Cooper-Standard Holdings Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Hello, Jeff, John, Roger. Thank you. Thank you for the call.

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Good morning. On Slide 16, this is interesting. You mentioned that the content per vehicle in fluid handling would be up 30% in the next five years. Is there any guidance as to what content for vehicle and ceiling will be?

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Got it. That's helpful, and it seems as though there are new products driving that increase in content per vehicle?

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Got it. Thank you. How does that shift in mix affect the overall gross margin? Is it positive negative? Yes.

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Thank you. And you did reiterate the margin of a double digit margin exiting 2025. That's an adjusted EBITDA margin? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Got it. Thank you. And how should we think about I know this is super fluid, maybe a little bit early, but how should we think about tariffs? To what extent are you selling product into The US Or Mexico, that type of thing?

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Fantastic. So there seems to be some, at least at this point, understanding that the cost will be passed on to customers?

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Got it. I appreciate it. That's all very encouraging. Thank you.

Question: Michael Ward - Freedom Capital Market - Analyst : Thanks very much. Good morning, everyone. Jeff, on the bigger picture, there are two things we're not hearing in the industry, what we're hearing and we're hearing more of. I haven't heard anybody really on the supplier side talk about price downs from the vehicle manufacturers. And you're also hearing from the vehicle manufacturers much more so in the past that they're willing to pay for innovation. And I'm just wondering what your thoughts are on those two things? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Michael Ward - Freedom Capital Market - Analyst : That makes sense. But, those are two pretty big changes from what we've seen historically. Historically, they seem to hit you with a stick and they want 5%. Now, it seems like within productivity parameters in the price downside. Yes.

Question: Michael Ward - Freedom Capital Market - Analyst : John, two things. The first one on the pick, and it looks like is my math right? If I look last year, you picked the interest and it was roughly a positive $58,000,000 I think on the cash flow statement, $59,000,000 and this year it's just $12,000,000 So, is that to say that you paid whatever that difference is, dollars 40,000,000 or so in cash interest rather than REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Michael Ward - Freedom Capital Market - Analyst : And it looks like for your '25 guide, you're expecting to continue to pay the cash rather than pick?

Question: Michael Ward - Freedom Capital Market - Analyst : Okay. The second thing is on FX. This year was a headwind and wondering if there's any way you can remedy that or maybe you have because it looks like it's a a $60,000,000 swing in the bridge on the EBITDA going from $24,000,000 to $25,000,000?

Question: Michael Ward - Freedom Capital Market - Analyst : nd just one last thing, following on with Kurt's questioning on the tariff side. When I look at the '23 ks and I look at the revenue from the different countries and then the property and equipment from the countries, When you have revenue from Mexico of $774,000,000 is that could that be components both produced in Mexico and The United States, put on vehicles in Mexico then shipped to The United States? Is that by area of vehicle manufacturer or area of where your components are manufactured? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Michael Ward - Freedom Capital Market - Analyst : Okay. So as far as tariff exposure, youhave but who knows where it goes. Roughly $770,000,000 from operations in Mexico. And then Canada, you have another $170,000,000 That's what you're looking at. But as you mentioned, as Jeff mentioned, that you're working with your customers.

Question: Michael Ward - Freedom Capital Market - Analyst : Or export from Mexico?

Question: Michael Ward - Freedom Capital Market - Analyst : Okay. So, those are the levers they can pull. Okay. Very good. Thank you very much.

Question: Brian DiRubbio - Baird - Analyst : Good morning, gentlemen. A couple of questions for me. Just tooling receivables, making some headway the last couple of years, going back to my model, Lois had seen, I think, since 2010 on those that number. You'll be able are you going to be able to squeeze any more cash out of tooling receivables over the next year or is that going to be a headwind at some point? Just trying to understand the dynamics there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Brian DiRubbio - Baird - Analyst : Got it. That's helpful there. And then just on CapEx, the guidance that you gave, are we now thinking about CapEx to sales as permanently lower than 2% of sales?

Question: Brian DiRubbio - Baird - Analyst : Got it. That's helpful there. And one of the costs that I know a couple of companies are experiencing in Western Europe is just to get a higher energy cost. Is that something that you're able to get mitigated? Or is that something you're going to have to deal on your own?

Question: Brian DiRubbio - Baird - Analyst : Understood. And I guess final question for me, just as I look at the chart on Page 14 about the top 10 platforms. Maybe asking about your business mix in a different way, how much of your business has shifted to the domestic Chinese auto companies over the last two to three years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Brian DiRubbio - Baird - Analyst : Great. That's all I have for now. Thank you so much.

Question: Ben Briggs - StoneX Group Inc - Analyst : Good morning, guys, and thank you for taking the call, and congratulations on the quarter and this strong guidance. Most yes, of course. Vast majority of mine got answered. So, thank you. One question I had. So, in your prepared remarks, you guys indicated that you've got a roughly two times net leverage target in the long run. Did I hear that correctly?

Question: Ben Briggs - StoneX Group Inc - Analyst : Okay, great. And can you give some --

Question: Ben Briggs - StoneX Group Inc - Analyst : Okay, great. Thank you. So do you think if I were going to try to pin a date on that, do you think 2027 area would be the goal for that two times target or do you not want to put a date on it quite yet?

Question: Ben Briggs - StoneX Group Inc - Analyst : Okay great that's very helpful thank you. And just you had mentioned that there's some you're growing share rapidly in the Chinese domestic OEM market. Can you give any insight as to what margins there look like? Are they comparable to the rest of the business? Are they stronger? What does that look like?

Question: Ben Briggs - StoneX Group Inc - Analyst : Okay. All right, that's very helpful. Thank you guys for taking the questions, and congrats on the quarter again.

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Just a couple of follow ups. With respect to the fiscal 'twenty five guidance, you mentioned you'd be cash flow positive. Do you what's the expectation with respect to working capital and any other sources of cash?

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Great. Thank you. And then just lastly, you've been EBITDA positive in both North America and Europe for a while. I just wanted to confirm that was the case again in the fourth quarter?

Question: Kirk Ludtke - Imperial Capital, LLC - Analyst : Got it. Thank you. That's it for me. Thank you.