CPS - Earnings call transcript Q2 2022 | Cooper-Standard Holdings Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Cooper-Standard Second Quarter 2022 Earnings Conference Call.

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

Following the company's 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 on the Cooper-Standard website for replay later today. I would now like to turn the call over to Roger Hendriksen, Director of Investor Relations.

Roger Hendriksen

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

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

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

on company's For ask with you the GAAP presentation. comparable in to information measures. Commission. we more forward-looking this included of appendix are financial that to measures the non-GAAP Exchange filings Reconciliations refer measures statements, their of This the X most presentation periodic contains financial in presentation the and directly to statements Slide Securities and also the included non-GAAP

out So, over Jeff Edwards. call with way, those the formalities I'll turn to of the

Jeffrey Edwards

Good second morning, We Roger. the outlook opportunity year-to-date or in Slide business the To an on going how appreciate provide quarter. X, and forward. and some of operations begin and our our quarter Thanks, key highlights provide second update performed on review our everyone. we to indicators results

for levels world-class quality continued to scorecards products employees to and were services customers delivering We execute green. and At end product in of of customer's XX% our quality the our safe. our keeping the quarter,

ultimate record and for target XX to importantly, Through for incident Well leadership, the specifically of zero X.XX. Our safety our second launch safety is hours Most incidents just our our the our I year. of goal the months green be that possible. of were a recognize Cooper-Standard reported considered what their was is safety perfect X.XX quarter. and continues demonstrate of the quarter, and they commitment, XX% scorecard rate to our In thank would that world-class continue for below of incidents first-six worked. outstanding. outperforming performance has at also rate zero performance the XXX,XXX like the maintained plants plants achieving of teams to focus, total

and tight Our overcome availability. production a improving market the were of extremely difficult Despite hard manufacturing operations lean erratic market worked $XX environment, through schedules the have and including to challenges, number in labor initiatives in continued able in million our operations a smart efficiencies quarter. deliver savings to operating

In volume Our $X SGA&E cost actions fixed year-over-year benefits $X down expense was see restructuring we in June, of recovery overall offsetting the improvements month initiatives. production our improved and quarter. quarter, with benefits last to to we million In million continue delivered and right-size cash from drive net past, as started positive efficiency flow in the our April enabled to in May. increased in cost. disappointing in cost, improved fixed the our results in lower pricing us mix, margin operating volume, EBITDA partially and Combined the and

Moving to X. Slide

business prices During efforts costs market factors control. and beyond are rising the to that incremental other by we our recover imposed our on commodity our continued quarter,

with impact The a or to different agreements index-based now have costs are they to index-based index-based critical as material been of commodity as having form either each implement continue some on our as costs, have been revenue already outcomes significant and agreements our We covering have customer, adjustment discussions commodities, on well metals price base. rise. the majority While positive customers. most as agreements oil-based results cover a of we with other able

periodic quarterly agreements. the should significantly surcharges magnitude of our versus in commodity on agreements reduce or index-based customers cases price business negotiations other our where impacts these the In prefer Importantly, future.

our historical will price and adjustments. recoveries exceed our other end payments, material We savings, In quick increases, total, range. have of LTAs, cost implemented PO delayed negotiated the reduced high

new that has commercial they've and it compromise achieve been a great a to our able to way relationships ability done positive do not Our in in very results team new awards none the our Also, environment, happened tough in does of received these This engineering and job net the customer a would our without it or business win evidenced execution. operating quarter. second solid by we business. to have frankly was performance world-class

Cooper-Standard to trust Our us support customers they because deliver.

ongoing to for environment, business continue thank their very customers As engagement challenging for we mutually a in business our process relationships. beneficial want work their to together commitment I to this in

Product energy Turning the granted since to of in fourth XXXX. with our Fortrex was by a award it This X. Top of marks recent recognition the Fortrex, commercialized Slide XXXX. as and We're innovative prestigious platform environment pleased chemistry to

industry. Fortrex available sealing within material is sustainable the automotive the most

provides significantly it higher friendly is and performance options. sealing with that lower traditional than lighter-weight environmentally carbon As material footprint

of In customers. which our with Fortrex performing, continuing higher are characteristics potentially lighter-weight, make addition, valued we develop to are all and material, material highly science feedstock use the even around it recycled post-consumer as to waste to

part provide among Our value proposition forward. to the differentiator additional developments Fortrex sealing competition. believe in around clear create will opportunities customers going business innovations market a are our our new we of We the our in

Slide to X. Moving

advancements multiple We significant our to EV grow EV connect and portfolios. will fluid allow our to the which customers These products innovations tubing complexity And optimize within content given further fluid with to soon EV handling. for making combined in ensure opportunities hope OEM space. fluid also per unlock reduced with performance vehicle range. vehicle new and We've expand exciting existing in strides and capabilities increased flow architectures, are advancements control, the in margins and to light-weight our share market leadership new we commercialized quick

of to call discuss the quarter. Jon over Now the the I'll financial to turn details

Jonathan Banas

quarter year. few second I'll of the the cash a of the and to XX, morning, everyone. and good balance flows, some our details our financial In last sheet. next Slide XXXX summary aspects the results on our slides, Jeff, liquidity, quarter Thanks, provide we for our On and comparisons with period discuss results of same for show

Gross $XXX.X second and favorable global driven other quarter North quarter a inflationary last in in sales. and production, Europe. a second the increase $XX.X of $XX.X mix, $XXX,XXX versus compared basis, profit U.S. in efficiencies, for of to the the sale-leaseback continuing primarily an gross million net of of outpaced EBITDA XXXX. recoveries. Second America Adjusted headwinds pressures. growth cost in the negative by a of quarter compared XX.X% and of of our was and million loss were manufacturing of the recoveries vehicle million offset or loss by quarter in million, material year. GAAP and sales The X.X% quarter property On million to quarter second improvement quarter by second commodity of performance primarily included compares positive XXXX. million loss commodity Net This was the $XX.X to was The light volume this driven year-over-year in in for outsized the second loss XXXX. for quarter growth non-core cost year-over-year a adjusted gain million year the a was of second to quarter negative $XX.X sales of related significantly XXXX $XX.X EBITDA net in $XX.X partially the

other The income loss realized diluted of the per share tax loss $X.XX adjusted in XXXX. booked change $X the adjusted second special and of tax the EBITDA. gain, second was to adjusted million net second quarter as of quarter income $XX.X diluted tax increase million quarter essentially the the in net compared an their offset for per items, of adjusted $XX.X impact, this net tax improvement in versus XXXX restructuring Excluding well from we XXXX. we or expenses share loss the provision expense as book The associated in modest resulted the quarter for in benefit in or

on quarter are have million in capital CapEx to track in full second we the last compared same totaled capital X% year continue the the sales million a disciplined $XX can year investments expenditures and we a committed of for keep to as ago. quarter. $XX on below Our period We to focus

some Slide results. XX of impacting The charts on the to factors our Slide insight and XX. Moving key quantification provide additional

and net customer in volume XXXX. also volume the customer mix quarter in line of price million category. top sales quarter recoveries the favorable volume Improving biggest the by with increased the On of customer included $XXX was mix, versus second cost the driver adjustments production

the Euro by $XX exchange, reduced mainly sales versus Foreign million year. last the period same

quarter, of costs million. the price and SGA&E general and and mix Commodity and EBITDA, and drove American totaling to efficiency $XX $X combined ramp manufacturing savings all reductions cost while further higher were $XX million spread combined improvement net of second more volume million remainder wages, the for positives a restructuring the EBITDA up primarily quarter, by in items in increase inflation million. compensation-related added $XX but the the inflationary was more contributed proportionally to continued the were year. adjustments actions and offset material we than somewhat of mix Lean in adjusted a quarter North volume For these over from $XX regions. recoveries while slow higher expect rate Unfortunately, The favorable to Europe, the past pressures other costs, first million in quarter. initiatives of across in --

the as material see the to recovery Jeff headwinds. expect commercial offsets implemented, we addition, increasing that In agreements to are inflation mentioned

Slide Moving to XX.

volume, versus the last half operating unfavorable were at measures year of first of impacts exchange. first for joint same half quarter improvements Asian and deconsolidation the an foreign in price the the last Sales mostly mix being of and and adjustments net offset year. key with Looking drivers the better of slightly the by venture

manufacturing and efficiencies, offset lower material improvements from costs, adjustments, restructuring increased For inflation other EBITDA, and general more significant volume adjusted purchasing were and net wages SGA&E and items. by mix, price and positive than savings

Slide to Turning XX.

during free All cash the the the at the by inflow was driven and quarter. by months flows, a second quarter. from cash loss in million, received tax essentially million, the contribution lesser of June provided of refunds we offset positive lower XXXX cash With the the by approximately inventories. of cash were terms an partially $XX $XX XX, for flow million in operations $XX approximately of primarily breakeven ended to CapEx incurred extent, In quarter three

of from result, ended profitable resulting on million, remains We operations, to improvement very quarter. execute our to We a to strategic drive end in with remain of a increased a As perspective. launch term. $XXX than sufficient $XXX June total XX, million. margins in credit of believe good shape Availability balance a to cash we million the programs undrawn XXXX, planned the from improve $XXX more we revolving June and liquidity which sequential longer new the over of have growth, first sustain facility, resources solid liquidity as still initiatives our

term near production next and increasing and generate commercial improved our and agreements us flow allow the improvements also anticipated to enhanced expect We vehicle relatively the cash years. over volumes few in will

In that portion of Sachs to our our sheet, we terms the that month balance hired refinancing we announced assist of process Financial debt us a and last Advisor of our process Goldman ongoing. is as in

We get allow us actions will improve performance are investors and believe we we in the discussions refinancing with and our have financial to liquidity taken maintain certain to the done.

we details time. concludes can't prepared this that, at further That provide Beyond comments. any my

So to back over turn Jeff. me it let

Jeffrey Edwards

Thanks, Jon. outlook And full touch our you efforts will to our structure update for I wrap on to on morning, cost up further improve this and then our ongoing the year. discussion

made past turn more cost clearly to We than our and in inflationary offset reduced do reduction work year volumes savings the to optimize and production structure, as $XXX journey our three our more million per have continued customer cost in please pressures achievements. driving outpace over our have to unprecedented right-size some XX.We've and substantial years. Slide operations So to progress

on projects have outlined in and implementing rightsizing We to further initiatives some a in as XXXX. reduction we cost the the begun critical complete expect number of of slide

In portfolio. real evaluate continue addition, to our we estate

the or opportunities of further to we sale leaseback help could sales planned will actions provide which have Some optimization initiatives. strategic fund asset our identified for

higher. and efficiencies our through move manufacturing and will we of the commercial of driving inflation begin cost in half back combine enhanced slow to XXXX, we rate XXXX approach As margins agreements reductions to expect the

XX. Slide to Turning

In reaffirming results. to the be cost we the upper of million end volumes range our We improving of and in planned. material was in CapEx income estimate EBITDA our the on volumes coming trimmed second lower our of leverage guidance, slightly we are the first based range the for just for There tax trimmed adjusted in estimate and half half offset in our for XXXX raised We've also full based terms first second of $XX production million half better year to operating year. across sales than our recoveries expected production than the $XX benefits as some efficiencies expectation on for realized half.

in optimistic our of industry, future still While the opportunities uncertainty and very ahead. in that a I'm lot our the there global lie is economy, about

significantly Our improving. is cost still and has improved structure

are operations they commitments customers we manufacturing ever inflation challenges. help Our to as in running place have now from and continuing as us have our efficiently address

for also our and stepped many, value This and for few to proud team's we are as a EBITDA support as work commitments and our said next thank our achieve together facilities, cost now the and China's progress dedication. delivered at plant that prepared volumes some all continued employees actually our shutdowns, strategic targets stakeholders. year. industry could the commitment few want back streamlined structure our of of confidence production long-term I to their continued return headquarters to and quarters we recent home ago, want our with first remarkable sleeping not their From focus design sustainable trust, and our normalize our to employees collaboration, over remarks. intensified in more during margin I As of create many how them locations the they've floor our customers the engineering solutions of and years. some with to for their drive the half offices, be fair again to thank toward and I capital of for literally and invested newly believe to their offices. our pay I track adjusted concludes our I up materials, share goals on on customer

for Q&A. So let's call up the open

Operator

with Thank Instructions] Your Mike Ward you. question from [Operator first comes Benchmark.

You may begin.

Mike Ward

Thanks. you of everyone. Fortrex? I on wonder can an the efforts, some specifically Good Jeff, morning, if give with us non-automotive update

Jeffrey Edwards

Hi. for Good question. morning, Mike. Thanks the

able we of will discussed We slated the quarter we progress before, after announce continue at And the this first itself as product where good for aren't who launch first to make but to that's, product the with very launches. 'XX. we time,

automotive we mentioned more customer particular make things addition, footwear it frankly that attractive the the in and next-generation moving space. is for that forward customers Fortrex our very for and In attractive making it also more attractive

So of excited had the their about a successful manufacturing how we couple quarter. had facilities launch the we've of in people passed expect We've that We've very for they the hurdles during first executed. over and months. we're all last us

Mike Ward

I That's don't new that. information. remember hearing

be will launched product the So XQ 'XX?

Jeffrey Edwards

That's correct.

Mike Ward

Thank you.

next, on exceeding. you're savings six-month achieved. measures those thing cost them. talked some about inflationary of annualized inflationary them start how to your see can in but we The does see Jon in XX, about second look other Are $XXX pressures are over of XX you offsetting mentioned some two-thirds will It and And in these transitory that that like category Slide subside numbers, million we of that the other like the it looks six like and the say, costs, to months? looks

Jeffrey Edwards

covering to customers just in go space Yeah. automotive out But with forward negotiate these forward. have our of to revenue clear, There revenue, with company's talk about that's in terms prepared about resulted has in quarterly Jon I the in mentioned going payments substantial that covered I'll be XX% we that agreements. index-based additional the a portion my set of is surcharge the remarks. let with what of

these with well recovering historically to to look costs. at So raw take a inflationary that in recovered other approach new XX%, and XX% we've the as as agreements material if total you index our

year are also [Technical in material the negotiate into into some new We XX% recovery particular being our under Difficulty] able from only inflation obvious this we the to reasons, with of as halfway on here get have approach. quarter. through we are basis. we for the pleased brought to very range we've that specific by We of last not that the covered accomplished the XX% this for were a raw importantly impact what more sit details go-forward first year but will customer half,

Mike Ward

Okay.

Jeffrey Edwards

other part Jon to address to your mic Mike. the question, over hand the I’ll of

Mike Ward

Thanks, Jeff. Okay.

Jonathan Banas

have Mike, that We as of that wages, such away. headwinds the rates, of that see don't being areas they're fairly in bucket, or those is sticky. pieces. cost and sticky if inflationary biggest And term. use of energy going you will transportation charges if subside any most asked And other you labor kind to essentially that

gone the year original year's we That's when a to into guidance. on gave or six thought time fact, guidance at would we up from months and we came incur about year had call In $XX last bit. walk million our we ago, the bridge it to this so, that

when course, then haven't things back as they gas sticky utility elements. up high have most are being are, As of a probably there. charges natural of a come the wages staying seeing And as or you the headwind down, other are bit bigger we there, those it's

don't soon. I ongoing team you those focused go pointed to So, manufacturing And cost reduction on efficiencies the and our is continued out, as efforts the those purchasing offsetting will both anytime away them see on now typically going be side. so towards and

Mike Ward

can some those try and -- But from Like transportation, can vehicle those talking the recover you right. to recovered, that some the manufacturers. Is can be the of what energy about? you're costs of

Jeffrey Edwards

is That's This correct, Mike. Jeff.

if the in discussions are those of as the and be vast those expect speak. recoverable recoveries, of we certainly negotiating the energy we're We in not majority, to cost XXX% we process

Mike Ward

Okay.

So just from a cadence standpoint.

that Is steady bit that XX%, in with of The some suppliers seems quarter, a get correctly? industry, the get dose good your exposure. reading standard kind it's caught So, up it going right. beyond and is in like of then you're -- But that, contracts? you we're sounds the even going -- half, maybe little to am it fourth I XX%, state we're in it recoveries get to once a second have like pretty a more most the

Jeffrey Edwards

correct. That's

range if historically. us XX% recovered we past even of we've years. that XX% that, that look But And the closer course think use you at of pandemic then the the it a means over to of I XX period the range probably into that low and of now before were high the the during and we're time be range. the end at to above going end of for pandemic, we that

our good sets forward. this approach fair but very business think is also not we going a for today, So, up only for customers

as that done been the plants So, of we're important that with get year, the we next the we've and in pleased business following year. and book business year to our operating have this able current equally very what on will launch today,

Mike Ward

Thank much, very you That's you. Thank everyone. great.

Jeffrey Edwards

Okay, Mike.

Operator

with comes next question Your from Steve Ferazani Sidoti.

You may go ahead. please

Steve Ferazani

detail morning, the for Good call. everyone. all Thanks on the

Just the digging you thinking into obviously now half? into in guidance though terms material even what's additional to and about FX that recovery. EBITDA materials, second about a guidance, have in of little XX% you XX% FX and more to trying bit both I'm just materials headwinds get of built the think then covered

Jonathan Banas

Clearly Yeah. when at now Steve, to U.S. address is with Euro dollar. I'll the question. the FX try almost the parity

down. do Our revenues come

past. currencies in little are than our you when local currency. lot costs the think Euro, other nuanced base top So impact volumes, about denominated selling world, cost a lower in also reset otherwise the sales Europe part whereby first amount Euro but the around of more at namely guidance FX our in a will as from the that the translating would have half It's on our is the Jeff see line bit which mentioned, a you the the was of than they

overall. do effects the have line top that So some you decrease cross-currency mitigate

down, Koruna, local that revenue of might you're deal do come Czech other with currencies the locally. as well down when we zloty so or come cost the as Polish So thinking

talking the been recoveries inflationary inflation, in things well it's are $XX second be already Jeff the those we will by for see or first incurred as the has already that by and don't EBITDA year the stronger other about the half higher component year half commodity year we we've as the volumes half this describing of of year the million rather second exacerbating as that in than a buckets believe. further incremental more half first the of all But ongoing big commercial offset of second then So, than an we've the been half the the pressures.

Steve Ferazani

commercial much really given the With second new the implemented in the recovery front, agreements the ones? stronger half second that's that half

Jeffrey Edwards

This is Jeff.

out. spread it's So,

Steve Ferazani

Okay.

Jeffrey Edwards

the are some to was I increasing started the recovery some them obviously of fourth. second result a and quarter, back of already. mentioned, in in third In as had year. price we that last Keep Some retro mind, the also impacting quarter

kicking So, third in of what and is in. direct agreements you'll the in the a see quarter result fourth the indexing

Steve Ferazani

Okay. Fair enough.

Jeffrey Edwards

And be it question, was answer in it clear. be just in half, half stronger your to than the the first second so to will

Steve Ferazani

your that demand flow. up cash to Clearly when working about guidance is in play half, you're create Perfect. inventory to the in past. certainly second don't When that think not such high translate working We've begin significant capital so picking going should capital, greater volumes I discussed how it this with. into you Does the out but carrying have on pressure?

Jonathan Banas

Steve, see procuring QX. in right Normally a you're sales half in actually for you on But manufacturing benefit year that we QX us be not a much million as second sitting over because for inventory a $XXX the are of usage. of will June capital now environment, working would of we as the into absolutely right. as are rising

rising as on accounts receivable sales a the lever us put offset with the is shipments. to the more that you for So as sheet balance

be in shape should good So there.

Steve Ferazani

the reaction response you for customers you customer coming to but What want this? about, think something I there to figure the was be will it given potential that the keep you on -- ask they driven? green higher expect trying and to that believe if that tell production. I'm mentioned was developed, just to position, do introduce about materials, had on I recycled trying their whether Great. Fortrex green have positive. is it be hence to customer you was some And you could what out I'm cost,

Jeffrey Edwards

Yeah. This is Jeff.

go and in that outside partner with ready to to the we market We quarter. getting the an developed have are with in third it of process

mind, Fortrex product. they're in priced was our I a for about, today that keep These market. we're a on in too much probably talking anticipate significant make affordable we attractive It's a just that not only more in to deemed terrific areas even the and enhancements suppose. was product it before going premium So of SUVs more premium reaction customers

[Multiple So we're Speakers] really

Steve Ferazani

actually you this Do think, reduce does cost, you're this what is saying?

Jeffrey Edwards

That's correct.

Steve Ferazani

me Fantastic. Thanks so guys. much. Perfect, from it that's

Jeffrey Edwards

Steve. Thanks,

Operator

DiRubbio comes go Your Please next Baird. from ahead. with Brian question

Brian DiRubbio

Good Few me. morning, gentlemen. questions from

First, Jon, could frame sort what you your is in repositioning conducting estate of these up with sale-leasebacks? sort opportunity of real and potential the

Jonathan Banas

Brian. size qualitatively Yeah, Good proceeds. thanks We talked really it the the describe haven't of question. the about and sizable morning as for be opportunity I'll a there, but could it

we're in proceeds saw first consider Europe and it You year, to of million half site transaction. to almost the or of this in with amount sale-leaseback $XX of able capital non-strategic that unlock related a U.S. call

So is doing are around is our opportunity that portfolio solid would what market operating and long-term we're what things Cooper-Standard's have our strategically for plan sites in portfolio assessing there. we're for long-term that us fit the looking the and in a

an done. number, millions call I'm would similar of of nature it it, sizable what in could exact not XXs already and you we've to dollars. I but So going give to be

Brian DiRubbio

And to said the respect you that. reticent anything you're Okay. to, That's refinery helpful. about I Jon, mention

the place prior in Just is maybe term company's loan have current becomes November? plan to the it something quickly before still

Jonathan Banas

you. stick I've Brian, question, Yeah. and thanks already what the just with told I'll for

Brian DiRubbio

crisis of to businesses? there. before are on just get and allocation natural operations there your gears, what gas switching the is contingencies consumers an a European X understood of for sort if Okay, Jeff, Phase we

Jeffrey Edwards

Brian. Yeah,

as low we can need as plants flex So our obviously we to.

positively that's that we if the I have the that fourth volume So outlook we in seen second half I more tell fact in question, the your you outlook the in think in haven't quarter, and like Europe in years. can

view positive in I us. for half a Europe So, have the second of

Third is quarter strong. events is planning Right two outside be If, obviously support even first the we then always sense. quarters. a now, volume including what August we of industry the point additional the flex control and that we're anyone's be now, quarter in in down of if ramping very in Fourth that automotive shutdown, would. we've to is but that obviously ability occur are the to cost positive to to up comparable can I view from the seen have

Brian DiRubbio

be not I'm trying And it. to Got negative. extremely

Just lot there could a is that zero it's of greater investors' so that minds. question, a chance a occur, than

Jeff, Europe. about we've on Just talked before. this

You that business out over I your years. What Cooper U.S. sort business business? said, given And the for of is is tied to then? business of and if completely is in returns guess, So if impacted business away from much proper the from European the but Europe? walked your away how the of to would be hypothetical, How of returns ability much of this walked U.S. you you Europe. the Europe get

Jeffrey Edwards

the take first half of the question. I'll

initiatives XXXX we to profitable be executed in have have Europe by we in will So, XXXX the we of and several that when left execute.

point We be expect that of EBITDA an from business to in the high-single view. digits

in in we expect completed months on the And XX focused forward. very going getting here a be a to big more next that few Europe or we're actions so. then So, contributor

be that and don't make to end have As of they they the markets, strategy. think markets and I proven it of absolutely to second with out can they question, if if they you customers I, I agree relates your half money can and be that

Brian DiRubbio

one. the how The Got that charge, got quarter of benefit that? from final second And was you the it. big in just XXXXraw the recovery material

Jonathan Banas

I'm you that say Can can sorry. again? ask,

Brian DiRubbio

second of some material one-time from You got a period, mentioned that sort increases, recovery said a the raw earlier of quarter XXXX. the -- recovery of you in you had you

boost big to quantify results. Could how you boost was? was that obviously a So the that

Jonathan Banas

Yeah.

it. as that of I as information from impact in reasons. We high there relates it down specifics a There's level help those gotten to Brian it that keeping of will will for who for kind mean inside into good breaking customer giving have lot we and haven't obvious the you the really negotiations, detail the obvious we're of forward. going reasons. that of But what and recovered and think you quantify formulas I

Brian DiRubbio

Appreciate Thank the time. enough. Fair you.

Jeffrey Edwards

bye. Okay,

Jonathan Banas

Thanks, Brian.

Operator

question next ahead. go with Capital. Imperial comes from Ludtke Your Kirk Please

Kirk Ludtke

Thank for Hello, you guys. the...

Jeffrey Edwards

Kirk. morning, Good

Kirk Ludtke

presentation. helpful. the for the call you Thank It's very and

Europe how bridge profitable maybe be Could look? Just you a would get a in and there couple you Could chunks a of on would elaborate how that -- big development. follow-ups.

Jeffrey Edwards

Yeah.

given you me think we've let I repeat some there just but insight it.

profitable. in do in plants it obviously the on SGA&E, have price customer reductions we of coming that was to initiatives increases have map. self-help reducing a business as our So, terms Europe reductions there, lot continued to fixed many of not on relates cost to come

Going earlier point the forward, to here clearing for XX 'XX of said to next the there 'XX. a hurdle that about in will and months required to to be all back of I that in months making XX more get rates money

So news to to is what the we in XX get the good balls in need have don't we have Europe. done done air

We levers very and to know few in it. are we're have select process the executing and we what of pull yet a those

Kirk Ludtke

helpful, very encouraging. That's

mentioned or of one, those of to what and You to changed coming it now sale-leasebacks. the it allows Is in they've the realize has it is -- the time for just make just, they've that a of fruition is dollars both? been you now deals little that from XXs in long a bit millions last works like happen or works been

Jonathan Banas

really QX, the come describing the alternative QX Jon. around look to of marketing Sorry. sources Kirk, early We started take that late We year. it's QX we fund you. to of Jeff in really to one year for really closed initiatives to that that or of property last And in was this strategic just fruition. just capital started long to didn't

time, months’ four able three, deal lock up. within we're so that to And

So, just looking for really this initiative, opportunities. creative long-tailed it's isn't a

Kirk Ludtke

full-year inflation, headwinds quick you. And ones, That's that? it's mentioned expectation year-to-date. a then million been helpful. You Thank I is other the What the $XX think on two

Jonathan Banas

$XX the recurring -- is only I'll million includes call the that broad inflation. what bucket not For a

wages, utility inflation call normalized up, but is bills of like also compensation-related going salary a and I'll that significant what typical portion your expenses. So, the

think year last zero has you towards If years, in guidance incentive about what looking for by normative several -- the and there under we're programs. company is been full-year payout the a compensation compensation-related those the paid this

well. joint of several a And So you global bit invested environment, industry we're as with in then headwind a do ventures. the clearly have there year-over-year

industry the as joint those and those us. typically also So that the goes year-to-date, within investments million goes $XX so for performance you operational have ventures of so

So about within basis, normalized their the on $XX that's another million. economics full-year expenses components a say in wages overall. I'd the Discreetly, Kirk, is those all million in general comp $XX whereas are included

with. So model there kind of of pieces gives that lot the to you a

Kirk Ludtke

So, for the at least year? million full $XX

Jonathan Banas

Yes.

Kirk Ludtke

then And in here pieces in will lot what be them sure, of source moving will be think but do used second half? lastly, I'm or it. a you Got a working the capital --

Jeffrey Edwards

will commercial benefit really each a and I've capital flows minutes well. the up capital year tying that us customers, back of working to In behalf we've to definitely the sales build addressed few capital those of mostly extent the it's that to no Steve $XXX tools. way in curve on payments this customers. And those this the year building instead Cooper Yeah. receivable as really of for be to as sit continue may bank But the million tooling we up the in of our get in with historical but locked were payments or cash We our bring inventory latter that longer of balances rise performance half well we undertaking, is, or are as accounts ago that of been course, we reductions of in with get trying conjunction in down. half our really progressive efforts, the efforts tools working year. with looking see so looking as optimize cash frame upfront reference EBITDA along improved the to also

working much time. so up capital a at locking not we're So

and we lever see can the in capital we'll sequentially, benefiting how continue a in But of or experience our typical typically with us see different the working And that's going positive cash second moving pieces, QX, shakes out. wouldn't another that's those year. -- the we were I year. anything experience So strong say, flow to always half seasonality should to we this you expect

Kirk Ludtke

have. very you, that's all encouraging. That's Thank I

Jeffrey Edwards

Kirk. Thanks,

Operator

ahead. Cantor Your next Farricielli comes from question Joseph with Please Fitzgerald. go

Joseph Farricielli

Good morning.

that? Sorry recovery if you P&L, book were this, missed on I period the prior cost did the

Jonathan Banas

We that price We is in revenue a took the recovery you Jon. element the include because will. customer it's Joe, line. if up

Joseph Farricielli

was that of a recovery this already not think, you? giving I did magnitude you're And was Okay. asked what or

Jonathan Banas

the historical the range. of We about did Jeff, going We're end a at high reference. to give being our not you talked give magnitude.

XX% and recoveries be XX% should that forward, Going commodity on that between side.

Joseph Farricielli

discussed your where to well? is, a you in global Good And before. enough. a easily or cash, as we've Are of timely access is last on cost-effective able then Okay. this I question think your it all basis, cash manner

Jonathan Banas

necessary efficiently cash efficient Very cash Yeah. arrangements geographies to regions we keep operations. the requisite as move needed for the us just ongoing if fund world But do world. each certain We around the fund to. around we can balances in to very of

that locked restrictions $XXX on closed that so or June up we no million with. So,

Joseph Farricielli

the much taking Thank you for Great. very Okay. questions.

Jonathan Banas

Thanks.

Operator

final Alex go with Graf ahead. Please from Our comes question Cowen.

Alexander Graf

you. Thank

again follow-up wanted Just working to capital on the item.

production inventories. appropriate around going and of carrying? as given of mentioned, specific company What high the an level do inventory you forward, volatility level see of the OEM is you especially currently inventory Just kind

Jeffrey Edwards

engineered out It’s inventory stop-start manufacturing to thinking day pointed the forward. plants already volatility, teams you've what going level had -- to you balance around coming should our number several down to work why Yeah. of And to great $XXX as is last At million question that team the and about of excess The $XXX it in you our of and years, be of the the on see over every that challenge world is year-ends inventory. deal million that see that's coming $XXX with. the million sheet June.

really but XXXX that be by stabilize, production from and ability stable on And own in their schedules time situationally they're that ballpark. dependent a pulling their and us. customers And is things so, release the normalize goal their to to closes schedule back that get and to the is

helps. that hopefully, So,

Alexander Graf

Thank a here, the Definitely. to terms material then like two again, was just myself timeframe can remind very that's you the say of lag wanted the in or for And of that? typical three much. -- cost you Very kind lag for the helpful. recovery quarter I to what

Jonathan Banas

Yeah. depends commodities. Alex, particular It the Jon, on again. it's

months lag, on a a touch Some inputs longer. one have or be quarter out of the six others might we

call pressures time don't is, in forward the the a of all inputs rubbers, prices see will our of at and their is for back board What really tell do we terms you to across and it of that. So, quarter I forward buys look certain are are or two a in metals, across plastics so The us. of is down things specialty the board for anytime seeing it increase soon. like the rate buckets, inflationary we stabilizing. But coming locking rate

on the still face rest So, of material we're year million $XXX the track in XXXX. of economics to about

Alexander Graf

come in Got safe assume also to that is the the broader that in it saw down the it. indices? pricing a And getting commodity obviously your Is nature bit call to that if variable indices with you're concert presumably that benchmark the on will the starts down. contract come we overall a products pricing

Jonathan Banas

Generally, under not effect six arrangements yes. impact there It's back you prices lag but index price is reset the there that and we prices selling months customers, But our previous to have a a there look that or again current various well. current quarter that as is accordingly. to mechanism

is there lag buying, the lag is a recoveries. a we're catch-up So, on there what on and

Alexander Graf

me. it clarifying Understood, That's very for questions. helpful. the for all Thank you

Jonathan Banas

Alex. Thanks,

Operator

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

Roger Hendriksen

the engaging Okay. appreciate questions. today. for Thanks joining We conversation everybody our call

like reach to feel Thank again questions, If directly, further look forward would of you. to you'd get me you those. all to to Please free soon. out talking have to I

Operator

This conference concludes today's call.

disconnect. now may You

Cooper-Standard (CPS) 6 Aug 222022 Q2 Earnings call transcript