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COOPER-STANDARD HOLDINGS INC.

(CPS)
  Report
Real-time Estimate Cboe BZX  -  02:10 2022-09-27 pm EDT
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COOPER-STANDARD HOLDINGS INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

08/05/2022 | 04:12pm EDT
This management's discussion and analysis of financial condition and results of
operations is intended to assist in understanding and assessing the trends and
significant changes in our results of operations and financial condition. Our
historical results may not indicate, and should not be relied upon as an
indication of, our future performance. Our forward-looking statements reflect
our current views about future events, are based on assumptions and are subject
to known and unknown risks and uncertainties that could cause actual results to
differ materially from those contemplated by these statements. See
"Forward-Looking Statements" below for a discussion of risks associated with
reliance on forward-looking statements. Factors that may cause differences
between actual results and those contemplated by forward-looking statements
include, but are not limited to, those discussed below and in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S.
Securities and Exchange Commission ("2021 Annual Report"), including Item 1A.
"Risk Factors." The following should be read in conjunction with our 2021 Annual
Report and the other information included herein. Our discussion of trends and
conditions supplements and updates such discussion included in our 2021 Annual
Report. References in this quarterly report on Form 10-Q (the "Report") to "we,"
"our," or the "Company" refer to Cooper-Standard Holdings Inc., together with
its consolidated subsidiaries.

Executive Overview

Our Business


We design, manufacture and sell sealing, fuel and brake delivery, and fluid
transfer systems for use primarily in passenger vehicles and light trucks
manufactured by global automotive original equipment manufacturers ("OEMs"). We
are primarily a "Tier 1" supplier, with approximately 83% of our sales in 2021
made directly to major OEMs. We operate our business along the following
reportable segments: North America, Europe, Asia Pacific and South America. All
other business activities are reported in Corporate, eliminations and other.

Recent Trends and Conditions

General Economic Conditions and Outlook


The global automotive industry is susceptible to uncertain economic conditions
that could adversely impact new vehicle demand and production. Business
conditions may vary significantly from period to period or region to region. In
2020, the COVID-19 pandemic created an unusually high degree of economic
disruption and uncertainty globally which adversely impacted automotive
production. In 2021, global automotive production was again negatively impacted
by lingering impacts of the COVID-19 pandemic and broad supply chain challenges
stemming, in part, from a sharp rebound in overall industrial demand. In 2022,
rising inflation and continuing supply chain challenges are contributing to
global economic uncertainty. In addition, recent pandemic related restrictions
imposed in certain large population centers in China, the threat of additional
lockdowns, and continuing military actions in Eastern Europe are having broad
negative impacts on key sectors of the global economy.

In North America, U.S. consumer confidence has trended downward since the second
quarter of 2021. Key drivers of the decline are significant inflation,
continuing supply chain disruptions and rising interest rates. Geopolitical
tensions and persistent concerns over new variants of COVID-19 are also
important factors. However, the U.S. economy is seeing some benefits from near
all-time low unemployment rates and rising wages. In addition, current and
future government spending authorized by recently passed infrastructure
legislation and private spending related to pent-up consumer demand continue to
support economic growth. Economists at the International Monetary Fund (IMF) are
expecting the economies of the United States, Canada and Mexico to grow by 2.3
percent, 3.4 percent and 2.4 percent, respectively, in 2022.

In Europe, the war in Ukraine and related sanctions imposed on Russia are having
a dramatic impact on energy prices and energy security. This is translating into
lower output and higher inflation for most Eurozone countries. Supply chain
disruptions have also hurt certain industries including the automobile sector,
with the war and sanctions hindering the production of key input materials. The
easing of COVID-19 restrictions, tighter labor markets, pent-up spending and
European Union fiscal policy changes should continue to sustain activity and
support some growth in 2022. Economists at the IMF are currently expecting the
economy in the Eurozone region to grow by approximately 2.6 percent for the
year.

In the Asia Pacific region, the combination of more transmissible variants and
the strict zero-COVID strategy in China has led to repeated mobility
restrictions and localized lockdowns that have weighed on economic activity and
private consumption. Recent lockdowns in key Chinese manufacturing and trading
hubs such as Shenzhen and Shanghai compounded supply disruptions elsewhere in
the region and beyond during the second quarter of 2022. Moreover, real estate
investment in China, once a key driver of economic growth, has slowed
significantly. As Chinese exports surged in June 2022 following the end of the
most recent round of COVID-related lockdowns, the Chinese government reaffirmed
a GDP growth target of "around of
                                       26
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5.5 percent" for 2022, implying that further stimulus measures may be implemented to sustain economic growth. Economists at the IMF are expecting the Chinese economy to grow 3.3 percent for the year.


In South America, the Brazilian economy continues to expand amid fiscal support
and the lessening impact of the COVID-19 pandemic. Increasing exports of goods
and services have provided strong support and the unemployment rate remains low.
Tighter monetary policy, inflation and political uncertainty ahead of the
October 2022 general elections are likely to temper investment and economic
growth in the second half of the year. Economists at the IMF are now estimating
the Brazilian economy will grow just 1.7 percent in 2022. We remain cautious for
the economic outlook in this market given the long history of political
instability and economic volatility in the region.

Raw Materials


Our business is susceptible to inflationary pressures with respect to raw
materials which may place operational and profitability burdens on the entire
supply chain. Costs related to raw materials, such as steel, aluminum, and
oil-derived commodities, continue to be volatile, which led to significant
increases in these costs in 2021. Current global events continue to add further
price pressure and uncertainty to raw material costs for 2022. In addition, we
continue to see significant inflationary pressure on wages, energy,
transportation and other general costs. As such, we will continue to work on an
ongoing basis with our customers and suppliers to mitigate both inflationary
pressures and our material-related cost exposures through a combination of
expanded index-based agreements and other commercial enhancements.

Production Levels


Our business is directly affected by the automotive vehicle production rates in
North America, Europe, Asia Pacific and South America which have been adversely
affected by a series of events in recent years. Beginning in the first quarter
of 2020, we experienced production shutdowns related to the COVID-19 pandemic.
Beginning in the first quarter of 2021, OEM production volumes were disrupted by
the global shortage of semiconductors. In 2022, disruptions stemming from the
Russia-Ukraine crisis and lockdowns in key Chinese manufacturing and trading
hubs such as Shenzhen and Shanghai have further exacerbated supply chain
disruptions and vehicle production levels. We continue to collaborate closely
with our customers to minimize production inefficiencies while supporting their
needs.

Light vehicle production in certain regions for the three and six months ended June 30, 2022 and 2021 was as follows:


                                                    Three Months Ended June 30,                                               Six Months Ended June 30,
(In millions of units)               2022(1)                  2021(1)                 % Change              2022(1)                  2021(1)                   % Change
North America                            3.6                     3.2                    11.7%                   7.1                     6.8                      4.7%
Europe                                   3.9                     4.1                   (4.9)%                   7.8                     8.9                     (11.8)%
Asia Pacific                            10.0                    10.3                   (2.6)%                  21.3                    21.4                     (0.2)%
Greater China                            5.5                     5.8                   (5.9)%                  11.7                    11.6                      0.6%
South America                            0.7                     0.6                    12.9%                   1.3                     1.3                     (0.5)%

(1)Production data based on S&P Global (formerly IHS Markit), July 2022.


In all regions, production volumes were impacted by the global shortage of
semiconductors which began in the first quarter of 2021 and deteriorated
thereafter throughout the year. Production stoppages related to semiconductor
and other supply chain shortages continued into 2022, but have improved
sequentially quarter over quarter. In Europe, vehicle production in the six
months ended June 30, 2022 was negatively impacted by additional supply chain
issues related to the Russia-Ukraine crisis. In China, vehicle production in the
three months ended June 30, 2022 was negatively impacted by the COVID-19 related
shutdowns.
                                       27
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Results of Operations

                                                        Three Months Ended June 30,                                 Six Months Ended June 30,
                                                 2022                2021             Change               2022                 2021              Change
                                                                                     (dollar amounts in thousands)
Sales                                        $  605,917          $ 533,185          $ 72,732          $ 1,218,901          $ 1,202,152          $ 16,749
Cost of products sold                           590,541            534,118            56,423            1,181,983            1,134,793            47,190
Gross profit (loss)                              15,376               (933)           16,309               36,918               67,359           (30,441)
Selling, administration & engineering
expenses                                         52,282             50,085             2,197              104,186              108,139           

(3,953)

Loss (gain) on sale of business, net                  -                195              (195)                   -                 (696)              

696

Gain on sale of fixed assets, net               (33,391)                 -           (33,391)             (33,391)                   -           (33,391)
Amortization of intangibles                       1,737              1,933              (196)               3,483                3,705              (222)
Restructuring charges                             3,482             11,631            (8,149)              11,313               32,678           (21,365)

Impairment charges                                    3                841              (838)                 458                  841              (383)
Operating loss                                   (8,737)           (65,618)           56,881              (49,131)             (77,308)           28,177
Interest expense, net of interest income        (18,454)           (18,125)             (329)             (36,631)             (35,909)             

(722)

Equity in (losses) earnings of affiliates        (3,446)               393            (3,839)              (4,802)               1,179            (5,981)
Other (expense) income, net                      (1,509)             1,362            (2,871)              (2,720)              (3,727)            1,007
Loss before income taxes                        (32,146)           (81,988)           49,842              (93,284)            (115,765)           22,481
Income tax expense (benefit)                      2,005            (17,459)           19,464                2,657              (16,523)           19,180
Net loss                                        (34,151)           (64,529)           30,378              (95,941)             (99,242)            3,301
Net loss attributable to noncontrolling
interests                                           904                918               (14)               1,334                1,767              

(433)

Net loss attributable to Cooper-Standard
Holdings Inc.                                $  (33,247)         $ (63,611)         $ 30,364          $   (94,607)         $   (97,475)         $  2,868


Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021

Sales


Sales for the three months ended June 30, 2022 increased 13.6%, compared to the
three months ended June 30, 2021. The increase in sales was driven by volume and
mix (higher net vehicle production volume due to the impact of lessening
semiconductor supply issues in the current year partially offset by the impact
of COVID-19 related shutdowns in China and the Ukraine conflict in Europe and
net customer price adjustments including recovery of cost increases). This was
partially offset by the negative impact of foreign exchange, and the
deconsolidation of a joint venture in the Asia Pacific region. See Note 2.
"Deconsolidation and Divestiture" to the unaudited condensed consolidated
financial statements included in Part I, Item 1 of this Report for additional
information.

                                     Three Months Ended June 30,                                                Variance Due To:
                                                                                                                    Foreign
                              2022                2021             Change                  Volume / Mix*           Exchange            Deconsolidation
                                                                          (dollar amounts in thousands)
Total sales               $  605,917          $ 533,185          $ 72,732                $      101,878          $  (22,603)         $         (6,543)


* Net of customer price adjustments, including recoveries

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Gross Profit

                                    Three Months Ended June 30,                                                      Variance Due To:
                                                                                                                  Foreign
                             2022               2021             Change                  Volume / Mix*           Exchange            Cost Increases/(Decreases)**
                                                                               (dollar amounts in thousands)
Cost of products sold    $ 590,541          $ 534,118          $ 56,423                $       46,920          $  (20,619)         $                      30,122
Gross profit                15,376               (933)           16,309                        54,958              (1,984)                               (36,665)
Gross profit percentage
of sales                       2.5  %            (0.2) %


* Net of customer price adjustments, including recoveries ** Net of deconsolidation


Cost of products sold is primarily comprised of material, labor, manufacturing
overhead, freight, depreciation, warranty costs and other direct operating
expenses. The Company's material cost of products sold was approximately 50% and
45% of total cost of products sold for the three months ended June 30, 2022 and
2021, respectively. The change in cost of products sold was impacted by higher
volume and mix, commodity inflation, higher compensation related costs, higher
labor and overhead costs due to inconsistent volume production schedules, and
higher energy and transportation costs. These costs were partially offset by
foreign exchange, purchasing lean and manufacturing efficiencies, and the
deconsolidation of a joint venture in the Asia Pacific region.

Gross profit for the three months ended June 30, 2022 increased $16.3 million,
compared to the three months ended June 30, 2021. The change was driven by
volume and mix, net customer price adjustments including recovery of cost
increases, manufacturing efficiencies, and purchasing lean and restructuring
savings, partially offset by commodity and wage inflation, higher energy and
transportation costs and foreign exchange.

Selling, Administration and Engineering Expense. Selling, administration and
engineering expense includes administrative expenses as well as product
engineering and design and development costs. Selling, administration and
engineering expense for the three months ended June 30, 2022 was 8.6% of sales
compared to 9.4% for the three months ended June 30, 2021. The decrease was
primarily due to lower compensation costs due to salaried headcount initiative
savings and foreign exchange, partially offset by higher compensation related
costs.

Loss on Sale of Business, Net. The loss on sale of business of $0.2 million for
the three months ended June 30, 2021 related to the net effect of our 2020
divestitures. See Note 2. "Deconsolidation and Divestiture" to the unaudited
condensed consolidated financial statements included in Part 1, Item 1 of this
Report for additional information.

Gain on Sale of Fixed Assets, Net. The gain on sale of fixed assets for the three months ended June 30, 2022 was attributable to the gain on the sale-leaseback of a European facility of $33.4 million.

Amortization of Intangibles. Intangible amortization for the three months ended June 30, 2022 was comparable to the three months ended June 30, 2021.


Restructuring. Restructuring charges for the three months ended June 30, 2022
decreased $8.1 million compared to the three months ended June 30, 2021. The
decrease was primarily driven by lower restructuring charges in Europe.

Impairment Charges. Non-cash impairment charges for the three months ended June
30, 2022 decreased $0.8 million, primarily due to impairments in Europe in the
prior year period.

Interest Expense, Net. Net interest expense for the three months ended June 30, 2022 was comparable to the three months ended June 30, 2021.

Other Expense, Net. Other expense, net, for the three months ended June 30, 2022 decreased $2.9 million compared to the three months ended June 30, 2021, primarily due to the unfavorable impact of foreign exchange.


Income Tax Expense. Income tax expense for the three months ended June 30, 2022
was $2.0 million on losses before income taxes of $32.1 million compared to an
income tax benefit of $17.5 million on losses before income taxes of $82.0
million for the three months ended June 30, 2021. The effective tax rate for the
three months ended June 30, 2022 differed from the effective tax rate for the
three months ended June 30, 2021 primarily due to the geographic mix of pre-tax
losses, the inability to record a tax benefit for pre-tax losses in the U.S. and
certain foreign jurisdictions due to valuation allowances, discrete tax impacts
on the gain on sale transaction in Europe, and other tax reserve changes during
the three-month period ended June 30, 2022.
                                       29
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Six Months Ended June 30, 2022 Compared with Six Months Ended June 30, 2021

Sales


Sales for the six months ended June 30, 2022 increased 1.4%, compared to the six
months ended June 30, 2021. The increase in sales was driven by volume and mix
(higher net vehicle production volume due to the impact of lessening
semiconductor supply issues in the current year, partially offset by the impact
of COVID-19 in China and the Ukraine conflict in Europe and net customer price
adjustments, including recovery of cost increases). This was partially offset by
foreign exchange, and the deconsolidation of a joint venture in the Asia Pacific
region. See Note 2. "Deconsolidation and Divestiture" to the unaudited condensed
consolidated financial statements included in Part I, Item 1 of this Report for
additional information.

                                        Six Months Ended June 30,                                                  Variance Due To:
                                                                                                                       Foreign
                               2022                 2021              Change                  Volume / Mix*           Exchange            Deconsolidation
                                                                            (dollar amounts in thousands)
Total sales               $ 1,218,901          $ 1,202,152          $ 16,749                $       64,424          $  (32,662)         $        (15,013)

* Net of customer price adjustments, including recoveries

Gross Profit

                                       Six Months Ended June 30,                                                  Variance Due To:
                                                                                                                      Foreign           Cost Increases /
                              2022                 2021              Change                  Volume / Mix*           Exchange             (Decreases)**
                                                                           (dollar amounts in thousands)
Cost of products sold    $ 1,181,983          $ 1,134,793          $ 47,190                $       13,588          $  (28,035)         $         61,637
Gross profit                  36,918               67,359           (30,441)                       50,836              (4,627)                  (76,650)
Gross profit percentage
of sales                         3.0  %               5.6  %


* Net of customer price adjustments, including recoveries ** Net of deconsolidation


Cost of products sold is primarily comprised of material, labor, manufacturing
overhead, freight, depreciation, warranty costs and other direct operating
expenses. The Company's material cost of products sold was approximately 50% and
47% of total cost of products sold for the six months ended June 30, 2022 and
2021, respectively. The change in the cost of products sold was impacted by
commodity inflation, higher volume and mix, higher compensation related costs,
increased labor and overhead costs due to inconsistent volume production
schedules, and higher energy and transportation costs. These costs were
partially offset by foreign exchange, purchasing lean and manufacturing
efficiencies, restructuring savings and the deconsolidation of a joint venture
in the Asia Pacific region.

Gross profit for the six months ended June 30, 2022 decreased 45.2%, compared to
the six months ended June 30, 2021. The change was driven by commodity and wage
inflation and the non-recurrence of prior year COVID-19 government incentives.
These items were partially offset by volume and mix, net favorable operational
performance, lower variable employee compensation expenses, purchasing lean
savings, restructuring savings, and the prior year divestiture of our European
rubber fluid transfer and specialty sealing businesses and Indian operations.

Selling, Administration and Engineering Expense. Selling, administration and
engineering expense includes administrative expenses as well as product
engineering and design and development costs. Sales, administration and
engineering expense for the six months ended June 30, 2022 was 8.5% of sales
compared to 9.0% for the six months ended June 30, 2021. The decrease was
primarily due to salaried headcount initiative savings, customer recovery of
engineering expense, and foreign exchange, partially offset by higher
compensation related costs.

Loss (Gain) on Sale of Business, Net. The gain on sale of business, net of $0.7
million for the six months ended June 30, 2021 related to the net effect of our
2020 divestitures.

Gain on Sale of Fixed Assets, Net. The gain on sale of fixed assets for the six
months ended June 30, 2022 was attributable to the gain on the sale-leaseback of
a European facility of $33.4 million.

Amortization of Intangibles. Intangible amortization for the six months ended June 30, 2022 was comparable to the six months ended June 30, 2021.

                                       30
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Restructuring. Restructuring charges for the six months ended June 30, 2022 decreased $21.4 million compared to the six months ended June 30, 2021. The decrease was primarily driven by lower restructuring charges in Europe.


Impairment Charges. Impairment charges for the six months ended June 30, 2022
decreased $0.4 million, as compared to the six months ended June 30, 2021. The
decrease was driven by lower impairment charges in Europe in the current year
period.

Interest Expense, Net. Net interest expense for the six months ended June 30, 2022 was relatively consistent with the prior year period.

Other Expense, Net. Other expense for the six months ended June 30, 2022 decreased $1.0 million compared to the six months ended June 30, 2021, primarily due to favorable foreign currency, offset by a loss on deconsolidation.


Income Tax Expense (Benefit). Income tax expense for the six months ended June
30, 2022 was $2.7 million on losses before income taxes of $93.3 million
compared to income tax benefit of $16.5 million on losses before income taxes of
$115.8 million for the six months ended June 30, 2021. The effective tax rate
for the six months ended June 30, 2022 differed primarily from the effective tax
rate for the six months ended June 30, 2021 due to the geographic mix of pre-tax
losses, the inability to record a tax benefit for pre-tax losses in the U.S. and
certain foreign jurisdictions due to valuation allowances, discrete tax impacts
of the gain on sale transaction in Europe, and other tax reserve changes during
the six-month period ended June 30, 2022.

Segment Results of Operations


Our business is organized into the following reportable segments: North America,
Europe, Asia Pacific and South America. All other business activities are
reported in Corporate, eliminations and other. The Company uses Segment adjusted
EBITDA as the measure of earnings to assess the performance of each segment and
determine the resources to be allocated to the segments. We have defined
adjusted EBITDA as net income before interest, taxes, depreciation,
amortization, restructuring expense, and special items.

The following tables present sales and segment adjusted EBITDA for each of the reportable segments.


Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021

Sales

                                        Three Months Ended June 30,                                                Variance Due To:
                                                                                                                      Foreign
                                 2022                2021             Change                  Volume/ Mix*           Exchange            Deconsolidation
                                                                             (dollar amounts in thousands)
Sales to external customers
North America                $  331,687          $ 247,525          $ 84,162                $      85,220          $   (1,058)         $              -
Europe                          126,287            132,621            (6,334)                      10,499             (16,833)                        -
Asia Pacific                     85,779            103,915           (18,136)                      (6,741)             (4,852)                   (6,543)
South America                    26,261             14,153            12,108                       10,319               1,789                         -
Total Automotive                570,014            498,214            71,800                       99,297             (20,954)                   (6,543)
Corporate, eliminations and
other                            35,903             34,971               932                        2,581              (1,649)                        -
Consolidated                 $  605,917          $ 533,185          $ 72,732                $     101,878          $  (22,603)         $         (6,543)


* Net of customer price adjustments, including recoveries


•Volume and mix, net of customer price adjustments, including recoveries, was
driven by vehicle production volume increases due to the lessening impact of
semiconductor-related supply issues, partially offset by the impact of COVID-19
shutdowns in China and the Ukraine conflict in Europe.

•The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi, Korean Won and Brazilian Real.

                                       31
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Segment adjusted EBITDA

                                      Three Months Ended June 30,                                               Variance Due To:
                                                                                                                   Foreign          Cost (Increases)/
                               2022                2021             Change                  Volume/ Mix*           Exchange            Decreases**
                                                                          (dollar amounts in thousands)
Segment adjusted EBITDA
North America              $   15,441          $     756          $ 14,685                $      34,180          $    (723)         $       (18,772)
Europe                        (15,316)           (14,391)             (925)                      11,328              2,096                  (14,349)
Asia Pacific                   (7,799)            (2,302)           (5,497)                       3,862             (2,688)                  (6,671)
South America                  (1,298)              (726)             (572)                       2,967             (2,297)                  (1,242)
Total Automotive               (8,972)           (16,663)            7,691                       52,337             (3,612)                 (41,034)
Corporate, eliminations
and other                      (1,402)             1,937            (3,339)                       2,621               (124)                  (5,836)
Consolidated adjusted
EBITDA                     $  (10,374)         $ (14,726)         $  4,352                $      54,958          $  (3,736)         $       (46,870)


* Net of customer price adjustments, including recoveries ** Net of deconsolidation


•Volume and mix, net of customer price adjustments, including recoveries, was
driven by vehicle production volume increases due to a lessening impact on
customer production schedules for semi-conductor-related supply issues in the
current year period partially offset by the impact of COVID-19 shutdowns in
China and the Ukraine conflict in Europe.

•The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi, Korean Won and Brazilian Real.

•The Cost (Increases) / Decreases category above includes:

•Commodity cost and inflationary economics;

• Manufacturing efficiencies and purchasing savings through lean initiatives;

•Increased compensation-related expenses; and

•Decreased costs related to ongoing salaried headcount initiatives and restructuring savings.

Six Months Ended June 30, 2022 Compared with Six Months Ended June 30, 2021

Sales

                                           Six Months Ended June 30,                                                  Variance Due To:
                                                                                                                         Foreign
                                  2022                 2021              Change                  Volume/ Mix*           Exchange            Deconsolidation
                                                                              (dollar amounts in thousands)
Sales to external customers
North America                $   653,581          $   586,561          $ 67,020                $      68,396          $   (1,376)         $              -
Europe                           257,701              298,397           (40,696)                     (14,121)            (26,575)                        -
Asia Pacific                     189,532              218,140           (28,608)                      (8,535)             (5,060)                  (15,013)
South America                     47,780               29,639            18,141                       15,228               2,913                         -
Total Automotive               1,148,594            1,132,737            15,857                       60,968             (30,098)                  (15,013)
Corporate, eliminations and
other                             70,307               69,415               892                        3,456              (2,564)                        -
Consolidated                 $ 1,218,901          $ 1,202,152          $ 16,749                $      64,424          $  (32,662)         $        (15,013)

* Net of customer price adjustments, including recoveries

•Volume and mix, net of customer price adjustments, including recoveries, was driven by vehicle production volume increases due to a lessening impact on customer production schedules for semi-conductor related supply issues in the

                                       32
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current year period partially offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.

•The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi, Korean Won and Brazilian Real.


Segment adjusted EBITDA

                                       Six Months Ended June 30,                                               Variance Due To:
                                                                                                                   Foreign          Cost (Increases)/
                               2022              2021              Change                  Volume/ Mix*           Exchange             Decreases**
                                                                          (dollar amounts in thousands)
Segment adjusted EBITDA
North America              $  32,937          $ 41,989          $  (9,052)               $      27,170          $     (502)         $       (35,720)
Europe                       (29,973)          (15,880)           (14,093)                       8,260               2,340                  (24,693)
Asia Pacific                  (8,541)            1,250             (9,791)                       4,019              (2,589)                 (11,221)
South America                 (1,707)           (3,334)             1,627                        4,529               1,121                   (4,023)
Total Automotive              (7,284)           24,025            (31,309)                      43,978                 370                  (75,657)
Corporate, eliminations
and other                     (2,945)             (211)            (2,734)                       6,858                 347                   (9,939)
Consolidated adjusted
EBITDA                     $ (10,229)         $ 23,814          $ (34,043)               $      50,836          $      717          $       (85,596)


* Net of customer price adjustments, including recoveries ** Net of deconsolidation


•Volume and mix, net of customer price adjustments, including recoveries, was
driven by vehicle production volume increases due to a lessening impact on
vehicle manufacturers of the semi-conductor related supply issues partially
offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in
Europe.
•The impact of foreign currency exchange was primarily related to the Euro,
Chinese Renminbi, Korean Won and Brazilian Real.

•The Cost (Increases) / Decreases category above includes:

•Commodity cost and inflationary economics;

•Manufacturing efficiencies and purchasing savings through lean initiatives;

•Increased compensation-related expenses; and

•Decreased costs related to ongoing salaried headcount initiatives and restructuring savings.

Liquidity and Capital Resources

Short and Long-Term Liquidity Considerations and Risks


We intend to fund our ongoing working capital, capital expenditures, debt
service and other funding requirements through a combination of cash flows from
operations, cash on hand, borrowings under our senior asset-based revolving
credit facility ("ABL Facility") and receivables factoring. The Company utilizes
intercompany loans and equity contributions to fund its worldwide operations.
There may be country-specific regulations which may restrict or result in
increased costs in the repatriation of these funds. See Note 9. "Debt" to the
unaudited condensed consolidated financial statements included in Part I, Item 1
of this Report for additional information.
We continue to actively preserve cash and enhance liquidity, including
decreasing our capital expenditures and improving working capital. Based on
those actions and current projections of OEM customer production, we believe
that our cash flows from operations, cash on hand, borrowings under our ABL
Facility and receivables factoring will enable us to meet our ongoing working
capital, capital expenditures and debt service requirements for the next twelve
months, despite the challenges presented by the COVID-19 pandemic and supply
chain issues facing the industry. We continuously monitor and forecast our
liquidity situation, take the necessary actions to preserve our liquidity and
evaluate other financial alternatives that may be available to us should the
need arise. Our ability to fund our working capital needs, debt payments and
other obligations, and to comply with the financial covenants, including
borrowing base limitations, under our ABL Facility, depend on our future
operating performance and cash flows and many factors outside of our control,
including the costs of raw materials, the state of the overall automotive
industry and financial and economic conditions, including the continued impact
of COVID-19, and other factors.
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Our Term Loan Facility matures on November 2, 2023. The Company has retained
Goldman Sachs & Co. LLC as its financial advisor to analyze, evaluate and help
arrange a refinancing of the Term Loan Facility and possibly certain other debt
instruments. To the extent the Company is not able to refinance its Term Loan
Facility prior to the issuance of the financial statements for the year ended
December 31, 2022, our independent auditors may issue an audit opinion including
an explanatory paragraph that indicates there is substantial doubt about our
ability to continue as a going concern. The inclusion of such an explanatory
paragraph in the report of our independent auditors would breach a covenant
under our Term Loan Facility which, unless cured, would constitute an event of
default thereunder. Such an event of default would cause a cross-default or
cross-acceleration of other indebtedness. In such a case, the Company would not
expect that it would have sufficient liquidity to repay all of its outstanding
indebtedness at such time. While there can be no assurance that the Company will
be able to refinance its Term Loan Facility on acceptable terms or at all prior
to the issuance of the financial statements for the year ended December 31,
2022, the Company believes its actions to improve financial performance, to
maintain liquidity and current discussions with certain investors will enable
the Company to refinance its Term Loan Facility.

Cash Flows


Operating Activities. Net cash used in operations was $0.2 million for the six
months ended June 30, 2022, compared to net cash used in operations of $60.7
million for the six months ended June 30, 2021. The net change was primarily due
to the receipt of $51.4 million in cash payments from the United States Internal
Revenue Service for tax refunds related to net operating loss carrybacks.

Investing Activities. Net cash provided by investing activities was $8.4 million
for the six months ended June 30, 2022, compared to net cash used in investing
activities of $52.6 million for the six months ended June 30, 2021. The change
was primarily related to proceeds of $50.0 million related to the sale-leaseback
of a certain European facility which were received in the six months ended June
30, 2022. We expect to continue initiatives to reduce overall capital spending
and anticipate that we will spend approximately $85 - $95 million on capital
expenditures in 2022.

Financing Activities. Net cash used in financing activities totaled $4.1 million
for the six months ended June 30, 2022, compared to net cash provided by
financing activities of $11.7 million for the six months ended June 30, 2021.
The outflow in 2022 primarily related to principal payments on debt, while the
inflow in 2021 was primarily due to an increase in short-term debt.

Share Repurchase Program


In June 2018, our Board of Directors approved a common stock repurchase program
(the "2018 Program") authorizing us to repurchase, in the aggregate, up to
$150.0 million of our outstanding common stock. Under the 2018 Program,
repurchases may be made on the open market, through private transactions,
accelerated share repurchases, round lot or block transactions on the New York
Stock Exchange or otherwise, as determined by us and in accordance with
prevailing market conditions and federal securities laws and regulations. We
expect to fund any future repurchases from cash on hand and future cash flows
from operations. The specific timing and amount of any future repurchase will
vary based on market and business conditions and other factors. We are not
obligated to acquire a particular amount of securities, and the 2018 Program may
be discontinued at any time at our discretion. As of June 30, 2022, we had
approximately $98.7 million of repurchase authorization remaining under the 2018
Program. We did not make any repurchases under the 2018 Program during the six
months ended June 30, 2022 or 2021.

Non-GAAP Financial Measures


In evaluating our business, management considers EBITDA and Adjusted EBITDA to
be key indicators of our operating performance. Our management also uses EBITDA
and Adjusted EBITDA:

•because similar measures are utilized in the calculation of the financial
covenants and ratios contained in our financing arrangements;
•in developing our internal budgets and forecasts;
•as a significant factor in evaluating our management for compensation purposes;
•in evaluating potential acquisitions;
•in comparing our current operating results with corresponding historical
periods and with the operational performance of other companies in our industry;
and
•in presentations to the members of our board of directors to enable our board
of directors to have the same measurement basis of operating performance as is
used by management in their assessments of performance and in forecasting and
budgeting for our company.

In addition, we believe EBITDA and Adjusted EBITDA and similar measures are
widely used by investors, securities analysts and other interested parties in
evaluating our performance. We define Adjusted EBITDA as net income (loss) plus
income tax expense (benefit), interest expense, net of interest income,
depreciation and amortization or EBITDA, as adjusted
                                       34
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for items that management does not consider to be reflective of our core operating performance. These adjustments include, but are not limited to, restructuring costs, impairment charges, non-cash fair value adjustments and acquisition-related costs.


EBITDA and Adjusted EBITDA are not financial measurements recognized under U.S.
GAAP, and when analyzing our operating performance, investors should use EBITDA
and Adjusted EBITDA as a supplement to, and not as alternatives for, net income
(loss), operating income, or any other performance measure derived in accordance
with U.S. GAAP, nor as an alternative to cash flow from operating activities as
a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as
analytical tools, and they should not be considered in isolation or as
substitutes for analysis of our results of operations as reported under U.S.
GAAP. These limitations include:

•they do not reflect our cash expenditures or future requirements for capital
expenditure or contractual commitments;
•they do not reflect changes in, or cash requirements for, our working capital
needs;
•they do not reflect interest expense or cash requirements necessary to service
interest or principal payments under our ABL Facility, Term Loan Facility,
Senior Notes and Senior Secured Notes;
•they do not reflect certain tax payments that may represent a reduction in cash
available to us;
•although depreciation and amortization are non-cash charges, the assets being
depreciated or amortized may have to be replaced in the future, and EBITDA and
Adjusted EBITDA do not reflect cash requirements for such replacements; and
•other companies, including companies in our industry, may calculate these
measures differently and, as the number of differences in the way companies
calculate these measures increases, the degree of their usefulness as a
comparative measure correspondingly decreases.

In addition, in evaluating Adjusted EBITDA, it should be noted that in the future, we may incur expenses similar to the adjustments in the below presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by special items.

                                       35
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The following table provides a reconciliation of EBITDA and Adjusted EBITDA from
net loss, which is the most comparable financial measure in accordance with U.S.
GAAP:

                                                Three Months Ended June 30,                 Six Months Ended June 30,
                                                  2022                  2021                 2022                  2021
                                                                     (dollar amounts in thousands)
Net loss attributable to Cooper-Standard
Holdings Inc.                               $      (33,247)         $ 

(63,611) $ (94,607) $ (97,475) Income tax expense (benefit)

                         2,005            (17,459)                  2,657            (16,523)
Interest expense, net of interest income            18,454             18,125                  36,631             35,909
Depreciation and amortization                       31,412             35,444                  63,545             68,972
EBITDA                                      $       18,624          $ (27,501)         $        8,226          $  (9,117)
Restructuring charges                                3,482             11,631                  11,313             32,678
Deconsolidation of joint venture (1)                     -                  -                   2,257                  -
Impairment charges (2)                                   3                841                     458                841
Loss (gain) on sale of business, net (3)                 -                195                       -               (696)
Gain on sale of fixed assets, net (4)              (33,391)                 -                 (33,391)                 -
Lease termination costs (5)                              -                108                       -                108

Indirect tax adjustments (6)                           908                  -                     908                  -
Adjusted EBITDA                             $      (10,374)         $ (14,726)         $      (10,229)         $  23,814


(1)Loss attributable to deconsolidation of a joint venture in the Asia Pacific
region, which required adjustment to fair value.
(2)Non-cash impairment charges in 2022 and 2021 related to idle assets in
Europe.
(3)During 2021, we recorded subsequent adjustments to the net gain on sale of
business, which related to the 2020 divestiture of our European rubber fluid
transfer and specialty sealing businesses, as well as its Indian operations.
(4)In the first quarter of 2022, the Company signed a sale-leaseback agreement
on one of its European facilities, and a gain was recognized in the second
quarter of 2022.
(5)Lease termination costs no longer recorded as restructuring charges in
accordance with ASC 842.
(6)Impact of prior period indirect tax adjustments.





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Contingencies and Environmental Matters


The information concerning contingencies, including environmental contingencies
and the amount currently held in reserve for environmental matters, contained in
Note 19. "Commitments and Contingencies" to the unaudited condensed consolidated
financial statements included in Part I, Item 1 of this Report, is incorporated
herein by reference.

Critical Accounting Estimates

There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2022.


Forward-Looking Statements
This quarterly report on Form 10-Q 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: Volatility or decline of the
Company's stock price, or absence of stock price appreciation; impacts,
including commodity cost increases and disruptions related to the war in Ukraine
and the current COVID-related lockdowns in China; our ability to offset the
adverse impact of higher commodity and other costs through negotiations with our
customers; the impact, and expected continued impact, of the COVID-19 outbreak
on our financial condition and results of operations; significant risks to our
liquidity presented by the COVID-19 pandemic risk; 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; competitive threats and commercial risks associated with our
diversification strategy through our Advanced Technology Group; 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 and variable rates of interest; 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 and regulatory proceedings, claims or investigations against
us; work stoppages or other labor disruptions; the ability of our intellectual
property to withstand legal challenges; cyber-attacks, data privacy concerns,
other disruptions in, or the inability to implement upgrades to, our information
technology systems; the possible volatility of our annual effective tax rate;
the possibility of a failure to maintain effective controls and procedures; the
possibility of future impairment charges to our goodwill and long-lived assets;
our ability to identify, attract, develop and retain a skilled, engaged and
diverse workforce; our ability to procure insurance at reasonable rates; and our
dependence on our subsidiaries for cash to satisfy our obligations.

You should not place undue reliance on these forward-looking statements. Our
forward-looking statements speak only as of the date of this quarterly report on
Form 10-Q, 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 quarterly report on Form 10-Q 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.

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