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Cooper-Standard Holdings Inc. (CPS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 sales declined 1.9% year over year to $0.661B, but profitability improved materially: adjusted EBITDA nearly doubled to $54.3M (8.2% margin) and GAAP EPS swung to $2.24; adjusted EPS was $(0.16). Free cash flow was $63.2M, despite full cash interest payments; total liquidity ended near $339M .
  • Management framed 2025 as another year of margin expansion, guiding adjusted EBITDA to $200–$235M on flat-to-slightly lower sales ($2.7–$2.8B) and reiterated a plan to exit 2025 at double-digit EBITDA margins; margins are expected to reach ~10% in Q4 2025 .
  • Operating improvements and restructuring delivered $76M of manufacturing/purchasing savings and $24M of restructuring savings in 2024; Q4 alone saw $26M from efficiency and $11M from restructuring, offsetting inflation and FX headwinds .
  • Management highlighted product innovation (eCoFlow and FlexiCore) and rising content per vehicle, especially in hybrids and select EV programs, supporting a 50% five-year fluids growth outlook and improving variable contribution margins .
  • Street consensus from S&P Global was unavailable at time of analysis; therefore, beat/miss vs estimates cannot be assessed. However, the cadence of margin improvement and positive free cash flow are likely near-term stock catalysts .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA rose 96.8% YoY in Q4 to $54.3M (8.2% of sales) as manufacturing/purchasing efficiencies and restructuring savings more than offset volume, FX, and inflation headwinds .
  • Liquidity strengthened: cash on hand reached $170.0M and total liquidity was ~$339.2M; free cash flow was $63.2M in Q4 even with full cash interest payments, signaling improved cash conversion and working capital execution .
  • Strategic positioning: innovation awards (Coolant Hub, FlexiCore) and rising content per vehicle—especially in hybrids—support increasing margins. CEO: “Virtually in all cases, our margins are going up… we’re able to help do more for our customers” .

What Went Wrong

  • Sales declined 1.9% YoY in Q4 due to unfavorable FX, price adjustments, and weaker production volumes/mix; full-year sales fell 3.0% to $2.73B .
  • FX was a major headwind in 2024 (CFO cited $43M for the year); while some cost currencies began to revert late Q4, 2024 results still absorbed significant FX impacts .
  • Interest burden remains heavy: net cash interest was ~$97.3M in 2024 and is guided up to $105–$115M in 2025, constraining free cash flow potential absent refinancing .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$0.674 $0.708 $0.685 $0.661
GAAP Diluted EPS ($USD)$(3.16) $(4.34) $(0.63) $2.24
Adjusted EPS ($USD)$(1.79) $(0.64) $(0.68) $(0.16)
Adjusted EBITDA ($USD Millions)$27.6 $50.9 $46.1 $54.3
Adjusted EBITDA Margin (%)4.1% 7.2% 6.7% 8.2%

Segment sales and profitability:

SegmentQ4 2023 Sales ($USD Millions)Q4 2024 Sales ($USD Millions)Q4 2023 Adj. EBITDA ($USD Thousands)Q4 2024 Adj. EBITDA ($USD Thousands)
Sealing Systems$351.6 $350.4 $27,347 $40,214
Fluid Handling Systems$305.4 $294.8 $15,646 $27,333
Corporate, Eliminations & Other$16.7 $15.5 $(15,416) $(13,264)
Consolidated$673.6 $660.8 $27,577 $54,283

KPIs and cash metrics:

KPIQ2 2024Q3 2024Q4 2024
Operating Income ($USD Millions)$11.1 $23.5 $31.7
Net Cash from Operations ($USD Millions)$(12.0) $27.9 $74.7
Free Cash Flow ($USD Millions)$(23.3) $16.9 $63.2
Capital Expenditures ($USD Millions)$11.2 $10.9 $11.5
Cash & Equivalents ($USD Millions)$93.8 $107.7 $170.0
Total Liquidity ($USD Millions)$266.5 $280.8 $339.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SalesFY 2024$2.8–$2.9B $2.70–$2.75B Lowered
Adjusted EBITDAFY 2024$180–$210M $180–$195M Lowered (range narrowed)
Capital ExpendituresFY 2024$75–$85M $45–$50M Lowered
Cash RestructuringFY 2024$15–$20M $25–$30M Raised
Net Cash InterestFY 2024$70–$75M $95–$100M Raised
Net Cash TaxesFY 2024$20–$25M $20–$25M Maintained
SalesFY 2025—$2.7–$2.8B New
Adjusted EBITDAFY 2025—$200–$235M New; implies margin expansion
Capital ExpendituresFY 2025—$45–$55M New
Cash RestructuringFY 2025—$20–$25M New
Net Cash InterestFY 2025—$105–$115M New (higher than 2024 actual)
Net Cash TaxesFY 2025—$30–$35M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Margin trajectoryTargeting double-digit EBITDA exiting 2025; EBITDA margin excluding FX above ~9% in Q2; reiterated in Q3 Expect margins ~10% in Q4 2025; double‑digit exit 2025 reaffirmed Improving
FX headwinds/hedgingFX headwinds from MXN, PLN, CZK; partial hedging; expected tail-off into Q4 Anticipate ~$20M FX tailwind in 2025 as cost currencies revert; active hedging Improving
Tariffs/macroMonitoring; capital structure flexibility expected after non‑call expiry in Q1’25 Tariff exposure manageable; expectation to pass costs to customers; hope short‑term Manageable
Capital structure/refinanceNon‑call expiry in Jan 2025; exploring options depending on markets Monitoring credit markets; proactive but prudent; not obligated to act imminently Optionality rising
CapEx discipline~$50–$60M; reuse capital; push paybacks ≤1 year ~1.8% of sales in 2024; guide $45–$55M for 2025 Sustained lower
China domestic OEMsGrowing with Chinese OEMs; profitable; expansion outside China Mix shift accelerating to domestic Chinese OEMs; strong returns; hurdle rates met Expanding
Product innovationFlexiCore/FlushSeal/eCoFlow roadmap; higher content per vehicle Highlighted Coolant Hub & FlexiCore awards; content/margin uplift Momentum building
Volume backdropOEM volume softness; price concessions resurfacing (Q2) Global LVP down ~0.5% expected in 2025; offset with cost and higher‑margin launches Soft volumes; offset by mix

Management Commentary

  • “Adjusted EBITDA for the fourth quarter 2024 was $54.3 million or 8.2% of sales… an improvement of over $28 million compared to the fourth quarter of last year” .
  • “With cash on hand of $170,000,000… and… $169,000,000 of availability… total liquidity of nearly $340,000,000… we expect our free cash flow in 2025 will again be positive” .
  • “Eight of these 10 [2025 top platforms] offer multiple powertrain options… hybrid and battery electric vehicles represent significant opportunities… hybrids represent as much as 80% higher content” .
  • “We expect to lift our strategic target of double digit EBITDA margins as we exit 2025… despite flat or slightly lower sales” .
  • “Even at the base case… we believe the implied growth and our expanding margins will enable us to reduce our net leverage ratio to something in the range of two times or lower… by 2027” .

Q&A Highlights

  • Content per vehicle and margin: Hybrid and EV programs are driving higher content and margins; “virtually in all cases, our margins are going up” .
  • Tariffs: Management expects customer pass‑throughs and minimal long‑term industry impact; proactive communication with OEMs .
  • Interest and cash: 2024 total cash interest ~$97M; PIK election no longer available from 2025; free cash flow expected positive again in 2025 .
  • FX outlook: Expect ~$20M FX tailwind in 2025; hedging program in place to protect planned expenditures .
  • Working capital and regional profitability: Continued opportunities in payables/inventory; EBITDA positive across all regions in Q4 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and forward quarters were unavailable at the time of analysis due to provider limits; therefore, we cannot assess beat/miss vs Street. If consensus was below management’s 2025 adjusted EBITDA guidance ($200–$235M), estimates would likely need to revise higher to reflect cost savings, launch mix, and FX tailwinds .

Key Takeaways for Investors

  • Strong Q4 quality: Profitability and cash flow outperformed the volume backdrop, with adjusted EBITDA up ~97% YoY and free cash flow $63.2M while paying full cash interest .
  • 2025 setup: Margin expansion is the core narrative—double‑digit exit confirmed; guidance implies EBITDA improvement on flat sales, supported by restructuring run‑rate and higher‑margin launches .
  • FX/regional mix: Anticipated $20M FX tailwind and increasing hybrid/EV content per vehicle bolster 2025 earnings power .
  • Capital structure optionality: Non‑call expiries increase refinancing flexibility; management will be “proactive, but prudent” in lowering cost of capital .
  • Innovation and share gains: Award‑winning products (eCoFlow, FlexiCore) are catalysts for content uplift and variable margin improvement with Chinese domestic OEMs expansion .
  • Execution durability: EBITDA positive in all regions, sustained capex discipline (~$45–$55M 2025), and continued working capital efforts underpin cash generation .
  • Near‑term trading lens: With Street consensus unavailable, the drivers to watch are margin cadence, cash interest trajectory, FX tailwinds, and any tariff headlines; management commentary suggests operational levers can offset macro softness .