CPS - Earnings call 4 2023 | Cooper-Standard Holdings Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Cooper-Standard Fourth Quarter and Full Year 2023 Earnings Conference Call. [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

Thanks, Laura, and good morning, everyone. We appreciate your continued interest in Cooper-Standard, and thank you for taking the time to participate in our call this morning. Jon leadership call will Edwards, remind this Chief Officer; our you speaking Chairman you of President Executive the Vice contains on morning and that members this team Financial forward-looking be who with and and presentation The Chief Executive statements. Officer. To Banas, are Jeff

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

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

call way to the [indiscernible] Edwards. turn now the over I'll Jeff

Jeffrey Edwards

opportunity and to provide believe to Thanks, appreciate To of XX% of more deliver We launch key company Roger, ever employee product our reflective the and XXXX, like program values. year XXXX Slide our excellence had quality, in our quality terms core on results begin points in that green and we world-class continued scorecards data commitment we XX% scorecards. Even terms launches service green review safety. some are In good our XXXX is beyond. on quarter our operational for by This in reflected to X, morning, and and an results strong outlook for and program product of importantly, best year I'd our to customers. highlight fourth our update we everyone. full

XXX,XXX of long-term just surpassing our safety rate The plants goal We're was hours benchmark especially previous well dedicated of world-class to for below affirm year a X teams the our XX record safety best with that X.XX. full continue incidents achievable. safety X.XX XXXX, perfect the and that is XXXX worked, plants proud these our in For completed of of the our incident year X reportable per incidents.

thank in industry of and We growth outpacing sales pricing. Overall, XX%, revenue by I significantly the want as sustainable and successful also increased our delivered products through program we our they our team strong fair achievements the production. for their for to new provide. total commercial customers closely a year implementation launches with we ensure during XXXX of worked to value receive combination services

solid we line in In addition another improving had the to top year growth, efficiencies. operating

increased year. through deliver the XXX offset Our than lean gross basis headwinds $XX manufacturing programs defined to able were savings and points for deliver and in enhanced inflation continuing cost million agreements, initiatives. with and teams margin our more purchasing in to improvement combined commercial Combining operating we of over efficiencies

for in continuing the is And at over segments. expansion for margin to we of do. the first Importantly, our level We've EBITDA more we recognize year. time, segments a years, progress have all lot the all made X but of work X past the full operating profitable were the

XXXX in of for further to the stakeholders drive all to expect We successes of build our XXXX. on value

are. This company our Complementing important honesty, X. an we component excellence culture. focus is doing core right way It's the to values Page manufacturing our efficiency to who and our with is Turning and commitment customer transparency service business integrity. of our X overall on uncompromised of is

every from external as once factor quality in talent how Newsweek's our be America's recruiting Several service, pleased again type of and we customers of named culture with our an We acknowledgment And in the culture retaining it's world-class list and the we conduct retaining recognition customer responsible our to to an companies. industry. believe technology ago, business We see combined our company day. the around important further, of best is key winning were this in world. when and of most weeks to ourselves

me let turn to Jon review call quarter. over Now details to the the of the financial

Jonathan Banas

next In results, financial put of earnings that color full our balance cover and sheet details slides, and and I'll few around items Jeff, cash quarterly of and the morning, the Thanks, then our impacted provide some good some key everyone. year context flow, on the some liquidity.

for prior last X. On growth and of summary as Slide show year. and the full $XX.X despite million X.X% to the lost in related of comparisons quarter year of or the stoppage X.X% well the business in -- to UAW XXXX as the earlier turn venture earlier a quarter strike. please a the despite to year. we of sales XXXX for quarter our able Adjusted were to an increase XXXX Europe rubber totaled XXXX, We fourth versus results joint sale EBITDA this achieve quarter fourth quarter impacts our $XXX.X of for sales, the the work with So was results of Asia last of Slide year. in our the Fourth this fourth share with fourth million, X, line technical essentially the year our sales of

pension U.S. incurred quarter. impairments. a the settlements, restructuring basis, loss in net we GAAP of fourth million This included a noncash charges and certain On $XX.X for asset

This for incurred $XX.X diluted of of share diluted per loss items, adjusted million the and quarter or an net to we the an of share other XXXX. in fourth or $X.XX of these $X.XX adjusted Excluding compared XXXX. $XX.X fourth net per million quarter loss special

mix unfavorable compensation the offsets. pressures, foreign offsets. favorable inflationary enhanced Adjusted lower improved $XXX.X commercial costs compared higher totaled partial at adjustments and divestitures million drivers $XX.X for price EBITDA and efficiencies year including increase and inflation full and the partial being Favorable material exchange came increase volume key the the mix, billion, performance-related the XX.X% improvement. Again, in our sustainable recoveries, year and the volume XXXX. of for the million to the operational For with UAW XXXX, full strike new agreements, the raw $X.X were year drivers our XXXX. of and versus an sales and of Continuing were were main

refinancing This restructuring and the expenses, $X.XX of net special or in we for loss the and to impact loss of million share. significant net incurred million. net net these $XX.X other year diluted loss charges on compared debt, for incurred per per This included year XXXX. loss adjusted we items, items. the a when settlement pension million Adjusted the diluted of was Full extinguishment or we is share of a $XXX.X improvement recorded $XXX $X.XX

in X.X% perspective, of of CapEx compared This spent CapEx $XX.X in of we $XX a XXXX. XXXX, sales. is or to X.X% around sales which From million million

Slide full Slide on quantify the fourth The significant sales respectively. X. X changes and EBITDA and charts the our year-over-year adjusted XX of drivers quarter year, the to and for the Moving in

For favorable and was $XX net including sales of lost sales related in This volume approximately adjustments quarter, fourth in price recoveries, and the mix, million. $XX UAW customer million increased strike. to by the sales

Foreign exchange while offset million. million, $XX added divestitures of were an $XX

of favorable results. for general and another to energy $XX were EBITDA, These adjustments accrual strike. and This adjustments. improvements added million million of approximately million other the accounted including the $XX expenses, higher by improved including and recoveries, the wage and certain adjusted inflation mix, in volume in from inflation, quarter. $X items, increases $XX price Manufacturing UAW such as year-end offset and purchasing was lost efficiencies related million For volume of $XX million net

XX. to Moving Slide

million. as impacted well foreign volume $XX full year, growth by Unfavorable million, here, full increased a the exchange technical and sales joint included our the and by in as of share recoveries, our divestiture $XXX $XX combined. Asia the venture offset customer is in million. business by net of adjustments Europe our For which The sales million further approximately $X rubber sales impact was mix, and of strike, of favorable sales price year UAW

inflation $XX The inflation, For EBITDA, of category. the performance-based strike EBITDA exchange recoveries, year customer higher volume and in the $XX improvements million other approximately volume full offset from in price mix, UAW included in lower million included impact in were general manufacturing and items, the million costs. which wages from $XX improved $XX higher adjustments we unfavorable positive purchasing year-over-year. factors in $XX and million, efficiencies $XXX compensation including and by was million $XX mix million and including partially These adjusted and million material improved and

Slide to XX. Moving

were are customer strong changes The working flow to as with accounts activities cash prior in optimize by provided improved an cash as stable we well receivables. the to more of earnings capital versus collection the primarily production $XX.X of leverage net receivable, Net the on driven inventories quarter. the and fourth environment tooling end year. increase to better free year the able We to operating focusing million and as million, year period by cash the compared $XX pleased increase was last $XXX.X million was in of same

for asset expectations utilization. hand, availability our our will production, we and provide vehicle credit focus the of our year $XXX.X in liquidity improving with quarter million million we With on revolving $XXX.X hand additional on came total expenditures ended of and Capital an facility, cash of credit continue as at the on and we cash million make somewhat and efficiencies ample light cash to cash $XX.X Based preservation expected current believe access on operations. generation, intense interest to our required million. and support future current for payments and operating moderating on ongoing outlook facilities pressures, improving our inflation resources flexible $XXX.X

concludes comments. That prepared my

Jeff. me let it So to back over turn

Jeffrey Edwards

to up discussion our remain share want ahead. and a regarding longer-term I morning, our about why And wrap opportunities to outlook our this Jon. few optimistic and near-term Thanks, I thoughts extremely

products. that our reason our Moving optimistic innovation XXXX, bringing them to customers for $XXX achieve technologies to business success in the Slide I'm sustainability objectives. is we new reason clear. is through in of value product and XX. million challenges technical their We're One innovation our with innovations awarded were culture associated new believe help adding market. solve new our In and We

pushing and digital are them ideas More the market necessarily but driving Our demand before, faster extending to and our digital our opportunities bring advantage. tools into faster, we be technologies advancements ever that than ever, we're and technological capabilities new to go solutions because customers helping Not because and faster. are our than us even be competitive innovations, our faster. enable tools technical and

As to trust customers for and always, we continued support. our want their thank

Slide to XX. Turning

recently coolant innovations have is the manifold. of the we One introduced integrated

vehicle delivery electric vehicle But per on airflow significant a system. and to provides efficiencies reduces ICE, for paired these pressures technologies of while simplified within have major fluid growth manifold We problems increased stabilize all elegant of customers, and our adaptable sold to already application assembly the with electric. is the helps optimize but and technology types to costs And The it solve our battery fluid thermal that technology hybrid platform. or for an even configuration management management. customer use a eCoFlow vehicle: drive new they technology this for create for This content enhanced to can allows opportunity further Cooper-Standard. be thermal reduce connections,

sealing Innovation this FlushSeal OEMs was Awards for awards and the recognized a to a around with Plastics awards. door X a last Society Turning customer innovation awards globe. business, with growing well-established program technology contract programs, only in year. offers architecture. FlushSeal But We've new our importantly with the than on of aerodynamics These industry technology. program enhanced and customer are technology the rapidly is way. awards Engineers to In on The improved our more more vehicle Slide changes the the Automotive already variety received aesthetics of traditional minor as finalist XX.

we We're XX. license partner be Slide industry that disclose our to our finally Nike. agreement had and Turning pleased in is able in to footwear agreement that expanded recently announce the to to Fortrex that

and the a of extensions grants in Fortrex technology for the Fortrex As in agreement Nike allows we footwear expanded develop use limited exclusivity disclosed potential the product Nike own additional lines proprietary announcement, to industry. use for It in their also of that applications.

of financial place. agreement the in The remain terms volume-based

offers. opportunities as use agreement expands our creates the this technology upside financial of believe significant Fortrex, Cooper-Standard. their Nike is Fortrex So that opportunity expanded potential We further for it of validation

that MicroDense Fortrex Of our own continuing Fortrex design automotive advantaged EDXX of Fortrex applications, for footprints. offer set, flexibility new compression and increased we're lower including of weight, improved course, carbon development versions and also

will Our rolling market be be capturing which enhanced additional sealing. sales year, Fortrex and out automotive and portfolio in the key automotive markets to share this to will year next

demand in faced setting Specialty significant like our accelerated Slide several profitable for Industrial business industrial XX. share. are in progress are of issues, others, regain growth. Group led and pandemic. XXXX, chains labor segments strategy aftermath marketing Turning and marketing heating, and market the in in job for the This products, in And made productivity the high-growth plant. has agricultural and Supply that to advanced and of optimizing done the to reduced executing a market leverage stage expand business, in to weak. digital our markets frankly, were tight high disrupted, turnover air challenges employee many was markets The now Key ISG appliances, they these construction. new process of a team to industrial great conditioning, and and the techniques ventilation focus major In resolving

leveraging that manufacturing have and ISG the is to tools best automotive addition, of all and optimize our In been practices operations. developed digital deployed

With that well operational rate next EBITDA adjusted XX% excess to period. same deliver in ISG over XX% expect of an in growth improvements and these in place, we excess X margins the of average over achieve in years

reducing maintaining commitment continuing through our improved globally. cash to opportunity drive in expect in for Turning focus areas and controlling to ramp be ISG costs, global XX. which business. company We've leverage that flow. to a improving the and production of on operations In made increasing as our growth exiting costs the continue of part cases, cash volumes The unprofitable future fix to progress successful Slide up. some fixed may profitability opportunities concentrate We're we businesses and for excellent the to optimizing turnaround our best greatest resources flow provide is

the remains as an we have in that done well. past, As option

on a guidance press To Turning XX. to in yesterday we this release let Slide little conclude published me morning, provide afternoon. our color the

expansion global are industry the vehicle Current line and last mix, expect modest markets. our each increasing production customer and year. our With be Our for light top growth. will that expectations outpace vehicle, for new in suggest to margin forecasts strong our per of similar program XXXX further key launches more growth we to content

enable inflationary also and through will continued cost pressures. further to that offset We lean efficiencies improved expect to operating initiatives savings drive us

the we To our need to confident I'm of that to achieve don't continue our agreements commercial forward year, products world-class to will. small and we with our from customers targets year. and renew that negotiate for services the deliver successfully carry automatically portion last

cars a suggests numbers upside Looking in today and that drivers, specifically for out new high averages coming opportunity industry average of licensed for the beyond data overall improvements keep have of age well all production for vehicle that remain up. the light despite will Record we positive in and record significant see automotive U.S., below will consumer fleet to to XXXX, the Cooper-Standard suggest recent of vehicle demand points lot inventories historical the new increase remain years. strong

and targets supportive these that return dynamics, will we Operator, margins profit for With can achieve investment. lines our open the longer-term questions. for I'm let's increasingly and confident on

Operator

from first [Operator question Capital. of Kirk Imperial the Instructions] from Ludtke line comes Our

Kirk Ludtke

start. call. Jon, Slide best on Jeff, Roger, that's you Maybe XX, thank to place the maybe the for

positive? those as on there is? in Is So each $XX X elaborate are flat how the million us guidance could color flat the maybe is revenue wondering production. to can components you all any volume big was essentially give of price, I piece -- mix the the if -- you bridge on a

Jonathan Banas

Hey it's Kirk, Jon.

there Jeff going with on it's The comments small column. number, growing we excess made to -- we're going which operate. the lot is a -- in markets that is those in that While be prepared-wise a in X of regional when in that

we each then work commercial far of well. within that money positive. back our say the space the we to contractual to here which a and our as suffice volumes giving also as auto on comes our it with with And basis But enhancing traditional customers year. continue operate back will in be themselves as do to some environment have go-forward in So that to agreements

us about the to you in overall. Mix, components telling as when far what area different Global seeing is S&P mix a think takes manufactured price the of customers in and puts our as That's vehicles some being built kind regions. the world are of inherent types going view the we're well there's of be in XXXX. as of the So each as

So that trucks. launches part come also EV as it's you there's significant well an of SUV, story. differences to a platform, of continue But of light-duty type as and do be year-over-year whether the regional online some then important component the CUV, see

Kirk Ludtke

respect the is same -- it Got this it. With seasonality? the is you cadence different Or That's to do it helpful. for it's think production the schedule, year? XXXX, the

Jeffrey Edwards

Jeff. it's Kirk,

I more think predicted normal. be to it's

good that's Clearly, there vehicle production I our So quarter that truly the would prepared those bit you it. especially and in describe can be guidance would guess to a improvements slow it. the I base, to the we news overall our start I and first units go margin of guess, describe is volumes. significant have cost year and on our through continue I cost, even lower 'XX, is as a the coming you kind -- make . But conservative, see on we we've are fixed reduced how how used for light are is

remarks, can demand. is you -- that other on based the the and So buying believe sure and regarding interest going believe continues prepared tell, we in know appetite to positive. consumers pent-up be that is We industry my significant vehicles there their metrics many of I'm forward you

we've But volumes to ourselves. expect So the point, to conservative chosen we meantime, some begin a at be reflect the that. bit there to in

Kirk Ludtke

-- Slide a net you that Got of net million. On a business mentioned new on it. Can helpful. assuming And $XXX number. I'm stable? XX, share little your market you That's bit? are elaborate Is that's

Jeffrey Edwards

Yes.

been -- well We it's sometimes year capture this simply have talk the capturing to be -- sales. Just the to new make point to net in And future, innovation, that of business market. make people will that innovations year's innovation, to as to We differentiate today innovation we on next have or is that the ability right? year's, about that clarify, our new impact is the to that the that Kirk, this going when the new $XXX significant just tried million business we several the ourselves point as highlighted those innovation sales. point

as bid, we're new as for come for believe So we programs programs don't replacement out supplier. out come a me-too bid

our ways customers for improve of significant reduce offering to are overall cost the We to overall the improve to performance. and efficiency assembly their

that that calling booking with don't business have card. think because know we we that today to And we're

of we're that. proud really So

I think these vehicle on this as increased launches go content our will definitely per we reflect forward, future content.

your the answers question, if of today. know don't making I that but we kind that's were So point

Kirk Ludtke

And stable? you share, That's respect you're do feel Okay. with to like market helpful.

Jeffrey Edwards

do. We

Kirk Ludtke

And it. Got last question. then

some that negative opportunities in terms mentioned negative You there EBITDA Can us are businesses of may be consuming cash. subtraction give -- by it last addition what the EBITDA, sense in I year? what is guess, businesses was here exiting for you the that a those

Jeffrey Edwards

is again. Sure, Jeff Kirk. This

the I think X that our the first first or the in years time that has time history, think, company's XX certainly, best a cash for This the speak is I news flow company. so. the can made to I EBITDA contribution is positive regions last for of our every and

I have shows certainly we had the we've and have that either fixing that them or because focus because that, that kept on exiting think So we works.

time, operating desire cost lowest for that of for At several reflecting I the And continue our price there's to way mean, providing. a the We or a complexity to certainly we're country, the a vote the different look that. we're other. And ensure in us march dimensions product, through a way at customers have by or customers into one way to what lot pay at goes have country vote fair our possible to continue one by the business just of we'll I other. same product that think us. the certainly,

support right? We're like is kind execution customers that's grateful they our us taken. and in mean that's but continue why what is and business. very we've execute, to And the trust that, we're fact us us, I sure that determines the real we I'm our of approach winning

to businesses answer that will we we don't plan question have continue evolving that will I a I the look -- list, so markets. think that We of And continue. And your on clearly at exiting. to

invested growth higher. that based appropriate are that. on that the from, return that the growth forward decisions at drive going regarding and going place customer footprint plans have we'll where in make the all looking to We're to our where is And and we on opportunities makeup do come today, sure of we'll capital company make and we those continue of

Operator

line Our Michael of comes Instructions] Ward Capital. [Operator next Freedom from question from the

Michael Ward

when we morning, Nike for limited you with there, you if can financial volume-based you definition and can provide any that? a Jeff, And everyone. maybe bit? start define exclusivity. little also, that what have Could Good terms, you say then

Jeffrey Edwards

to question. their them faster allow this us is position for The better is with like agreed deal products a to deal proposed simplest thanks that a that that Jeff. we've faster for were in deal and the go way Mike, developing they across to. describe Nike me put would in to to asked do This together the felt they portfolio,

that. So we expect them do to

that money. expect launched opportunities we and significant really more plan before. lines, They growth agreement will them be product. paid across to allows grow and there Fortrex portfolio. We than faster product. were have we it for committed on what the simple. get doing hopefully to the allows the happens, faster to them that other taking They're when it that go this And And within us it's They

Michael Ward

Okay.

correct? the chemistry, them So you've licensed

Jeffrey Edwards

I'm sorry, there. broke Mike, up you

Michael Ward

not chemistry? the You're sending the licensed the You've material, chemistry? just

Jeffrey Edwards

correct. That's

Michael Ward

different now, shoes. on X think right it's or so I sneakers different And X

you so that they on it And goes, are a sneaker-type basis? how Is how per paid it? do

Jeffrey Edwards

setup on We their have based stream a volumes. royalty

up that's of goes paid. period a over So volume as we're their how time,

Michael Ward

Okay. XXX% cash just margin a And straight cash? It's business? straight flow

Jeffrey Edwards

Yes, we've no got investment. That's correct.

Michael Ward

Okay.

are recoveries your Is EBITDA Okay. the revenue and bridge to the the side? you XX, revenue that both 'XX the placed? mix, look have is and on on 'XX EBITDA where Jon, and on volume Page and you it at when the

Jonathan Banas

in mix both in and Mike. put them sales columns, EBITDA. right, That's adjusted and We that volume respectively,

Michael Ward

Okay.

Is And back years lumpy recoveries you because that was correct? so coming of a had kind prior. 'XX X from the year or X

Jonathan Banas

wasn't that Yes, cadence for is. ratable sure. The

reached that were significant in back QX, If you retroactive. had agreements we some recall

appreciate year price a but is bit those of So full all it to arrangements. reached can enhance lumpy, more view little agreements were representative commercial you our a the that was

Michael Ward

Okay.

those And reset. are so things now

number, your EBITDA? you as So in upside there's go recoveries? of recoveries are little no million into to very that XXXX assumptions, Is on $XX -- XXXX with potential

Jonathan Banas

mentioned of some product areas, still our do regions. there's certain in I to our that probably Yes. sustainable of around work price certain

with is providing. team paid working still the we're services diligently our to properly sure products customers So make getting the we're and for

So again, But the some POs. to do to the work are those. LTAs there. in is that of always nature contractual inherent givebacks overcome the or such industry And oftentimes, we have

got So on with well. prices you've the contractual team to resetting dealing the overhang as but work going

Michael Ward

Okay.

there's your So assumed significant XXXX? in right now, nothing really for assumptions

Jonathan Banas

Well, there's minuses, pluses and Mike.

So [indiscernible] like that.

Michael Ward

Okay.

look at things you X of the As you... --

Jonathan Banas

reached, Mike, clarify, deals just carries on, past year. XX% XX% that to with been customers what agreements we've in to the able that clarify, to to the of our over said we've into Just next reach all

So point of starting your still having those benefit the arrangements.

Michael Ward

Right.

see see in benefits -- comes And been year this is a about, the and in that starting the unfold We're what the for there? it lump while -- so to to was you've starting Jeff that's saying of that we big to actions in projection talking your XXXX. now restructuring

Jeffrey Edwards

correct, that's Yes, Jeff. It's Mike.

abnormal was. on that I think the I last we year, one categorize I that years. know, of all a being think like point is an to I XX, normalcy of with related way to me reached customers price don't have don't before gone XX see this the year best negotiations that for for, year have the

it. So reset we've

And It's it I'll clear. would be see nice leave more our volume. to it margins. on can that that. at very get just You

Michael Ward

other, lastly, actually think. a negative in Was And that point? it is to I just the Or of year, close? anything happened last for there there? negative on and it the compared was year-end that XXXX, a years, you data have in data few corporate segment in QX. big since more What And lumpy

Jonathan Banas

end those inherent those to accrual referenced till to wait lumpiness we see plans. against is and have compensation-related year of do, that incentive is you the the The the see the matters. always to have that performance how Yes, commitments is you the final we Mike, are year-end -- of one overall in true-ups

So charge of be one are out, don't if -- that The will, QX in number. the you corporate elements overheads. costs that to that is the all we of and that fair,

remains always perspective. line there segment as item the that negative a in down So

Michael Ward

Okay.

So the had line? last of on positives that couple where more years you are unusual

Jonathan Banas

goes Unfortunately, against... when it there's positive adjustments,

Michael Ward

right. It was Unfortunately, way. the other that's

Okay. Really appreciate it.

Operator

line the comes Briggs Inc. Our of next Ben question StoneX from Financial, from

Ben Briggs

a So here. few I've got

guidance, of So go add breakeven just through you kind I cash Kind an the your flow minus you flow all get roughly cash of up free as minus XXXX costs. at if those simple EBITDA to the in -- midpoint, using capital obviously expect free bit analysis. quarter. little was a capital Can be a that you for working year, I know tailwind impact cash about to you in this talk fiscal 'XX? generation especially working the fourth what

Jonathan Banas

Yes, Ben, this is Jon. I'll take that one.

big directional. overall management towards in guidance We cash areas. on inventory receivables As were you on But of path the capital to positive a do couple flow flow. We've and made focus areas. working good math is progress provide tooling Certainly, XXXX. customer see can cash those your 'XX improve direct we don't appreciate, of the collection free in free

there the probably in many the walk on operating from in of as we continued So improvement for in volume higher those earnings efficiencies saw the in be XXXX, the that here showing certainly won't still incremental cash some be come to across. areas. bridge They improvements will overall, room significant you is cash frank. as flows But we're

Ben Briggs

end Or provide Should expect right it direct the should Okay. you of see more we capital think do should I at don't -- now? you you expect at But do be Got guidance. you're it. think to guess, different I -- working normalized know a significantly the we year? inventory number,

Jonathan Banas

but customers. of was The volatility those. different, certainly last biggest couple optimization our in schedules significantly in production challenge from obviously of in there's the the continuous Not years improvement

continue the work releases are when those to so changing, hard to really volatility. down balances to it's So whittle

So environment down. stabilizes that continue as production inventory to get more the and take can consistent, to overall we work things then go normalized balance to and

Ben Briggs

impacted this, answered that -- have the accurate? And can you Okay. have fourth gross to? didn't -- in but Got especially third look you with there Is And me true-ups like the onetime were from quarter. was that it. customers some true-ups you it. onetime received the I many payments Got that the there's expecting It margins. I quarter guys all confirm know then to whether in already don't or think you're onetime all positively not just

Jonathan Banas

around supposition that right. was weren't of in $XX Your booked those the in QX. repeat last a that here to million didn't in We QX deals onetime reached There retroactive QX. call on said is lot type million $XX

those once were reached was terms have that the deals in QX received so call that money that payment normal QX in September, in all we've And such been booked already. would it,

part we're collect recorded receivables were to So capital QX. the that of on in as that those elements able working

Ben Briggs

Okay. Got it.

much few we to be should in then moving any some of there term, going is if major not was not from from needle? that ago And I make the expect going positive expect maybe wanted finally, forward. the to quarters know expect I that next that there couple the tailwinds we that Nike but a the to you'd it immediate see to EBITDA news a years. So impact should in when spoken partnership probably that

Jonathan Banas

that fast. now, Nike right just Ben, TBD. move they and as want leave Jeff a arrangement the described it Yes, to we'll has,

it So we'll start and able be cranking report those once they monitor progress, we'll and see up. to how

Ben Briggs

much. take appreciate Thanks Okay. I very time the All to questions. right.

Operator

the from Baird. of comes DiRubbio question next line Brian from Our

Brian DiRubbio

for few me. A questions

Just spending. off with CapEx maybe starting

that's do new we spend to of of run a do forward? you used years. bit? prior sort underspending sales today? you you little think on it percent think in Or about sales CapEx going Is more as to number that rate the for CapEx How a should consider -- You

Jeffrey Edwards

This is Jeff.

last your think there's in lot this But you closer to some the of As launches, years, to X%. new say get normal, we X.X%, the I question. that call, is X% answer could to would closer if mentioned a to I up

Brian DiRubbio

build guess, a pretty pretty sort sense are an for helpful. a the costs that to investment these little that? not in commodities. That's monitoring structured prices as there, over X I some c but just products, see higher concern now you're parts costs Okay. I'm does couple get can your guiding I capital; rubber I up What's the up then compensated I make know make capital. b, could you on a, contracts of of of bit working multipart, months, so higher; expect in lag that: -- And working for of still company those go of a the how the to apologize in it last the we significantly and significantly. bunch for should but costs?

Jonathan Banas

the in ballpark. reaching we've we're that the I'll past was the second Brian, commodity also our XX% to where point recover. customers around are that first. agreements most Yes. -- buys a the in We've said with got of And take one index our

The are back automatic. we So that Many go along in. as costs to are forward. pass that that's just updates. requisite those can we quarterly able go a of up, we either as rest just -- amount. them with X-month then adjusts change, of go typically, the economic were those The indices it, general PO resets And a negotiate basis economics a or but

we're the how viewing of kind world. that's So

from is commodities as more much data it's at see be that a -- stable the in we but we're costs there least in exposed past buying, to the years. far using. points couple XXXX, the news a that Could we're or As been of it's we're than good tailwind. that in the slight even And significant increase don't

do business. a in front seeing commodity So to significant in that anything us our the not exposure overall change cause differently would

Brian DiRubbio

it. make in given no you investments point? And any this -- to Got would inventory -- that so you at plans

Jonathan Banas

No.

Brian DiRubbio

And me. Obviously, a for portion your good final of was picking but you're flow Got good, question a interest. cash just it.

are I roll lien know to in an another on it picks year, this at equity the ones off, does of point? put those thinking guess, first balance how the is table the And liquidity? at sort sheet way, you and raise As about I the any

Jonathan Banas

improvement further I a activities standpoint. to my here adequate going think optimize is strength business debt to rightsize the generation from our be forward continuous the Brian, in going that cash Yes. said service prepared we financial our and remarks flow

today lien the You'll on, we coupon pay a June see the we've period. elected our when notes on third actually file later XX-K for straight

will strong, to be that cash flows we're in make able and So we're advance. continue X to decision months that confident

thinking 'XX into and provisions going not execution as of non-call a 'XX, because to off map any lot the happen we're now next forward point, But first come and can of QX needs So road about then. between as or that your third going strategic far I'm about a change talk lot year. lien to to and

there if rate interest positive. So there environment the could is opportunities be

successive generation have continue cash flow in of execute to front patterns and We us.

happen us means and see. we're to thinking But ahead it to now already for and as execute the grow continues what a we'll So forward between to going There's lot business profitably. then.

Operator

Beach question next Capital. Point comes Azmi line from Zohair from Our of the

Zohair Azmi

for Just questions few me. a

the to has from supply First, going what's Sea? disruptions the business on the with Red chain in impact any there been

Jeffrey Edwards

Jeff. is This

mean But that to crop we where are. industry some operations, supply I that We complex been we're dealing essentially that up? that years our talking would headwinds things there think could of now they've I answer reached Does I the of were don't is say chain to couple there in issues with. normalized type supply the say that the suppose extremely that last point resolved. have this that's about that a still chain the we we've right? the have related aren't

And or lower for costs have our that been competitive. never more reason,

the restored of Our that margin have really with going we operation company of view through execution that's negotiations to price an cash and order generate just needs recovery the from type create the our world-class. point required. The that foundation in customers is went forward

the challenges in behind created We that pretty now place are big some that that us. roller inflation for agreements ensure coaster have us index is that

just that. waiting going that the that forward. uplift. Innovation require never the We're better free is positioned We've has generate for to And flow a company strong. when been volume about cash happens, talked type of we

reason have the supportive. so customers been probably why So our

Jonathan Banas

of Red Canal. And move Jon the specific a Suez here, lot the don't issue, Sea inventory through we to

European the probably of their Red a by being impact European some customers the OEMs not read you've issue. seen at all from or impacted material While about supply have Sea chains, we

Zohair Azmi

would happening you there? the in $XX Right. And sort million? purchasing mind in and helping from step-up of this $XX understand million What's the XXXX to year us efficiencies then guided manufacturing

Jonathan Banas

improvements pipelines, The will, you our purchasing if operations in Zohair, is is area. towards that looking the their Yes. team the in sequential overall year-over-year manufacturing really

on economies suppliers commonized So of opportunities the our for purchases base. sees there's of side scale, spreading as the continued purchasing strategic team out. of supply strategic we work handful the with work instead We a a towards supply base

buck bang more way. for get your You that

of a flow the continuing that exciting far -- the about analyze continue of product. Similar we get things some of see opportunities, buy reductions efficient, pipeline lean a as we're product to a still kind there's it's we from in like, number scrap So it's year-over-year on opportunities and into more as freight how flow on manufacturing going operations side, more reductions how how out that. whether the weigh we to standpoint, all costs in or a and manufacturing

and So many, many page. the the on see areas improvement to that drive attack continuous you

that the XX-XX that million you it's probably purchasing it manufacturing to a think little $XX break down opportunities. about of for discretely, you about versus So lean bit

Zohair Azmi

guys to highlighted? to target X Right. about path double-digit get margin have for we should think me. How timing previously you And last the then and

Jeffrey Edwards

Yes, this is Jeff.

of forecast if as what project we've kind industry you what the could more that years of getting But our helped well get out been in that's if have to seen it have projection the circled we've there take sight. given would we've current volume the what as industry, volume. think with growth and customers within line a saying as of be we our what people from years couple X we the current that plans, certainly -- I faster

the is So and we volume faster that if up believe you, it's much that's available. the pent hopeful give that we're answer I'd and we get

Zohair Azmi

clarify, getting do out, visibility have a To to into that of right. couple margins is you couple you'll of XX% All a it years? in years think so or

Jeffrey Edwards

there X said, I As years. I think in we'll be

Zohair Azmi

that is here? other And Or Okay. there driven are components major largely by volume?

Jeffrey Edwards

by regions No, content margins bit. by all I the think profitable a that that to been being this innovation sales as that about launching products the business we've working by by replace than delivered delivered business we forward. talked It's the volume driven of about. in that all it vehicle has at talking way per in would related we're there. better our It's going we're the year, end it's delivered It's to,

it's product. to higher other we've of the a and content, lot of upon done that of reducing business And cost ourselves margins continuing by by a product customer not It's those That's good fixed improve costs. we really that launching our customer, have innovation to because country, higher country have And margins pretty there. will prosperity. new by line things with sight

Zohair Azmi

off? one the you guys last And for your then as capital thinking non-call about period debt are addressing me. for How structure your roll

Jonathan Banas

to off Zohair, QX kind Jon. The alluded response year. to in I comes Yes. of this it non-call is in my Brian. of next

delivering guidance, already the in look on But now, and described about Jeff business advantage flow environment execution and growth see you. and looking that's market to does cash particular, better, a we're positive the continuing ahead the interest stabilize for just our of commitments all So generate here really for what the centers around that take and free like. little rate us, us it's bit understand market right to

for announce but comes non-call So that plans XX you, it's months here to already away contemplating no off. we're provisions

go profitably specific the bring stronger see we'll overall things So as progresses opportunities forward service But the our as suffice business go how to and say, costs on. portfolio. grows and year see a more it do have down some bit little we to debt ahead

Operator

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

Roger Hendriksen

chance have that If free This reach answered. participation questions this anybody your is the there for questions. a arrange call. ask out feel thanks get everybody, there your please Thanks, participation those out this directly, morning. to morning to Okay. conclude questions, to we'll to will their for for didn't and good me our Again,

Operator

thank concludes your and conference you sir. your Have today. for Ladies We please disconnect gentlemen, participating you, and that this you call for ask day. lines. a lovely Thank

Cooper-Standard (CPS) 16 Feb 242023 Q4 Earnings call transcript