
Understand pipeline of
innovation
Where are we today?
Where do we want to be?
Day
45-120
Day
120+
•
Undertake more
comprehensive industry
structure assessment
•
Define where we will compete
•
Define how we will compete
•
Define capabilities needed to
support direction
•
Detail specific initiatives to
support desired growth
•
Create management
dashboard
•
Make decisions on running the
business vs. changing the
business
•
Empower, measure, and hold
people accountable
•
Explore inorganic opportunities
Here
Today
Passion for Performance
5
May 8, 2013 2:40 pm |
 |
 May
8, 2013 2:40 pm 7
Platforms for Growth
Fluid Transfer
Systems
Sealing and Trim
Systems
Fuel and Brake
Systems
Overall Market:
$8B/$12B
Overall Market:
$7 B
Overall Market:
$18B
North America
Leader
#2 Supplier
Globally
#1 Supplier
Globally
Passion for Performance
May 8, 2013 2:40 pm |
 Organizing for Success
President
North America
President
Europe
President
Asia Pacific
Regional
Presidents
Focused on
Execution
Chief Executive Officer
Chief Financial
Officer
VP Human
Resources
VP General
Counsel
Chief Operations
Officer
•
Global Continuous
Improvement, Op
Excellence, Best
Business Practices
•
Global Purchasing
•
Global Advanced
Innovation, New
Product Development
Process
•
Global Product Group
Strategies
•
Strategic Planning,
Mergers and
Acquisitions, Joint
Ventures
•
Talent
Management
•
Global
Compensation
and Benefits
•
Secession
Planning
•
HRIS
Implementation
•
Global Legal
Affairs
•
Health,
Safety and
Environment
•
Finance, Audit,
Treasury, Tax
•
Global IT
•
Investor
Relations,
Communications
Corporate Staff Dedicated to Global Support of Presidents and Business
Strategies May 8, 2013 2:40 pm
8
Passion for Performance |
 Financial Overview
First Quarter 2013
Allen Campbell
Chief Financial Officer
May 8, 2013 2:40 pm |
 May
8, 2013 2:40 pm 10
Passion for Performance
Q1 2013 Performance
$ USD Millions
Q1 2012 Revenue: $765.3
Q1 2013 Revenue: $747.6
Note: Numbers subject to rounding
Q1 2012
Q1 2013
Sales
765.3
747.6
Gross Profit
121.7
120.3
SGA
72.0
75.1
Operating Profit
39.7
36.6
Net Income
23.8
20.7
Fully Diluted EPS
$0.90
$0.86
Adjusted EBITDA
83.2
76.7
% Margin
10.9%
10.3%
$0
$100
$200
$300
$400
North
America
Europe
Asia Pacific
South
America
$388.1
$289.0
$54.2
$33.9
$382.8
$264.5
$54.9
$45.4
$0
$100
$200
Q1 2012
Q1 2013
$99.6
$112.9
Non consolidated JV
Performance
Revenue by region |
 EBITDA and Adjusted EBITDA Reconciliation
$ USD Millions
2012
2013
Net income
Provision for income tax expense
EBITDA
Restructuring
Adjusted EBITDA
Three Months Ended March 31,
Net interest expense
Depreciation and amortization
EBITDA and Adjusted EBITDA are Non-GAAP measures. Reference comments on slide
20. $ 23.8
8.1
7.9
11.2
11.2
31.6
29.8
$ 74.7
$ 69.6
5.8
4.1
$ 83.2
$ 76.7
$ 20.7
Note: Numbers subject to rounding
Other
0.3
Stock based compensation
2.7
2.7
-
May 8, 2013 2:40 pm
11
Passion for Performance |
 May
8, 2013 2:40 pm 12
Passion for Performance
$ USD Millions
Q1 2012
Q1 2013
Cash from business
$ 61.2
$ 53.9
Pension
funding
-
US
(20.1)
-
Changes in operating assets & liabilities
(75.6)
(67.2)
Cash used
in
operations
(34.6)
(13.3)
Capital expenditures
(29.2)
(34.3)
Cash used
in
operations and CAPEX
(63.8)
(47.6)
Excess
dividend over earnings on joint venture
-
2.1
Acquisition of business, plus cash acquired
(1.7)
-
Purchase of noncontrolling
interest in joint venture
-
(1.9)
Proceeds from sale of assets
4.2
0.2
Financing activities
0.6
3.1
Preferred stock dividends
(1.7)
(1.7)
Purchase of common
and
preferred securities
(4.9)
(11.1)
Foreign exchange/other
1.3
3.1
Net cash used
$ (65.8)
$ (53.8)
Q1 2013 Cash Flow and Key Financial Ratios
Note: Numbers subject to rounding
•
Net leverage:
$269.0 M
•
Net leverage ratio:
0.9
•
Interest coverage ratio:
6.5 x
•
No major debt maturity until 2018
Key Financial Ratios
Cash Balance as of December 31, 2012
$ 270.6
Cash used
(53.8)
Cash Balance as of March 31, 2013
$ 216.7
ABL Revolver
125.0
Letters of Credit
(27.0)
Total Liquidity
$ 314.7 |
 May
8, 2013 2:40 pm 13
Passion for Performance
2013 Guidance
•
Sales growth: 4% over 2012
•
Capital
expenditures:
$160
million
-
$170
million
•
Cash restructuring: $30 million -
$40 million
•
Cash taxes: $25 million -
$35 million
Guidance assumptions:
•
North American production : 15.9 million
•
Europe (including Russia) production : 18.7 million
•
Average full year exchange rate : $1.30/Euro |
 May
8, 2013 2:40 pm 14
Passion for Performance
Self-Tender Offer
•
Accept for Tender/Payment
-
4,651,162 shares at the purchase price of $43.00
-
Cash payment of $200 million
-
Proration factor of 77.0 %
•
Common Shares outstanding
April 30, 2013
17,801,844
Tendered
(4,651,162)
April 30, 2013 -
adjusted
13,150,682
•
The
Company
utilized
approximately
$20
million
of
cash,
plus
net
bond
proceeds
and warrants exercised |
 Questions & Answers
May 8, 2013 2:40 pm |
 May
8, 2013 2:40 pm 16
Passion for Performance
Summary
•
Ensure all 22,000 employees are aligned with strategy
•
Strengthening our teams, capabilities and engagement
•
Strong community partner
–
Launched Cooper Standard Foundation
•
Continue to adjust footprint and expand globally while exceeding
customer expectations every day |
 Appendix
May 8, 2013 2:40 pm |
 May
8, 2013 2:40 pm 18
Passion for Performance
Net Leverage Ratio and Adj. EBITDA as a % of Sales
as of March 31, 2013
(1)
Includes noncash restructuring.
(2)
Proportionate share of restructuring costs related to Cooper Standard France joint
venture. (3)
Non-cash stock amortization expense and non-cash stock option expense for
grants issued at emergence from bankruptcy. (4)
Impairment charges related to goodwill ($2.8 million) and fixed assets ($7.3
million) (5)
Executive compensation for retired CEO and costs related to search for new
CEO (6)
Noncontrolling interest deferred tax valuation reversal
Note: Numbers subject to rounding
($ USD Millions)
Three Months Ended
Twelve Months
Ended
Jun 30,
2012
Sep 30,
2012
Dec 31,
2012
Mar 31,
2013
Mar 31,
2013
Net income (loss)
$ 77.3
$ 11.6
$ (9.9)
$ 20.7
$ 99.7
Provision (benefit) for income tax expense
(46.2)
5.4
1.2
7.9
(31.7)
Interest expense, net of interest income
10.8
11.3
11.5
11.2
44.8
Depreciation and amortization
30.5
29.1
31.5
29.8
120.9
EBITDA
$ 72.4
$ 57.4
$ 34.3
$ 69.6
$ 233.7
Restructuring
(1)
(0.5)
10.2
13.0
4.8
27.5
Noncontrolling interest restructuring
(2)
-
(0.2)
(2.5)
(0.7)
(3.4)
Stock-based compensation
(3)
2.2
2.4
2.5
2.7
9.8
Impairment charges
(4)
-
-
10.1
-
10.1
Retirement obligation
(5)
-
-
11.5
-
11.5
Noncontrolling interest deferred tax valuation reversal
(6)
-
-
2.0
-
2.0
Other
-
-
-
0.3
0.3
Adjusted EBITDA
$ 74.1
$ 69.8
$ 70.9
$ 76.7
$ 291.5
Interest
Coverage
Ratio
(Adj.EBITDA
/
Net
Interest
Exp)
6.5
Net Leverage
Debt payable within one year
34.9
Long-term debt
450.8
Less: cash and cash equivalents
(216.7)
Net Leverage
269.0
Net Leverage Ratio
0.9
Sales
734.5
684.0
697.1
747.6
2,863.2
Adjusted EBITDA as a percent of Sales
10.1%
10.2%
10.2%
10.3%
10.2% |
 May
8, 2013 2:40 pm 19
Passion for Performance
Non-GAAP Financial Measures
EBITDA and adjusted EBITDA are measures not recognized under Generally
Accepted Accounting Principles (GAAP) which exclude certain non-cash and
non- recurring items.
When analyzing the company’s operating performance, investors should use
EBITDA and adjusted EBITDA in addition to, and not as alternatives for, net
income (loss), operating income, or any other performance measure derived in
accordance with GAAP, or as an alternative to cash flow from operating
activities as a measure of the company’s performance. EBITDA and
adjusted EBITDA have limitations as analytical
tools
and
should
not
be
considered
in
isolation
or
as
substitutes
for
analysis of the company’s results of operations as reported under GAAP. Other
companies may report EBITDA and adjusted EBITDA differently and therefore
Cooper Standard’s results may not be comparable to other similarly
titled measures of other companies. |