Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – April 1, 2019
 
 
COOPER-STANDARD HOLDINGS INC.
(Exact name of registrant as specified in its charter)
 
 

Delaware
 
001-36127
 
20-1945088
(State or other jurisdiction
 of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
39550 Orchard Hill Place Drive, Novi, Michigan
 
48375
(Address of principal executive offices)
 
(Zip code)
Registrant’s telephone number, including area code (248) 596-5900
 
 
Check the appropriate box below in the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 ¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 ¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 ¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 ¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
 ¨


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                        ¨







Item 2.01    Completion of Acquisition or Disposition of Assets.

On April 1, 2019, Cooper-Standard Automotive Inc., a wholly-owned subsidiary of Cooper-Standard Holdings Inc., together with certain of its subsidiaries (collectively the “Company”), completed the divestiture of its anti-vibration system (“AVS”) business to ContiTech USA, Inc., a subsidiary of Continental AG (“Continental”), for a total purchase price of $265.5 million, subject to certain adjustments. The estimated net cash proceeds after taxes and transaction-related expenses and fees are expected to be approximately $220 - $225 million. The transaction included facilities in Auburn, Indiana, Mitchell, Ontario, and Rennes, France, as well as AVS-related assets in Poland and China, and a 50% equity interest in Sujan Cooper Standard AVS Limited, a joint venture in India (collectively the “AVS Business”). In addition, at closing the Company and Continental entered into certain ancillary agreements providing for the transition of the AVS Business.

Item 9.01    Financial Statements and Exhibits.

(b) Pro forma financial information.
    
Unaudited pro forma consolidated financial statements as of December 31, 2018 and for the year ended December 31, 2018 are attached hereto as Exhibit 99. 
    
(d) Exhibits.

The following exhibit is furnished pursuant to Item 9.01 of Form 8-K: 

Exhibit 99    

Unaudited pro forma consolidated financial statements as of December 31, 2018 and for the year ended December 31, 2018.
            






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Cooper-Standard Holdings Inc.
(Registrant)
 
 
 
By:
 
/s/ Jonathan P. Banas
Name:
 
Jonathan P. Banas
Title:
 
Chief Financial Officer (Principal Financial Officer)
Date: April 5, 2019




Exhibit


COOPER-STANDARD HOLDINGS INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS


The following unaudited pro forma consolidated financial statements of Cooper-Standard Holdings Inc. (together with its consolidated subsidiaries, the “Company”), are presented to illustrate the effect of the divestiture on the Company’s historical financial position and operating results of its anti-vibration systems (“AVS”) business that included facilities in Auburn, Indiana, Mitchel Ontario, and Rennes France, as well as AVS-related assets in Poland and China, and a 50% equity interest in Sujan Cooper Standard AVS Limited, a joint venture in India (collectively the “AVS Business”). On April 1, 2019, The Company completed the divestiture of its AVS Business for a total purchase price of $265.5 million, subject to certain adjustments. The estimated net cash proceeds after taxes and transaction-related expenses and fees are expected to be approximately $220 - $225 million.

The AVS Business constituted a significant disposition for purposes of Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma consolidated financial statements in accordance with Article 11 of Regulation S-X. This divestiture does not qualify as discontinued operation as it does not represent a strategic shift that will have a major effect on the Company’s operations and financial results.

The historical consolidated financial statements of the Company have been adjusted in the pro forma financial statements to give effect to pro forma events that are factually supportable and directly attributable to the sale of the AVS Business. The unaudited pro forma consolidated financial statements are presented based on information currently available and certain estimates and assumptions, are intended for informational purposes only, are not necessarily indicative of what our financial position or results of operations actually would have been had the sale of the AVS Business been completed as of the dates indicated, nor are they necessarily indicative of future results.

The unaudited pro forma consolidated statement of net income for the year ended December 31, 2018 has been prepared to present our results of operations as if the sale of the AVS Business had occurred on January 1, 2018. The unaudited pro forma consolidated balance sheet has been prepared to present our financial position as if the sale of the AVS Business had occurred on December 31, 2018.

The unaudited pro forma consolidated financial statements and accompanying notes should be read together with our historical consolidated financial statements as of and for the year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2019.
































COOPER-STANDARD HOLDINGS INC.
PRO FORMA CONSOLIDATED STATEMENT OF NET INCOME
(Dollar amounts in thousands except per share amounts)
 (unaudited)
 
Year Ended December 31, 2018
 
Historical Financial Statement
 
Pro Forma Adjustments
 
Pro Forma Financial Statement
Sales
$
3,629,293

 
$
(339,903
)
(a) 
$
3,289,390

Cost of products sold
3,075,737

 
(287,449
)
(a) 
2,788,288

Gross profit
553,556

 
(52,454
)
 
501,102

Selling, administration & engineering expenses
314,805

 
(14,723
)
(a) 
300,082

Amortization of intangibles
14,844

 

 
14,844

Gain on sale of land
(10,377
)
 

 
(10,377
)
Goodwill impairment charges
45,281

 

 
45,281

Other impairment charges
43,706

 

 
43,706

Restructuring charges
29,722

 

 
29,722

Operating profit
115,575

 
(37,731
)
 
77,844

Interest expense, net of interest income
(41,004
)
 

 
(41,004
)
Equity in earnings of affiliates
6,718

 
(451
)
(a) 
6,267

Loss on refinancing and extinguishment of debt
(770
)
 

 
(770
)
Other expense, net
(5,613
)
 

 
(5,613
)
Income before income taxes
74,906

 
(38,182
)
 
36,724

Income tax (benefit) expense
(29,683
)
 
4,068

(b) 
(25,615
)
Net income
104,589

 
(42,250
)
 
62,339

Net (income) loss attributable to noncontrolling interests
3,177

 

 
3,177

Net income attributable to Cooper-Standard Holdings Inc.
$
107,766

 
$
(42,250
)
 
$
65,516

 
 
 
 
 


Earnings per share:
 
 
 
 
 
Basic
$
6.02

 
$
(2.36
)
 
$
3.66

Diluted
$
5.89

 
$
(2.31
)
 
$
3.58






COOPER-STANDARD HOLDINGS INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
(Dollar amounts in thousands except share amounts)
(unaudited)
 
December 31, 2018
 
Historical Financial Statement
 
Pro Forma Adjustments
 
Pro Forma Financial Statement
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
264,980

 
$
220,000

(c) 
$
484,980

Accounts receivable, net
418,607

 

 
418,607

Tooling receivable
141,106

 

 
141,106

Inventories
175,572

 

 
175,572

Prepaid expenses
36,878

 

 
36,878

Other current assets
108,683

 

 
108,683

Assets held for sale
103,898

 
(103,898
)
(d) 

Total current assets
1,249,724

 
116,102

 
1,365,826

Property, plant and equipment, net
984,241

 

 
984,241

Goodwill
143,681

 

 
143,681

Intangible assets, net
99,602

 

 
99,602

Deferred tax assets
70,007

 

 
70,007

Other assets
75,848

 

 
75,848

Total assets
$
2,623,103

 
$
116,102

 
$
2,739,205

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Debt payable within one year
$
101,323

 
$

 
$
101,323

Accounts payable
452,320

 

 
452,320

Payroll liabilities
92,604

 

 
92,604

Accrued liabilities
98,907

 

 
98,907

Liabilities held for sale
71,195

 
(71,195
)
(d) 

Total current liabilities
816,349

 
(71,195
)
 
745,154

Long-term debt
729,805

 

 
729,805

Pension benefits
138,771

 

 
138,771

Postretirement benefits other than pensions
40,901

 

 
40,901

Deferred tax liabilities
8,233

 

 
8,233

Other liabilities
29,542

 

 
29,542

Total liabilities
1,763,601

 
(71,195
)
 
1,692,406

7% Cumulative participating convertible preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding

 

 

Equity:
 
 
 
 
 
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,620,546 shares issued and 17,554,737 outstanding as of December 31, 2018 and 19,920,805 shares issued and 17,914,599 outstanding as of December 31, 2017
17

 

 
17

Additional paid-in capital
501,511

 

 
501,511

Retained earnings
576,025

 
187,297

(e) 
763,322

Accumulated other comprehensive loss
(246,088
)
 

 
(246,088
)
Total Cooper-Standard Holdings Inc. equity
831,465

 
187,297

 
1,018,762

Noncontrolling interests
28,037

 

 
28,037

Total equity
859,502

 
187,297

 
1,046,799

Total liabilities and equity
$
2,623,103

 
$
116,102

 
$
2,739,205








COOPER-STANDARD HOLDINGS INC.
NOTES TO THE UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

(a) Reflects the elimination of the results of operations attributable to the AVS Business and transaction costs incurred in 2018 related to the divestiture.
(b) Reflects the income tax effect for unaudited pro forma consolidated statement of net income adjustments related to the sale of the AVS Business using statutory tax rates in each jurisdiction, and the release of a valuation allowance against capital loss carryforwards in the U.S.
(c) Reflects the receipt of $265.5 million gross proceeds from the divestiture received at closing less estimated closing and post-closing adjustments, and transaction fees of approximately $45.5 million.
(d) Reflects the removal of the historical assets and liabilities held for sale of the AVS Business.
(e) Reflects the estimated net gain arising from the divestiture as of December 31, 2018. The estimated net gain has not been reflected in the pro forma consolidated statement of net income as it is considered to be nonrecurring in nature.