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    Cooper-Standard Holdings (CPS)

    CPS Q3 2024: EBITDA Positive in North America & Europe, Margins Up

    Reported on Aug 1, 2025 (After Market Close)
    Pre-Earnings Price$14.75Last close (Nov 1, 2024)
    Post-Earnings Price$14.75Last close (Nov 1, 2024)
    Price Change
    $0.00(0.00%)
    • Sustainable profitability across regions: Executives confirmed that CPS was EBITDA positive in both North American and European markets despite macro headwinds, indicating consistent operational performance and revenue generation across geographies.
    • Robust cost reduction and financial flexibility: Management highlighted ongoing lean initiatives, restructuring savings, and favorable refinancing prospects with non-call provisions expiring in Q1 2025, which could lower capital costs and boost margins.
    • Innovative product pipeline driving margin expansion: The discussion underscored the market interest in new innovations, such as the eCoFlow and FlexiCore thermoplastic door seal technologies, which promise improved per-vehicle profit margins and a competitive edge in product offerings.
    • Persistent Volume and Mix Challenges: Management repeatedly acknowledged that lower production volumes and unfavorable volume/mix remain headwinds that could continue to pressure sales and margins despite cost-cutting efforts.
    • Currency (FX) Exposure Issues: Executives highlighted significant exposure to cost-only currencies like the peso, Polish zloty, and Czech koruna, with only partial hedging, which leaves the company vulnerable to further adverse FX movements.
    • Refinancing Uncertainty: The need to refinance upcoming debt in Q1 2025, combined with uncertainty about future capital market conditions and potentially punitive call premiums, poses a risk that could increase the company’s cost of capital.
    1. Debt Refinancing
      Q: Will you refinance amid falling rates?
      A: Management plans to refinance after non-call provisions expire in Q1 2025, aiming to lower interest costs when market conditions are favorable, supported by improved cash flow and profitability.

    2. FX Mitigation
      Q: Can you reduce the adverse FX impact?
      A: Management explained that while hedging programs are in place, they do not fully offset FX headwinds—primarily from cost currencies—with an expectation that these impacts will ease slightly in Q4.

    3. Margin Drivers
      Q: What’s fueling Q4 margin expansion?
      A: The company expects margin improvements from lean manufacturing initiatives, $11 million of sequential restructuring savings, and normalized incentive adjustments, partially offset by inflation and volume challenges.

    4. Cost-Savings Sustainability
      Q: Are your cost cuts sustainable if volume rises?
      A: Management is confident that the cost reduction measures remain sustainable over the next three years, even with potential volume increases, ensuring efficient operations under varying market conditions.

    5. Regional EBITDA
      Q: Was EBITDA positive in all regions?
      A: Management confirmed both North America and Europe reported positive EBITDA, despite common headwinds from macroeconomic factors, reflecting consistent operational performance across regions.

    6. CapEx Guidance
      Q: Will CapEx remain low next year?
      A: The firm anticipates maintaining a CapEx run rate around $50 million, benefiting from redesigned processes and capital reuse initiatives, even with new business wins.

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