Press Release

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Feb 14, 2019
Cooper Standard Reports Fourth Quarter and Full Year 2018 Results

NOVI, Mich., Feb. 14, 2019 /PRNewswire/ -- Cooper-Standard Holdings Inc. (NYSE: CPS) today reported preliminary results for the fourth quarter and full year 2018.

Highlights

  • Full year net income totaled $107.8 million or $5.89 per fully diluted share
  • Full year adjusted net income totaled $160.7 million or $8.79 per fully diluted share
  • Full year adjusted EBITDA totaled $376.5 million, or 10.4 percent of sales
  • Net new business awards totaled $64 million in the quarter and $441 million for the full year
  • Sales awards for innovation products totaled $70 million in the quarter and $287 million for the full year

"Market conditions in Asia and Europe remained challenging during the fourth quarter and commodity costs continued to increase globally," stated Jeffrey Edwards, chairman and CEO, Cooper Standard. "While we anticipate similar headwinds in 2019, we are focused on executing our strategy to create value through innovation, improving operating efficiency and increasing returns on invested capital.  Strong net new business awards in 2018 and a record number of new program launches planned for 2019, both in our automotive and non-automotive businesses, support our positive long-term outlook for profitable growth."

Consolidated Results*


Quarter Ended December 31,


Year Ended December 31,


2018


2017


2018


2017


(dollar amounts in millions except per share amounts)

Sales

$

872.0



$

937.9



$

3,629.3



$

3,618.1


Net income (loss)

$

(23.1)



$

28.5



$

107.8



$

135.3


Adjusted net income

$

27.5



$

63.6



$

160.7



$

208.0


Earnings per diluted share

$

(1.30)



$

1.53



$

5.89



$

7.21


Adjusted earnings per diluted share

$

1.53



$

3.42



$

8.79



$

11.08


Adjusted EBITDA

$

76.4



$

131.2



$

376.5



$

452.0


 

The year-over-year change in fourth quarter sales was primarily attributable to unfavorable volume and mix, foreign exchange and customer price adjustments, partially offset by the net positive impact of acquisitions and divestitures. For the full year, favorable foreign exchange and the net positive impact of acquisitions and divestitures more than offset customer price adjustments and unfavorable volume and mix.

Net income for the fourth quarter and full year 2018 included the impact of non-cash impairment charges related to goodwill and other assets in the Company's Asia Pacific and Europe reporting units.  It also included the tax benefit related to the reversal of the Company's valuation allowance on net deferred tax assets in France and on capital losses in the U.S.  Adjusted net income, which excludes these and other special or non-operating items, was down in the fourth quarter and full year 2018 due largely to unfavorable volume and mix, customer price adjustments, higher material costs and general inflation, partially offset by operating efficiencies, lower sales, general, administrative and engineering (SGA&E) expense, and the lower statutory tax rate in the U.S.

The year-over-year change in fourth quarter and full year adjusted EBITDA is largely attributable to unfavorable volume and mix, customer price adjustments, higher raw material costs and general inflation, partially offset by operating efficiencies and lower SGA&E expense.

Adjusted net income, adjusted EBITDA and adjusted earnings per diluted share are non-GAAP measures.  Reconciliations to the most directly comparable financial measures, calculated and presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), are provided in the attached supplemental schedules.

Notable Developments

During the fourth quarter, Cooper Standard launched 56 new customer programs and was awarded $64 million in annual net new business.  For the full year 2018, the Company's annual net new business awards totaled $441 million.  New contract awards related to the Company's recent product innovations, including both new and replacement business, totaled $70 million for the quarter.  Cooper Standard's expanding portfolio of commercialized innovation products includes: MagAlloy™; ArmorHose™; ArmorHose™ TPV; Gen III Posi-Lock™; TP Microdense; and Fortrex™.

During the fourth quarter, the Company announced an agreement to sell its anti-vibration systems business and the divestiture is expected to close early in the second quarter of 2019, subject to customary closing conditions.

Quarterly Segment Results

North America

Cooper Standard'sNorth America segment reported sales of $476.4 million in the fourth quarter of 2018 compared to $479.4 million in the fourth quarter of 2017. The change was primarily attributable to unfavorable volume and mix and customer price adjustments, offset by incremental sales related to acquisitions.

North America segment profit was $51.3 million in the fourth quarter of 2018 compared to $65.2 million in the fourth quarter of 2017. The year-over-year change was primarily attributable to unfavorable volume and mix, higher material costs, customer price adjustments and inflation, partially offset by improvements in operating efficiency, lower compensation-related expense and other cost reduction initiatives.

Europe

Cooper Standard'sEurope segment reported sales of $230.2 million in the fourth quarter of 2018 compared to $267.4 million in the fourth quarter of 2017. The change was attributable to unfavorable volume and mix, customer price adjustments and foreign exchange.

The Europe segment reported a segment loss of $57.2 million in the fourth quarter of 2018, compared to a segment profit of $1.8 million in the fourth quarter of 2017. The year-over-year change was largely attributable to $41.5 million of non-cash impairment charges related to goodwill, fixed assets and other intangible assets, unfavorable volume and mix, customer price adjustments, higher material costs and general inflation, partially offset by savings related to restructuring and other cost reduction initiatives.

Asia Pacific

Cooper Standard'sAsia Pacific segment reported sales of $143.1 million in the fourth quarter of 2018 compared to $163.2 million in the fourth quarter of 2017. The change was largely attributable to unfavorable volume and mix, customer price adjustments and foreign exchange, partially offset by incremental sales related to acquisitions.

The Asia Pacific segment reported a segment loss of $68.6 million in the fourth quarter of 2018, compared to a segment loss of $1.1 million in the fourth quarter 2017. The year-over-year change was primarily attributable to $38.9 million of non-cash impairment charges related to goodwill and fixed assets in India and Korea, unfavorable volume and mix, customer price adjustments and inflation, partially offset by improvements in operating efficiency, savings related to restructuring and lower compensation-related expense.

South America

Cooper Standard'sSouth America segment reported sales of $22.3 million in the fourth quarter of 2018 compared to $27.9 million in the fourth quarter of 2017. The change was primarily attributable to foreign exchange and unfavorable volume and mix.

The South America segment reported a segment loss of $3.7 million in the fourth quarter of 2018 compared to a loss of $2.6 million in the fourth quarter of 2017. The year-over-year change was primarily attributable to higher material costs.

Liquidity and Cash Flow

At December 31, 2018, Cooper Standard had cash and cash equivalents totaling $265.0 million.  Net cash provided by operating activities in the fourth quarter 2018 was $71.4 million compared to $208.0 million in the fourth quarter of 2017.  Free cash flow (defined as net cash provided by operating activities minus capital expenditures) was $13.4 million in the fourth quarter of 2018 compared to $158.7 million in the fourth quarter of 2017. For the full year 2018, net cash provided by operating activities was $149.4 million compared to $313.1 million in 2017.  Free cash flow for the full year 2018 was $(68.7) million compared to $126.3 million in 2017.

In addition to cash and cash equivalents, the Company had $144.3 million available under its senior amended asset-based revolving credit facility ("ABL facility") for total liquidity of $409.3 million at December 31, 2018.

Total debt at December 31, 2018 was $831.1 million compared to $758.2 million at December 31, 2017.  Net debt (defined as total debt minus cash and cash equivalents) at December 31, 2018 was $566.1 million compared to $242.3 million at December 31, 2017.  Cooper Standard's net leverage ratio (defined as net debt divided by adjusted EBITDA) at December 31, 2018 was 1.5 times trailing 12 months adjusted EBITDA.

Outlook

The Company has issued 2019 full year guidance as follows:


Current Guidance

Sales

$3.40 - $3.60 billion

Adjusted EBITDA1

$300 - $340 million

Capital Expenditures

$180 - $190 million

Cash Restructuring

$15 - $25 million

Effective Tax Rate

16% - 18%


1 Adjusted EBITDA is a non-GAAP financial measure. We have not provided a reconciliation of projected adjusted EBITDA to projected net income because full-year  net income will include special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.  Due to this uncertainty, we cannot reconcile projected adjusted EBITDA to U.S. GAAP net income without unreasonable effort.


Conference Call Details

Cooper Standard management will host a conference call and webcast on February 15 at 9 a.m. ET to discuss its fourth quarter and full year 2018 results, provide a general business update and respond to investor questions.

To participate in the live question-and-answer session, callers in the United States and Canada should dial toll-free 877-374-4041 (international callers dial 253-237-1156) and provide the conference ID 9692137 or ask to be connected to the Cooper Standard teleconference. Callers should dial in at least five minutes prior to the start of the call. Financial and automotive analysts are invited to ask questions after the presentations are made.

The interactive webcast and slide presentation can be accessed live or in replay on the investor relations page of the Cooper Standard website at www.ir.cooperstandard.com/events.cfm.

About Cooper Standard

Cooper Standard, headquartered in Novi, Mich., is a leading global supplier of systems and components for the automotive industry. Products include rubber and plastic sealing, fuel and brake lines, fluid transfer hoses and anti-vibration systems. Cooper Standard employs approximately 32,000 people globally and operates in 21 countries around the world. For more information, please visit www.cooperstandard.com.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby.  Our use of words "estimate," "expect," "anticipate," "project," "plan," "intend," "believe," "outlook," "guidance," "forecast," or future or conditional verbs, such as "will," "should," "could," "would," or "may," and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. Among other items, such factors may include: prolonged or material contractions in automotive sales and production volumes; our inability to realize sales represented by awarded business; escalating pricing pressures; loss of large customers or significant platforms; our ability to successfully compete in the automotive parts industry; availability and increasing volatility in costs of manufactured components and raw materials; disruption in our supply base; entering new markets; possible variability of our working capital requirements; risks associated with our international operations, including changes in laws, regulations, and policies governing the terms of foreign trade such as increased trade restrictions and tariffs; foreign currency exchange rate fluctuations; our ability to control the operations of our joint ventures for our sole benefit; our substantial amount of indebtedness; our ability to obtain adequate financing sources in the future; operating and financial restrictions imposed on us under our debt instruments; the underfunding of our pension plans; significant changes in discount rates and the actual return on pension assets; effectiveness of continuous improvement programs and other cost savings plans; manufacturing facility closings or consolidation; our ability to execute new program launches; our ability to meet customers' needs for new and improved products; the possibility that our acquisitions and divestitures may not be successful; product liability, warranty and recall claims brought against us; laws and regulations, including environmental, health and safety laws and regulations; legal proceedings, claims or investigations against us; work stoppages or other labor disruptions; the ability of our intellectual property to withstand legal challenges; cyber-attacks or other disruptions in our information technology systems; the possible volatility of our annual effective tax rate; changes in our assumptions as a result of IRS issuing guidance on the Tax Cuts and Jobs Act; the possibility of future impairment charges to our goodwill and long-lived assets; our dependence on our subsidiaries for cash to satisfy our obligations; and other risks and uncertainties, including those detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

You should not place undue reliance on these forward-looking statements.  Our forward-looking statements speak only as of the date of this press release and we undertake no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where we are expressly required to do so by law.

This press release also contains estimates and other information that is based on industry publications, surveys and forecasts.  This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.

CPS_F

Contact for Analysts:

Contact for Media:

Roger Hendriksen

Sharon Wenzl

Cooper Standard

Cooper Standard

(248) 596-6465

(248) 596-6211

roger.hendriksen@cooperstandard.com

sswenzl@cooperstandard.com

*The financial results discussed throughout this release are presented on a preliminary basis.  The Company's annual report on Form 10-K for the year ended Dec. 31, 2018 will include audited financial results.

Financial statements and related notes follow:

 

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED STATEMENTS OF NET INCOME

(Dollar amounts in thousands except share and per share amounts)










Quarter Ended December 31,


Year Ended December 31,


2018


2017


2018


2017


(Unaudited)


(Unaudited)


(Unaudited)



Sales

$

871,987



$

937,914



$

3,629,293



$

3,618,126


Cost of products sold

760,331



759,474



3,075,737



2,946,687


Gross profit

111,656



178,440



553,556



671,439


Selling, administration & engineering expenses

75,892



80,603



314,805



340,963


Amortization of intangibles

4,248



3,493



14,844



14,056


Gain on sale of land

337





(10,377)




Goodwill impairment charges

45,281





45,281




Other impairment charges

43,706



10,493



43,706



14,763


Restructuring charges

9,881



6,917



29,722



35,137


Operating profit (loss)

(67,689)



76,934



115,575



266,520


Interest expense, net of interest income

(11,248)



(10,324)



(41,004)



(42,112)


Equity in earnings of affiliates

2,370



1,784



6,718



5,519


Loss on refinancing and extinguishment of debt





(770)



(1,020)


Other expense, net

(1,640)



(5,164)



(5,613)



(15,807)


Income (loss) before income taxes

(78,207)



63,230



74,906



213,100


Income tax expense (benefit)

(49,514)



34,269



(29,683)



74,527


Net income (loss)

(28,693)



28,961



104,589



138,573


Net (income) loss attributable to noncontrolling interests

5,634



(460)



3,177



(3,270)


Net income (loss) attributable to Cooper-Standard Holdings
Inc.

$

(23,059)



$

28,501



$

107,766



$

135,303










Weighted average shares outstanding








Basic

17,761,701



17,815,292



17,894,718



17,781,272


Diluted

17,761,701



18,591,378



18,290,202



18,776,653










Earnings per share:








Basic

$

(1.30)



$

1.60



$

6.02



$

7.61


Diluted

$

(1.30)



$

1.53



$

5.89



$

7.21


 

 

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)






December 31,


2018


2017

Assets

(Unaudited)



Current assets:




Cash and cash equivalents

$

264,980



$

515,952


Accounts receivable, net

418,607



494,049


Tooling receivable

141,106



112,561


Inventories

175,572



170,196


Prepaid expenses

36,878



33,205


Other current assets

108,683



100,778


Assets held for sale

103,898




Total current assets

1,249,724



1,426,741


Property, plant and equipment, net

984,241



952,178


Goodwill

143,681



171,852


Intangible assets, net

99,602



69,091


Deferred tax assets

70,007



33,834


Other assets

75,848



71,952


Total assets

$

2,623,103



$

2,725,648


Liabilities and Equity




Current liabilities:




Debt payable within one year

$

101,323



$

34,921


Accounts payable

452,320



523,296


Payroll liabilities

92,604



123,090


Accrued liabilities

98,907



145,650


Liabilities held for sale

71,195




Total current liabilities

816,349



826,957


Long-term debt

729,805



723,325


Pension benefits

138,771



180,173


Postretirement benefits other than pensions

40,901



61,921


Deferred tax liabilities

8,233



9,511


Other liabilities

29,542



68,672


Total liabilities

1,763,601



1,870,559


7% Cumulative participating convertible preferred stock




Equity:




Common stock

17



18


Additional paid-in capital

501,511



512,815


Retained earnings

576,025



511,367


Accumulated other comprehensive loss

(246,088)



(197,631)


Total Cooper-Standard Holdings Inc. equity

831,465



826,569


Noncontrolling interests

28,037



28,520


Total equity

859,502



855,089


Total liabilities and equity

$

2,623,103



$

2,725,648


 

 

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)








Year Ended December 31,


2018


2017


2016


(Unaudited)





Operating Activities:






Net income

$

104,589



$

138,573



$

140,439


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation

131,854



124,032



109,094


Amortization of intangibles

14,844



14,056



13,566


Gain on sale of land

(10,377)






Impairment charges

88,987



14,763



1,273


Share-based compensation expense

8,520



24,963



24,032


Equity in earnings, net of dividends related to earnings

(1,856)



(137)



(4,855)


Loss on refinancing and extinguishment of debt

770



1,020



5,104


Deferred income taxes

(40,721)



11,076



9,082


Other

2,652



1,286



1,591


Changes in operating assets and liabilities:






Accounts and tooling receivable

17,916



(26,428)



(579)


Inventories

1,410



(13,929)



6,651


Prepaid expenses

(4,647)



5,981



(7,010)


Accounts payable

(32,502)



11,415



70,066


Payroll and accrued liabilities

(65,646)



8,879



5,612


Other

(66,405)



(2,444)



(8,595)


Net cash provided by operating activities

149,388



313,106



365,471


Investing activities:






Capital expenditures

(218,071)



(186,795)



(164,368)


Acquisition of businesses, net of cash acquired

(171,653)



(478)



(37,478)


Cash from consolidation of joint venture





3,395


Other

6,733



(13,349)



185


Net cash used for investing activities

(382,991)



(200,622)



(198,266)


Financing activities:






Proceeds from issuance of long-term debt, net of debt issuance costs





393,060


Repayment and refinancing of term loan facility





(397,196)


Principal payments on long-term debt

(3,437)



(19,866)



(10,747)


Purchase of noncontrolling interest

(2,450)






Repurchase of common stock

(59,955)



(55,123)



(23,800)


Proceeds from exercise of warrants



2,373



2,810


Increase (decrease) in short term debt, net

65,198



10,683



(12,223)


Taxes withheld and paid on employees' share-based payment awards

(11,618)



(13,297)



(12,624)


Other

(2,178)



(297)



(2,196)


Net cash used for financing activities

(14,440)



(75,527)



(62,916)


Effects of exchange rate changes on cash, cash equivalents and restricted cash

(3,019)



(1,475)



(666)


Changes in cash, cash equivalents and restricted cash

(251,062)



35,482



103,623


Cash, cash equivalents and restricted cash at beginning of period

518,461



482,979



379,356


Cash, cash equivalents and restricted cash at end of period

$

267,399



$

518,461



$

482,979



Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet:









Cash and cash equivalents

$

264,980



$

515,952



$

480,092


Restricted cash included in other current assets

18



88




Restricted cash included in other assets

2,401



2,421



2,887


Total cash, cash equivalents and restricted cash shown in the statement of cash flows

$

267,399



$

518,461



$

482,979


 

Non-GAAP Measures

EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and free cash flow are measures not recognized under U.S. GAAP and which exclude certain non-cash and special items that may obscure trends and operating performance not indicative of the Company's core financial activities. Management considers EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and free cash flow to be key indicators of the Company's operating performance and believes that these and similar measures are widely used by investors, securities analysts and other interested parties in evaluating the Company's performance. In addition, similar measures are utilized in the calculation of the financial covenants and ratios contained in the Company's financing arrangements and management uses these measures for developing internal budgets and forecasting purposes. EBITDA is defined as net income adjusted to reflect income tax expense, interest expense net of interest income, depreciation and amortization, and adjusted EBITDA is defined as EBITDA further adjusted to reflect certain items that management does not consider to be reflective of the Company's core operating performance. Adjusted EBITDA margin is adjusted EBITDA presented as percentage of sales.  Adjusted net income is defined as net income adjusted to reflect certain items that management does not consider to be reflective of the Company's core operating performance. Adjusted earnings per share is defined as adjusted net income divided by the weighted average number of basic and diluted shares. Free cash flow is defined as net cash provided by operating activities minus capital expenditures and is useful to both management and investors in evaluating the Company's ability to service and repay its debt.

When analyzing the Company's operating performance, investors should use EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and free cash flow as supplements to, and not as alternatives for, net income, operating income, or any other performance measure derived in accordance with U.S. GAAP, and not as an alternative to cash flow from operating activities as a measure of the Company's liquidity. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and free cash flow have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of the Company's results of operations as reported under U.S. GAAP. Other companies may report EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and free cash flow differently and therefore the Company's results may not be comparable to other similarly titled measures of other companies. In addition, in evaluating adjusted EBITDA and adjusted net income, it should be noted that in the future the Company may incur expenses similar to or in excess of the adjustments in the below presentation. This presentation of adjusted EBITDA and adjusted net income should not be construed as an inference that the Company's future results will be unaffected by special items.  Reconciliations of EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income and free cash flow follow.

 

Reconciliation of Non-GAAP Measures


EBITDA and Adjusted EBITDA


The following table provides reconciliation of EBITDA and adjusted EBITDA from net income (unaudited):



Quarter Ended December 31,


Year Ended December 31,


2018


2017


2018


2017


(dollar amounts in thousands)

Net income attributable to Cooper-Standard Holdings Inc.

$

(23,059)



$

28,501



$

107,766



$

135,303


Income tax expense

(49,514)



34,269



(29,683)



74,527


Interest expense, net of interest income

11,248



10,324



41,004



42,112


Depreciation and amortization

37,427



38,675



146,698



138,088


EBITDA

$

(23,898)



$

111,769



$

265,785



$

390,030


Other impairment charges (1)

43,706



10,493



43,706



14,763


Goodwill impairment charges (2)

39,818





39,818




Restructuring charges (3)

9,881



6,917



29,722



35,137


Gain on sale of land (4)

337





(10,377)




Project costs (5)

4,881





4,881




Amortization of inventory write-up (6)

925





1,460




Loss on refinancing and extinguishment of debt (7)





770



1,020


Settlement charges (8)

775



525



775



6,427


Foreign tax amnesty program (9)



1,502





4,623


Adjusted EBITDA

$

76,425



$

131,206



$

376,540



$

452,000










Sales

$

871,987



$

937,914



$

3,629,293



$

3,618,126


Net income margin

(2.6)

%


3.0

%


3.0

%


3.7

%

Adjusted EBITDA margin

8.8

%


14.0

%


10.4

%


12.5

%


(1)

Other non-cash impairment charges in 2018 related to intangible assets of $791 and fixed assets of $42,915. Impairment charges in 2017 related to fixed assets of $14,763.

(2)

Non-cash goodwill impairment charges in 2018 related to impairments at our Europe and Asia Pacific reporting units, net of approximately $5,463 attributable to our noncontrolling interests.

(3)

Includes non-cash impairment charges related to restructuring.

(4)

Gain on sale of land in Europe that was contemplated in conjunction with our restructuring plan.

(5)

Project costs related to acquisitions and planned divestiture.

(6)

Amortization of write-up of inventory to fair value for the 2018 acquisitions.

(7)

Loss on refinancing and extinguishment of debt relating to the March 2018 amendment and May 2017 amendment of the Term Loan Facility.

(8)

Non-cash settlement charges incurred related to certain of our non-U.S. pension plans. 

(9)

Relates to indirect taxes recorded in cost of products sold.

 

 

Adjusted Net Income and Adjusted Earnings Per Share


The following table provides reconciliation of net income to adjusted net income and the respective earnings per share amounts (unaudited):



Quarter Ended December 31,


Year Ended December 31,


2018


2017


2018


2017


(dollar amounts in thousands, except per share amounts)

Net income attributable to Cooper-Standard Holdings Inc.

$

(23,059)



$

28,501



$

107,766



$

135,303


Other impairment charges(1)

43,706



10,493



43,706



14,763


Goodwill impairment charges(2)

39,818





39,818




Restructuring charges(3)

9,881



6,917



29,722



35,137


Gain on sale of land(4)

337





(10,377)




Project Costs(5)

4,881





4,881




Amortization of inventory write-up(6)

925





1,460




Loss on refinancing and extinguishment of debt(7)





770



1,020


Settlement charges(8)

775



525



775



6,427


Foreign tax amnesty program(9)



1,502





4,623


Tax impact of adjusting items(10)

(6,879)



(3,912)



(7,889)



(8,855)


Reversal of deferred tax valuation allowance (11)

(43,606)





(43,606)




Impact of U.S. tax reform(12)

748



33,484



(6,322)



33,484


Worthless security tax deduction(13)



(13,947)





(13,947)


Adjusted net income

$

27,527



$

63,563



$

160,704



$

207,955










Weighted average shares outstanding








Basic

17,761,701



17,815,292



17,894,718



17,781,272


Diluted (14)

17,761,701



18,591,378



18,290,202



18,776,653










Earnings per share:








Basic

$

(1.30)



$

1.60



$

6.02



$

7.61


Diluted

$

(1.30)



$

1.53



$

5.89



$

7.21










Adjusted earnings per share:








Basic

$

1.55



$

3.57



$

8.98



$

11.70


Diluted

$

1.53



$

3.42



$

8.79



$

11.08



(1)

Other non-cash impairment charges in 2018 related to intangible assets of $791 and fixed assets of $42,915. Impairment charges in 2017 related to fixed assets of $14,763.

(2)

Non-cash goodwill impairment charges in 2018 related to impairments at our Europe and Asia Pacific reporting units, net of approximately $5,463 attributable to our noncontrolling interests.

(3)

Includes non-cash impairment charges related to restructuring.

(4)

Gain on sale of land in Europe that was contemplated in conjunction with our restructuring plan.

(5)

Project costs related to acquisitions and planned divestiture.

(6)

Amortization of write-up of inventory to fair value for the 2018 acquisitions.

(7)

Loss on refinancing and extinguishment of debt relating to the March 2018 amendment and May 2017 amendment of the Term Loan Facility.

(8)

Non-cash settlement charges incurred related to certain of our non-U.S. pension plans. 

(9)

Relates to indirect taxes recorded in cost of products sold.

(10)

Represents the elimination of the income tax impact of the above adjustments, by calculating the income tax impact of these adjusting items using the appropriate tax rate for the jurisdiction where the charges were incurred.

(11)

Relates to the reversal of the Company's valuation allowance on net deferred tax assets in France and on capital losses in the U.S.

(12)

Tax impact of the transition tax on undistributed foreign earnings and the tax effect of adjusting deferred taxes for the Tax Cuts and Jobs Act enacted into law on December 22, 2017.

(13)

Discrete tax benefit recorded in Q4 2017.

(14)

For the purpose of calculating Q4 2018 adjusted diluted earnings per share, the weighted average shares outstanding were 18,003,882.

 

 

Free Cash Flow


The following table defines free cash flow (unaudited):



Quarter Ended December 31,


Year Ended December 31,


2018


2017


2018


2017


(dollar amounts in thousands)

Net cash provided by operating activities

$

71,384



$

208,016



$

149,388



$

313,106


Capital expenditures

(57,983)



(49,349)



(218,071)



(186,795)


Free cash flow

$

13,401



$

158,667



$

(68,683)



$

126,311


 

 

Cision View original content:http://www.prnewswire.com/news-releases/cooper-standard-reports-fourth-quarter-and-full-year-2018-results-300796430.html

SOURCE Cooper-Standard Holdings Inc.