Cooper-Standard Holdings Inc., the parent company of Cooper-Standard Automotive Inc., today announced its first quarter 2007 financial results. Its primary businesses include Body and Chassis Systems, consisting of sealing, noise, vibration, and harshness control parts, and Fluid Handling Systems, consisting of subsystems and components that direct, control, measure, and transport fluids and vapors throughout a vehicle. For the first quarter 2007 it reported sales of $576.3 million, and net income of $4.7 million.
Sales in the first quarter 2007 were 6.6 percent higher than the same period in 2006. The increase resulted primarily from the full quarter impact of the FHS acquisition and favorable foreign exchange. Sales in Europe and South America in the first quarter of 2007 were higher than the first quarter 2006 offsetting the impact of volume declines in North America.
"Our results for the first quarter demonstrate our continued strong operating performance in a difficult automotive environment," said Jim McElya, chairman and CEO, "and we again produced solid operating margins and de- levered the business further, indicating that our emphasis on operational excellence and cash generation is working. We remain confident that our strategies to offset the challenging conditions within the industry are effective and will continue to provide value to our stakeholders."
Highlights of the First Quarter 2007
Key Launches: Some of the new products and programs the company launched during the first quarter 2007 included:
-- Audi A4
-- Ford Motor Company: Ford Escape, Ford F-250 Super Duty, Mercury Mariner and Ford Mondeo
-- General Motors: Chevy Silverado and GMC Sierra
-- Renault: Second generation Renault Twingo
Awards & Recognitions:
-- Toyota Certificate of Achievement for Quality
-- Selected by Toyota to join the Bluegrass Automotive Manufacturing Association (BAMA)
-- New Business Awards: During first quarter 2007, the Company was awarded business of $74.8 million in new, replacement, or conquest business.
Acquisitions:
-- Completed the purchase of Automotive Components Holdings, LLC (ACH) El Jarudo fuel rail operations in Juarez, Mexico on March 31, 2007.
Significant Financial Accomplishments:
-- Sustained strong Adjusted EBITDA margins (11.4%)
-- Continued cash generation from operations ($42.3 million)
-- Debt repayments of $20.4 million ($17 million voluntarily)
-- Cash purchase of ACH El Jarudo fuel rail operations
A summary of the unaudited financial results for the quarter follows:
$ Millions Q-1 Q-1
2006 2007
Net Sales $540.4 $576.3
Earnings Before Taxes $7.9 $9.5
Net Income $5.5 $4.7
Adjusted EBITDA Reconciliation
EBITDA during the first quarter of 2007 was $61.2 million, or $0.6 million higher than the same quarter in 2006. After accounting for restructuring costs and foreign exchange, Adjusted EBITDA for the first quarter was $65.6 million, up $0.6 million from the first quarter of 2006, a period which also included adjustments for inventory write-up and period adjustments related to the FHS acquisition.
Three Months Ended March 31,
(in millions)
2006 2007
Net income $5.5 $4.7
Provision for income tax expense 2.4 4.8
Interest expense, net of
interest income 20.3 21.8
Depreciation and amortization 32.4 29.9
EBITDA $60.6 $61.2
Restructuring 2.2 4.7
Foreign exchange loss (1) 0.1 (0.3)
Inventory write-up(2) 2.1 -
$65.0 $65.6
(1) Unrealized foreign exchanges loss on indebtedness/(gain)
related to 2004 Acquisition.
(2) A write-up of inventory to fair value at the date of the
acquisition.
Management uses Adjusted EBITDA as a measure of performance and to demonstrate compliance with debt covenants. Adjusted EBITDA may vary slightly from the amount used in calculating indenture covenant compliance due to the classification of joint venture equity earnings and Pro Forma acquisition results. EBITDA and Adjusted EBITDA should not be construed as income from operations or net income, as determined by generally accepted accounting principles. Other companies may report EBITDA differently.
Management believes that free cash flow is useful in their analysis of the Company's ability to service and repay its debt and make further investments in the business. In addition management uses Adjusted EBITDA margin as a measure of its financial performance.
For further detail, refer to the company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission and posted on the company's website at: www.cooperstandard.com
About Cooper-Standard Automotive
Cooper-Standard Automotive Inc., headquartered in Novi, Mich., specializes in the manufacture and marketing of systems and components for the global automotive industry. Its primary businesses include Body and Chassis Systems, consisting of sealing, noise, vibration, and harshness control parts, and Fluid Handling Systems, consisting of subsystems and components that direct, control, measure, and transport fluids and vapors throughout a vehicle. Cooper-Standard Automotive Inc. employs more than 16,000 across 62 facilities in 15 countries.
For more information, visit the company's Web site at: www.cooperstandard.com
Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners V, L.P.
This news release includes forward-looking statements, reflecting current analysis and expectations, based on what are believed to be reasonable assumptions. Forward-looking statements may involve known and unknown risks, uncertainties and other factors, which may cause the actual results to differ materially from those projected, stated or implied, depending on many factors, including, without limitation: our substantial leverage; limitations on flexibility in operating our business contained in our debt agreements; our dependence on the automotive industry; availability and cost of raw materials; our dependence on certain major customers; competition in our industry; our conducting operations outside the United States; the uncertainty of our ability to achieve expected Lean savings; our exposure to product liability and warranty claims; labor conditions; our vulnerability to rising interest rates; our ability to meet our customers' needs for new and improved products in a timely manner; our ability to attract and retain key personnel; the possibility that our owners' interests will conflict with yours; our new status as a stand-alone company; our legal rights to our intellectual property portfolio; our underfunded pension plans; environmental and other regulations; and the possibility that our acquisition strategy will not be successful. There may be other factors that may cause our actual results to differ materially from the forward-looking statement. Accordingly, there can be no assurance that Cooper-Standard Automotive will meet future results, performance or achievements expressed or implied by such forward-looking statement. This paragraph is included to provide safe harbor for forward- looking statements, which are not generally required to be publicly revised as circumstances change, and which Cooper-Standard Automotive does not intend to update.
Source: Cooper-Standard Automotive
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