CPS - Earnings call transcript Q2 2018 | Cooper-Standard Holdings Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Cooper-Standard Second Quarter 2018 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode.

Following company prepared comments we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded and the webcast will be available for replay later today. I would now like to turn the call over to Roger Hendriksen, Director of Investor Relations.

Roger Hendriksen

good and Christy, you, morning, everyone. Thank joining for our call today. Thanks Chairman our The this will Edwards, Chief Officer; Financial leadership President be Executive of Jon morning Chief Banas, and speaking Jeff Officer. call who and the team members Vice Executive on with are and you

this Before we that begin, statements. forward-looking to need contains I you remind presentation

do uncertainties. believes While and plans assumptions they and to reasonable, information be certain are and made factual based involve these statements management on currently risks current that

For forward-looking of you presentation with statements on the Exchange more to and refer over turn periodic I'll and in call company's that information Commission. to ask we statements, said, Edwards. With the Slide filings this X Securities included that the also Jeff

Jeff Edwards

and begin morning like second highlights good with some quarter. would I on key X Roger data from to and everyone. Okay, points the Slide thanks,

of exchange total unfavorable last in impact on price same plan the in the across production than was our and than was were weaker a mix, were was the offset million. Our Adjusted quarter and over efficiency. in have flow X.X% $XX sales were awards through $XXX Lean new savings and year was below unexpected and business business of mix on half, last challenging up and two and the conditions, business as XX% year. platform positive This EBITDA wins. Despite pressure $XXX key awards than sales Free lower new of initiatives With strong weeks $XXX also all Asia. the any compared price regions, And $XXX terms more nearly a and wins. our the year. new cash the foreign significantly Europe did record to sales new we year $XX business the costs up in quarter, the last cost Volume in million. especially quarter continuing expected generated quarter. second operating rates volume net flow million our year-over-year, reductions very for year. for the in loss customer than pace This last history, we in that That's in despite cash first million. the and million for on market million higher quarter second period quarter improved the and were a we net That's material in vehicle total highest are we higher our quarter our

innovation on end the in also Fortrex OEM for received awards Fortrex business. the products our of million we approves contract for Finally, our quarter, a the during first totaling future annualized and production we received $XX for China. noting worth It's German contract sales quarter, bidding in second customer premium at

to are opportunities the innovations demands increased industry. our automotive and drive product automotive beyond Our throughout business continuing expanding our

to Slide to execute science strategy material Turning our business for our innovation. our grow accelerate our and to profitably X, opportunities continue we

strategy. two the During acquisitions reached align that with we this quarter, on agreements

automotive components in strengthening Mtron When new and will our in The brake synergistic us first provide business. two our fuel with offerings systems, market expand LS global segment. XX.X% to of this of is number closed, acquisition product the position delivery the deal technology that

to brake that cooling the the connect Specifically, turbocharged systems critical brake air components engines. high-pressure cooling the hoses hoses brake it steel jounce that charged flexible for calipers, will are the in add in lines, tubing line

applications. penetration provide addressable billion $X opportunities lines in combined, our Cooper-Standard. relationship these with forward material acquisition to also them exploring potentially new So in than even with represent and We and improved with key China, Brazil. LS more additional licensing business will nonautomotive opportunities and for look This Korea in building product expand our through in market our science new market Mtron technologies business customers

specialty acquisition Manufacturing, this It our adds expands nonautomotive we immediately for categories the industrial morning of business. opportunities acquisition dedicated technology. and group, of Lauren five customers XXX our technology, opportunities for This products and Next, closed cross-selling including of footprint in on adds actually multiple supporting and for creating over which new manufacturing Fortrex Group. application Specialty new our the of new product Industrial also a

service The also of pleased welcome Lauren responsibility. We two the business. and team contributions nonautomotive cultural in for the businesses. Finally, our growing innovation, to the look very our family Cooper-Standard Lauren to synergy sector the specialty their between the team customer we're and passion shares and forward with community

process X. of Slide existing This in to The operations nonautomotive our million industrial Moving and approximately is in team expand sales. will Lauren advancement group. goal $X of We’ve specialty our to the the already annualized strategic combination integrating significant business $XXX towards begun our a into billion.

about With potential our execute we diversify the wide strategy the total growth continued customer of diverse base industries certainly our business range portfolio. for excited we're served, very as to and

our progress Slide advanced advances technology to X. science a Fortrex other in businesses made to our within is to industries. make continuing Moving licensing materials on business, group, We've with our diverse applied are of we which considerable Also number technology focused fronts. on

quarter. begin of to set is licensee Fortrex-based this production first Our products

a industries number considered. designers even its that entered applications agreements capabilities. existing to more number product and to this the their expanded and us come applications agreement. manufacturers In We believe broadened incremental regarding familiar material back statement the to we've with more addition, with in demands into add engineers, material as Fortrex proposals strong is well potential We technology significantly and variations for become they've already of being nondisclosure of once in the

required same wide manufacturers level industrial resilience developed scientists just that variations rebound at high other are variety material that foam a creating for. of time. science Our right been test of no meet of certify low combination at the passed the has development, to We've been Fortrex looking Fortrex three – varieties of a all knowledge, density, applications. In To achieved of and meet our true have characteristics for levels performance roofing standards. and with and also we've the performance able successful these have to breakthrough Fortrex that stiffness a unique specs of major

believe manufacturer licensed we use a just time athletic we shoes. being of the matter in of for Fortrex before it's see So

and fact, and we In discussions that qualities the all us recognize recently meetings major are was shoe manufacturer about to to more the being extremely reaction you out arranged to Their reached speak. and learn initial would performance proactively positive, as further characteristics Fortrex.

for and many foam institute by With the broad others. seating, testing recent confirms outgoing and applications, material footwear, applications, insulation including of international proliferation performance an our processability Fortrex in

aggressive patents Finally, Fortrex an in strategy protect fields global composition IP across including we're to know-how, implementing and markets. many application broad

business I'll science call the to and to technology about And turn for increase is over So building, our licensees. continues momentum both Jon. within Cooper-Standard the Fortrex potential applied now the excitement and materials with

Jon Banas

to good half for I'll financial and next our structure. of the comment comparisons few and and everyone. on In our summary of liquidity, and second detail also first year. we prior profile Jeff, second Thanks, XX, and sheet XXXX additional results first balance provide morning the show quarter the half some our with results slides, quarter a On Slide on capital

exchange the volume quarter Asia, favorable up and Europe X.X% were of last North million, million, gains improvement over in driven and in by and The in America. year. quarter of $XX was modest Second XXXX second foreign Europe $XXX.X primarily sales a

year for While in profit impact a reductions general major we price than weaker which, we Gross of quarter, driven operating had and than overall improved was The and the achieved million reductions. customer the compared it offset period same ago. price reductions, more $XXX.X planned more the the $XX volume offset was million our and was primarily weaker quarter through inflation, $XXX.X Lean cost positive by of was efficiency. in customer the in to was than mix change volume million regions and initiatives by second combined,

to cost not of negative see impact. of X.X% versus Through of offset the reductions on lower mitigate but of sales, inflation Adjusted were certain able second period commodity raw which the the in partially our million, continue net EBITDA to by was compared $XXX.X of chain impact the quarter, efforts, most, million to sales quarter. or a quarter basis, all, was was of XX.X% $X X.X% materials supply The sales a materials profit expense, gross SGA&E of XX.X% same second On $XXX.X in impact had second in quarter. XXXX. we the approximately or optimization of ongoing in million year. in the sales in last We

mix of statutory primarily XX% Our effective is the second in XX% tax was laws and of rate reduce tax lower quarter to second compared by The to for of the new the U.S. effective in quarter changes XX% rate driven XXXX. the earnings. rate

initiatives. continuing quarter a the tax for our costs North business positive weaker compared half $XX.X stronger expect $XX.X quarter an diluted the Europe to and be we respectively, in continuing and as have adjusted the results the by result, quarter. from the are million, income Despite or in up share, was XXXX. in reform achieve was of X%, of The in impact our million the is and Net X% Asia, and primarily second income stronger and headwinds improvement increased analyze and of We from to year $X.XX on cost-reduction interpret our full to to year lowered second net mix anticipated compared volume driven second the and material basis expected ETR per volume expectation. in impacts to mix second America

an mostly for in pressures through by we last, mitigate efforts, steel our the pressure rising tubes commodity and commodity have customers, you expect most Chinese inputs. gross internal of with expect with rest nearly we commodity the plan, Since original tariffs to and million costs. from spoke incremental year, these our of net While $X.X Canadian now suppliers related doubled working to on we

increasing $XXX.X Adjusted the driven the increase X.X% million Looking volume operating of of $X.X exchange, mix, offset now primarily by Sales first spending over XX period change in and same nearly customer CapEx half reductions. last our was billion, perspective, second at EBITDA Gross in with offset period all a XX%. adjusted last profit in efficiency. by favorable The per was months, of helped of the was compared $XXX.X half expense was the for same the nearly the and and gross $XXX.X last the quarter profit. as first half was X% weaker Adjusted first customer net million, first first the essentially offset volume $XXX.X price the From the the to were with activity price XXXX SGA&E repurchase in our half line The lower first partially XXXX. earnings year. by X.X% the up by million, last improvements over foreign quarter regions share reductions reductions to And first up for in in half year. improved million compared in year. share coupled over increased driven income was half partially year.

half, CapEx For consistent more likely will was expectations based the which with heavily follow Full growth. slightly second the last be typical cadence, higher and first spending is half. year than tends innovation our in and historical to our on year continued investments weighted and

the Moving XX. chart on EBITDA change in the quantifies of significant drivers the for to Slide adjusted our second The quarter. year-over-year Slide XX

in brings we half mentioned $XX year. through savings efficiency. the of initiatives This million to first in before, cost-reduction achieved cost efforts our and improved $XX As million operating Lean the

the the initiatives SGA&E driven million We These in $XX impacts savings a quarter. the and lower as reduced cost-saving our of costs mix our negative material and offset million in and systems $XX in from The reductions, expense quarter positive general lower by net were business. primarily the inflation also higher other for cost expense of was items. weaker investments by implement net compensation-related costs and improved and automation, volume achieved and continued headcount of we all areas and savings in was impact price to

in credit even of the to Now period. hand, after to our sheet XX, $XX.X second our quarter of cash million balance moving repurchase using $XXX shares remain strong. the and profile Slide stock million on with We ended

the $XXX million This to hand maintain million. of of the at net $XXX same end revolver, debt $XXX cash was undrawn last XXXX. net on June total and million an time liquidity debt and debt of we June year. Our solid as at million, was of compares With $XXX

our improved XX.Xx. to times, debt months at On EBITDA is from end currently trailing XXXX. our gross coverage basis, to Our while X.Xx times the June net interest X.X X.X XX of is ratio adjusted ratio a leverage improved just

the $XX improvements. certain for quarter Finally, result quarter payment million second timing collections compared was million very cash Free other a good driven and flow capital customer second to few $XX.X working of thoughts capital mainly and in structure. cash a of on flow the XXXX,

in expect continued liquidity and the cash strength generation strong When support combined sheet in with expect balance that strategic we credit plans We our adequately future. our profile, priorities. and our will

with to profitable the in approach allocation acquisition growth strategic in Our capital whether through investment remains consistent top or organic priority.

repurchase represent will we as opportunity. a We and requirements cash still permit, opportunistically shares anticipated continue to balance as shares believe our investment cash compelling our

turn to me back over the call let Now, Jeff.

Jeff Edwards

up Jon. thanks, Okay, I'll Slide our just for to to can a review just to XX. And outlook we XXXX, and this minute move wrap discussion our take morning, so if guidance

year us adjusted record full There tighten to results EBITDA. on are ranges. our still the in however, have refine sales headwinds, led first and and in have another pace guidance our continued Following of half, some we're to year terms which

increased Our top range our our raised line on to $XXX on the based operations full manufacturing of year. more for We're has billion foreign aspects million so within sales our to partially all in guidance savings $X.X continuing our the than to deliver for impact cost-reduction year of initiatives we've We're in pace outlook business. billion. $X.X exchange,

expect IT as and lower expense we functions continue from benefit investments and administrative to SG&A remain streamlined to and in upgraded services. We also E systems

volume from Europe half pricing and and and end for commodity margin. range us inflation weaker of year pressure on keep guidance will in adjusted lower likely continued second our the However, original of EBITDA Asia cost our customers, the in mix

between to we have range full guidance XX% and the for our XX.X% year. narrowed So

Our core opportunities compelling. expansion and are and certainly remains growth exciting margin business strong future automotive and for

remain nonautomotive create very evolution addition, to we of business, rapid significant value. In positive the potential about our has which incremental the

to closing, thank strategies So grow our our to business and for and customers our in support across want the innovating their our in Cooper-Standard team executing engagement business. we continued

to phone so we'll now customers for Q&A. want thank and the concludes This their support our We also open trust. continuing for prepared comments our lines

Operator

Thank comes America. you. first question from of Please John Instructions] with [Operator Our Bank ahead. Murphy go

John Murphy

guys. good right, morning, All

Jeff Edwards

John. morning, Good

Jon Banas

morning, John. Good

John Murphy

the relatively Just on bit beginning a volume came regions in the I expecting in looking lighter a the than sort at people industry-wide major of volume quarter, I at of first question numbers, just little guess, but are was mean, strong probably and a mix. levels. mix

the Are there of something just on something going some top specific on? level? different programs seeing industry am I you're is with sort of the So curious you than line

Jeff Edwards

the some large The publicized of issue, challenges that programs the on it it obvious softening supplier China the the volume fire the third will so the that softer then shifts that And made was Jeff. news rest to haven't But the of we spelled sort be is is primary is up This significant of from of comments all some second industry here, good in variety pretty it out one a terms us. it John. quarter, in that No, in certainly of really third. but supplier hurt obviously, in most that in made the really impact the the The really well had probably a in just given people was there market. we little fire on a Europe and that in across then in quarter. going quarter

John Murphy

sort and rhetoric you up is with you. I domestically And Is of that's there on? Got is everything of still kind business real China following Or maybe angle. your on China? trade mean, the given just going how now, alluding other something as property markets game this And any sort on mentioned the then risk? in then as the in – what's right that protection sort is far formula? being just well? of there I'm might in Fortrex. to it concern copycatted of or have And some trying to intellectual China on you as you're IP for also protection going is understand faring

Jeff Edwards

ball have Okay, based on you a communication think I'm resolved. so and to the pretty that I the hopeful one ultimately, my crystal around all it's whole to out regarding this know, on rhetoric China, going process have I that's there, play experience first how that in it’s early

your issues seen between or not going it governments. two our any created issue related relates challenges customers our as us been on have about headwinds for the that have or We to comment to

Germany. as business statement. speak in U.S. next Obviously, going you'll So two on we the or hopeful been in as Fortrex that And announced sold than on was that certainly, have I now approved so certainly China. resolution pass, that IP in a focus Related quarter Japan general in here am It's already we what's to see rather and far. we're protection is in the that

XX that on keep what – – automotive to So just it's do part to we're pending, And property. we are intellectual our protecting approaching across production. it's I a to we're space. mind within of push approved. sure it's the global patents think into just need advance the really about not filed, sure that within protect that that talked you most do not doing industries these diligence we we've to today that in have make that make mean, our to in we some in it's I were are ourselves going past And

our and the value it part capture So will that we would have management Fortrex the just value the consider to make prudent I a protect industries. on sure across

John Murphy

This But this is just expanded. no incremental threat detecting? that you're as gets

Is just sure to You fair characterization? that want make a you're covered.

Jeff Edwards

Absolutely.

John Murphy

procedure price the quarter? the I just be this it on more characterizing, I the mean, Or slightly might Then like usual? operating It change also just mean price just sounds sort something did you're standard on standard down? is than way of, downs. customer there in your

Jeff Edwards

talked call. we what about think the I pretty in much No, it’s last

more in is X% what we on knew were And things said we range, pressure, lumpy and on but pricing. to we quarters, little year targeting been for John, for the X.X% year. that a have X.X% to were year. right have going for this target a This incremental We across that's we’re little historically the

John Murphy

And in then think other end just criteria is we or sort sort those of cycles really think expanding after markets? lastly, acquisitions sounds five, a about of the a about end markets talk year shorter. because but dumb if real quick analyst, characteristics of – on going cycles, product five Just I like it's some in could acquisitions. as you're What lot wondering you auto stuff usually other end this as product about those

So fast to opportunity just the to trying roll on? how understand

Jeff Edwards

– mean, a that will. new obviously isn't ISG installation business this us. if in to insulation, with just very I space little with the a We of revenue provides you Cooper-Standard. that, what cyclicality line to – the now manufacturing. the with war after space, our call We're It's pleased more the I would thicker expended provide In need in the zeros

our science So disposal that that's it's opportunities the uses And product our have to be space space in continue will leverage scale consider we the at space are we niche idea, those players they because where hasn't within much economies more happened that smaller opportunities. automotive that today, applied. what material on consolidate focused to within that our that can to and frankly, drive

So you as but just those, forward many from not going us more take that around that advantage Cooper-Standard world consolidate because the under are to in able there more U.S., the the be here of. umbrella many, we'll and will hear we of

our within that some of margin there make would stronger business, business. significantly traditionally terms what than automotive see would with of is I that point second The it in we

also enticing us. to that's So

So about It's this margin just isn't about expansion. cyclicality.

John Murphy

the than product months, sounds are sorry, say industry? months, see we it would they auto They I like in – Jeff, cycles. what shorter also mean, I mean… I'm twelve much how six And

Jeff Edwards

years, One to two John.

probably it’s number. think I the right

John Murphy

very. you thank Great,

Jeff Edwards

Yeah.

Operator

go Roth question comes next ahead. from Matt with Please Koranda Capital Partners. Your

Matt Koranda

morning. Good guys. Hey,

Jeff Edwards

Hey, Matt.

Jon Banas

Hey, Matt.

Matt Koranda

XXXs, in with that prepared Just us I given half to back guide. the remarks, If the your to gets sort higher. incremental obviously of million. of into It you a what operating midpoint sort number much EBITDA looks start $XXX high efficiencies your something referenced implied using the wanted of out like, add it roughly second in you've guys here, in around

break even so can half kind we a could tariffs by you in wondering headwinds back cleaner and get potentially Just if the mix, the out of kind of number. commodity

Jeff Edwards

months then Yeah, be price. We X%. we'll big in earlier, come Jon. will Matt, headwind is first We're little for will continue the this like bit be headwind the year of still just six the running and of the X.X% – a about north still year Jeff and said

us. less you'll of to see impact, when compare So for little bit but significant you an a it still years past

I mentioned the commodity as remarks have well, for headwinds As my us for full doubled prepared year. the in

not going that away us. So for is

So you with will guys. million pressure the $X.X we QX. and in favorable anticipate into time story, another then, since incremental and then last picking that America And some back tailwinds adds North we the of have volume updated mix up QX –

we're broader And seeing the China that for on to QX. in as the that here a we'll just what and we rest of as However, in is European softening also expected bit market well Asia continue of in and the year. saw see that

Matt Koranda

sort of Got helpful. speaking Asia of guys and lot And activity That’s in profile XXXX. there, I just occurring and you highlighted know growth a it. launch growth of the have then

activity outlook for mix with international So your launch way any to about XXXX? Chinese expect sort of material OEMs any maybe that, also versus next changes domestics you could then reason And in of talk that year?

Jeff Edwards

this Yeah, take Matt, Jeff. is I that.

anything in the governments, earlier for have, today. see two to would now. not set been transparent Obviously, way don't in here aside but already talking material a as that change what the on right you had on going XXXX I that saw we've been we about. terms what's very changed of mean, between we talking I I we I nothing growth the and about that obviously, progressing we China think, We’re sit just conversation how yet has

Matt Koranda

the you you highlight the technology gating then items done here? footwear terms further to timing getting adjacent any licensing developments of need that the items developments on potential the it. the that on on you you for what positive sort in get mentioned, And Got are I mentioned there. just updates us front, get mean, near-term the on deal to advanced just in some deal or gate a through positive of items or done the market but materials some could

Jeff Edwards

still on year. something done getting bullish We��re this

– have it Japan. We're we know, – launching we as as quite talked are launching We often. in you about business we speak

have forget going can't on. do we we that that So

done that to discussed one mentioned have we that's And being the expanding our gotten there and into you. we've are by that market. that gotten So the I products industries us now brought that with are partner the across

we are be of if will the we something aside, two we is manufacturing before compounding end that discuss going set work folks my So last think we're cases, for also view from would we're to products be hopeful that talking this to expectation And that Matt. of with And I of the finally consider couple year, us. out. a then have a in – point those

Matt Koranda

it of And the you in was I what authorization looked lastly the you on Or like just out Okay. are in now we but then and essentially the know starting potentially deployment between there should about then? over think how can months? that stock November, guys buyback, coming it do limited and have you

Jon Banas

Yeah, Matt, this Jon. is

So under amount have old authorization. small we the left a

expected but now in And announce we've months. another $XXX new authorization. million a place run couple up we’re existing is that winding an million $XXX for ASR the of did we authorization, previous So to got

do we its incremental, before run let So that anything would course. we one

Matt Koranda

Thanks. queue. in back jump will I guys. Okay,

Jeff Edwards

Okay.

Operator

Tamberrino comes Please question Sachs. go Goldman next from ahead. David with Your

David Tamberrino

top wanted and in to the of performance much just the better. by get morning. an for was how core and much I just more it line understanding pick raise coming updated of guide through of kind the good how organic Great, was rates driven of FX just

Jon Banas

Jon. It’s David. Hey,

did the first the $XX months in of of line tune certainly we have million the and of top year, QX on in to revenue six the favorability So just alone.

to provide a run second will from tailwind rate. QX. a today, rates look I the in they're half year spot a of the compared bit for If the prior the bit down averages that So at

taking at times to should – by of run a expect to it as set as it $XX wouldn't but and X us. I for much get positive million the be to it year, back rate So be the half

David Tamberrino

of in Okay. understand are? back a going just I are current And wanted the what Is there half then on embedded than where just it to bit as today? thoughts the lower we well. what's guide, what's little

Jeff Edwards

Yeah, the that's spot today for point to I guide rates would you. just good and a

David Tamberrino

CapEx believe that increased was And to X.X%. capital going incremental is from X.X% then Okay. What of end I the towards? lower

Jon Banas

again. Jon It’s

So we the that do in work and changing about innovation, in IT investments we back we're have been the way talking as really our making the infrastructure well. just office here

So look what to be that of That and spend, full above XX% X% think I year about at would traditional you going capital of if the be sales. really is base. a we our call under non-core over would

of the that X.X infrastructure. CapEx it's another as growth, as well innovation So in IT ventures investing we’re spend in the new joint over in China

David Tamberrino

Europe mean Okay. [ph] And lastly I WLTP. just then

your it pretty customers? its OEM there July, consumer of of makes of waiting But Or into like China, comes way schedules working seeing I Are looked bit bit could just from is softening days of within August, from last market two months, a pocket. the you way the is not that sense. see some yet of the up back air everyone production to that's shortening kind if any in tracking, and the saw and well September? a it known, be – think kind June a

Jeff Edwards

is Yeah, David, Jeff. this

As there in yes, fair I say mentioned softening some to before, China. I is think that, it’s

in that plants, softer. our a now reflected that about bit I consistent it's it we've of everything think just seeing but with what creep in we're is said. And you this little to talked that's morning, but

David Tamberrino

the you questions. Thank I taking Okay, for it. appreciate

Jeff Edwards

Okay.

Operator

comes question from Chin ahead. with Please go next Glenn Your Research. Buckingham

Glenn Chin

questions. my Thanks gentlemen. taking morning, for Good

quarter. restructuring charters identified guys were? You some share you charges restructuring those reason? the Can where What during

Jon Banas

in – Yeah, million about years throughout this chart, we put place Europe program you'll winds million $X the to broader something $X today, three Glenn. our that the North I down Spread America. the $XXX look about million pretty see later Q in If ago. it globe. in had much but as down

including the company, And $X corporate million. a had the then the few function, of Asia had almost XXs. rest

about collectively, So for $XX adds up million quarter. that the to

Glenn Chin

then Slide second a Okay, for for not half, I just bridge was those? catch actually on that all an the didn't quarter? buckets share of great. clarification what first Can were the your you quarter. the EBITDA XX And the second

Jon Banas

looking appendix The Glenn, had might the be I think the… page page. you appendix at

Jeff Edwards

months. a The was out There of first slide order… six

Jon Banas

Okay, that was…

Glenn Chin

of two I same it’s chart, think. the Yeah,

Jon Banas

Okay, get we will certainly… you

Glenn Chin

you us you second if buckets the can – for can the the share But nevertheless, just what quarter? were give

Jon Banas

you just will Yeah, for second quarter. the I bridge paint the for

million, EBITDA SG&A on $XX year added prior side, the the $X the line while were $XX on And $XX Then this reductions you then items whereas mix to million inflation cost was $XXX million. added rounded And million. general So year. and other profit of minor million And million, negative et about $XXX added was on negative $XX QX overall, gets operating volume efficiencies $X for cetera, the net materials our million. utilities, and million. that wages, FX

Glenn Chin

on Very supplier quantify impact the I good. that Meridian fire, you overall? from then suppose the And don't guys can

Jeff Edwards

all to other I we’re the that think to make about than that's and volume third specific to will specific one made up in mix. the question, good it previous context mentioned trying This that the is the but is that Glenn, customers news quarter. that all talk Jeff. we're up going answer say not about going in about I of be

year, So the us. it's a really for nonissue for

Glenn Chin

it That’s Okay, me. very good, for understood. Thanks.

Jeff Edwards

Glenn. thanks, Okay,

Jon Banas

Glenn. Thanks,

Operator

go Sykes next comes Your Nomura. with from John ahead. Please question

John Sykes

what challenge just a going going not I XXXX, you talking an you Should have? we talk continue? you little little in going about think of price-downs bit about of a ongoing pressure – expect as you're in terms hi. I but to Is late, you're but forward? can know got that Yeah, do to that bit

Jeff Edwards

John, is this Jeff. Yeah,

think XXXX that to When because talked we about tell were would that we programs in terms X.X%. for view, of history we I that you ramping in of justified X% a the ramping X.X% business pursuing, up. with certain just were was, down, we're of dealing programs certain our number were variables

a And so we statistical pricing the didn't you shift, feel for like in if was company. will, this

in the that's how and right we really I that's So now. said year what still feel

John Sykes

balance type your which get up? other will are I question sheet a you a strong. little I is same that less kind guess, all Where leverage, bringing pretty of thing, comfortable, Okay. that, you that have do guess? obviously you I up. the creep is I if assuming Where guess the are you buyback, that of know things do with comfortable other

Jeff Edwards

Yeah, Jeff is John, again. this

think in front X, what our the is say about us, here question. three would don't have anything typically we for for industry, a space, I our In X.X, answer to to that's, of in talk like that your it. we

exists. to we opportunity about diligent multiple We're length those and discussed industry core and have where consolidation sense be still that given make are We within how the it accretive our opportunities very the in certainly It products. they need needs pursue our at cycle. we exists and to

So those go consider we we forward. are before all things that

with got pretty bucket today that is I this our desire about think like to nonautomotive to we this about. we've acquisition. a million it we XX% clear have to $XXX that of mentioned XX% that revenue latest We in get talk ultimately

down to to at least core as ask move come try we'll continue At as make into are forward, same in relates nonautomotive us the for business and But customers that more point fill this to go up. where an our from opportunities, it opportunity have they to more time, make of the the space. we range things hopeful one meantime, M&A so and ahead the view, more we'll that sense plenty of of And and then do a those. sense in

Jon Banas

is this John, And Jon.

years. worked at that on team take ratings is put wouldn't leverage credit for risk. color we improve purposes certainly last of the that whatever Just did more risk has strategic – several incredibly on a to little the our And bit hard over

ratings maintain the forward that there. path we got credit and we've So current would

John Sykes

guess question on was have rating guys I seem kind Yeah, feedback other of when in should stats, credit issue. And like the the in would you at BB agencies the my the of because what's that you be it on that? look leverage – from the been territory level

Jon Banas

get did Moody's. an S&P, we from still one feedback great year, this upgrade but They're below notch of May in Well, overall.

overhang of agencies we to what both a there's deal it bit the with. of think I a sector that comes

So despite we credit profile. good our fight that battle

John Sykes

more. Okay, just one

up more I've about calls the where end that okay? more You perspective. in cycle, a a might more from where a lot are had heard we mentioned and on we there's downturn concern And and trough

out see bit accept, doing what's mean, of Now to little ties about thoughts I I XXXX, obviously that. your the what leverage right. all a it think to but further? you of for looking you're XXXX, kind you're level guys are And starting together willing with that

in will a period? steady you just the downturn industry you that for think of see things thinking, Or do XXXX? be globally I'm do So entering kind

Jeff Edwards

Jeff. John, this is

agree, this of and growth America, I you by When while you and still when to SUV people the think an go look there's that And the top north are continues that most of about within I to North North segment. the point to within projections, China, they're at industry at you but volumes and out, flattening probably around grow number would America have you of think may think a the the most X% we growing within there look line from mix CUVs view talked times. SUVs particular CUV mix, somewhere X%. when

So little anyway, I growth couple business, of are the some our a SUVs, next Cooper-Standard each markets of our projections we're probably course where mentioned bit play, the just as first the CUVs mix of actually that the than out years. different positive target with trucks, the over within

is units but units company. the So mix million the our important XXX it units million for isn't or those world, XXX just it pretty around XXX to units, going of million or be

John Sykes

That's a that it’s what yes. mix content if to shift, continues – – it's right. matter favorable content you perspective. No to Yeah, I'm assuming that's content, happens, maybe from what your

Jeff Edwards

good. That’s

John Sykes

Thank that. I Okay, appreciate you.

Jeff Edwards

Okay.

Jon Banas

right, thanks, All John.

Operator

go Matt Your question from Roth Partners. ahead. with next Please Capital comes Koranda

Matt Koranda

guys. Hey,

your quick monetization update a to there. Any mentioned guys? the had products at I some activities noncore you automotive Investor follow-up. wanted know update on for you of I just Just Day, but get

Jeff Edwards

we're fix one or forward we're two terms, That's clear in number to number about where the general that to Matt. we be us, morning, pretty not, as business. we're talk in for strategy going this and nothing go I this we’re mean, we morning. have on which And that related prepared probably the to a right side, But about for then question. will share what is of quarter color us now is can terms talked we the that and little we most next that. focus Yeah, inorganic more still need nonautomotive But real that to organic automotive our core we've in

Matt Koranda

that. Thanks. Okay, appreciate I

Jeff Edwards

Okay.

Operator

It now more appears no I back there like to turn the Hendriksen. are Roger call to would over questions.

Roger Hendriksen

continuing Cooper-Standard, your and today to forward This we to appreciate Christy. for in call the and like you we’d you you. thank look participation concludes we your Once Okay, our Thank with thanks, in again, future. interest again all connecting near today.

Operator

call. conference today’s concludes This

disconnect. You now may

Cooper-Standard (CPS) 1 Aug 182018 Q2 Earnings call transcript